The Rolls-Royce share price has surged in the last five years and is beating top cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH). It has also outperformed top stock benchmarks, such as the FTSE 100 and S&P 500.
Rolls Royce shares have surged by 1,200% in the last five years, while Bitcoin has soared by 840% in pound terms in this period. £1,000 invested in the stock on January 1, 2021, would be worth £10,227 today, while the same amount in Bitcoin would be worth £4,222.
The same trend has occurred this year, with the RR stock jumping by 82%, as Bitcoin has soared by 9.7% in sterling terms and 20% in US dollar terms.
Rolls-Royce share price vs BTC in $ and £
Why Rolls-Royce Share Price Has Surged
Rolls-Royce Holdings is a top industrial company that manufactures aircraft engines, power equipment, and defense items, including engines that power submarines.
Most of its business is in the civil aviation industry, where it manufactures popular engines for widebody planes. While it generates revenue by selling these engines, most of its income and profits come from the long-term service contracts it enters into with airlines.
Therefore, the Rolls-Royce share price has surged in recent years as the industry has recovered from the pandemic.
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It has also benefited from the ongoing war in Ukraine, which has led to more defense spending in Europe and the United States. It is also playing a role in the AUKUS submarine program that includes the US, Australia, and the UK.
Additionally, its power business is booming due to the revival of nuclear power and the advancement of artificial intelligence. Some of its power engines are used widely to power data centers globally.
All these developments have made Rolls-Royce a fast-growing and profitable firm. The most recent results showed that its revenue rose to £9 billion in the first half of the year, surpassing the £8.1 billion it generated last year. Its free cash flow jumped to £1.58 billion from £1.15 billion last year.
This growth has prompted it to reinstate its dividend and also repurchase shares worth approximately £1 billion.
Is Bitcoin a Better Buy?
Comparing the Rolls-Royce share price and Bitcoin is an apples-to-oranges comparison. Rolls-Royce is a large company that sells products, while Bitcoin is a digital currency that does not pay dividends.
Still, in the long term, the Bitcoin price is expected to outperform Rolls-Royce due to the dynamics of supply and demand. Bitcoin has a maximum supply limit of 21 million tokens, of which most have been mined. Many have been lost, and the supply in exchanges has dropped to the lowest level in years.
Analysts still believe that Bitcoin has more upside to go, with Sergey Nazarov, the founder of Chainlink, predicting that it will reach $1 million over time. BlackRock expects it to reach $700,000 in the coming years.
Therefore, while the Rolls-Royce share price has outperformed Bitcoin over the last five years, BTC is likely to be a better performer. Additionally, it has already increased from nearly zero in 2009 to $111,000 today.
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