Imagine you decided to put your money into one of three options five years ago. Which one would you choose and how do you think it performed?
- Option 1: The world’s largest cryptocurrency
- Option 2: A technology innovation fund focused on disruptive technologies
- Option 3: An American industrial conglomerate
Key Points
The three options we are referring to are Bitcoin (the world’s largest cryptocurrency), ARK Innovation — run by Cathie Wood, a celebrity in the technology innovation world — and Berkshire Hathaway, the US conglomerate Warren Buffett built.
Over the last five years at the time of writing, Berkshire Hathaway (+105%) has outperformed both Bitcoin (+60%) and ARK Innovation (−48%).
In this article, we examine these three options by applying financial first principles. We examine what they are, how they generate value (or fail to), and what they tell us about durable wealth creation in a safe and predictable manner.
Bitcoin
Bitcoin was introduced in 2008 by an anonymous individual or group operating under the pseudonym Satoshi Nakamoto. The founding document, now known as the Bitcoin whitepaper, proposed a “peer-to-peer electronic cash system” that would allow transactions to occur without the need for a trusted intermediary such as a bank. The underlying mechanism, a distributed ledger known as the blockchain, is a genuine technical innovation.
Bitcoin produces no income. It pays no dividend, generates no earnings, employs no workers, and manufactures no products. Its value is determined entirely by what the next buyer is willing to pay. In classical finance, this is the definition of speculation rather than investment.
ARK Innovation ETF (ARKK)
ARK Investment Management was founded by Cathie Wood in 2014 based on the thesis that innovative and disruptive technology companies generate extraordinary returns. The ARK Innovation ETF, ticker ARKK, attracted investors who agreed.
The world locked down in 2020 during the COVID pandemic and the US Federal Reserve cut interest rates to 0%. Demand for digital services surged and ARKK’s holdings, which were concentrated in companies like Tesla, Zoom, Teladoc, Roku, and a collection of genomics and fintech businesses, soared. In 2020, the fund returned over 150%, and billions of dollars flooded in. Cathie Wood became a celebrity fund manager, her pronouncements on Tesla, Bitcoin, and the future of technology drawing enormous media attention.
The subsequent years were brutal. As interest rates rose and speculative sentiment cooled, ARKK fell sharply. Several of its largest positions suffered steep declines — Teladoc Health lost more than 90% of its value from peak to trough. Zoom Video, a pandemic beneficiary, fell from its highs by over 80%. Investors who had poured money into the fund at its peak suffered devastating losses, with a five-year return of −47.74%.
Predicting which technologies will transform industries is one thing; identifying the businesses that will survive and profit from that transformation, and purchasing shares at the right price, has proved far more difficult.
Berkshire Hathaway
Warren Buffett began acquiring shares in a struggling New England fabric company called Berkshire Hathaway in the early 1960s. What he built over the following six decades is one of the most remarkable business constructions in history.
Beginning in the late 1960s, Buffett used the cash generated by Berkshire’s insurance operations — specifically, the “float” that policyholders pay before claims are made to fund ownership of great companies. Berkshire wholly owns businesses in insurance (GEICO), freight rail (BNSF), energy (Berkshire Hathaway Energy), manufacturing, and retail. It holds major listed equity stakes in American Express, Coca-Cola, Apple, and Bank of America — businesses with dominant brands, global scale, and decades of consistent profitability. As of 2025, Berkshire’s cash and equivalents alone exceeded $350 billion.
The Game You Choose to Play
Speculation, predicting winners in the next wave of technology innovation and investing are not the same.
As disciplined investors, we do not ask “will price go up?” Rather, we ask: What does this asset do? How does it generate value? What does this asset produce for its owners?
Examined through that lens, the three options are not comparable.
Five Years of Evidence
We are disciplined investors. We know why we own what we own.
At AXIAM, we manage capital for people who want to grow wealth by investing rationally and safely. We have a repeatable investment process focused on businesses that already lead in their respective industries. That means owning businesses that produce something the world needs, that charge fair prices for it, that generate real cash, and that have already demonstrated over years and decades that they can continue to do so.
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