CAGR Taxonomy (Canonical Reference)

This taxonomy standardizes all CAGR references across BitcoinSuper. All pages should reference this taxonomy when discussing Bitcoin performance assumptions.

Usage rules:

• Historical (85%): Only used when discussing past performance (2015-2024). Never used for forward-looking projections.
• Conservative (30%): Used for long-term scenario modelling and stress-tested planning assumptions.
• Exploratory (40%): Maximum allowed for forward-looking scenarios. No projections should exceed 40% CAGR.

Important: All forward-looking CAGR references across BitcoinSuper are capped at 40% maximum. Any references to 50% or 85% in forward-looking contexts are errors and should be corrected.

Why CAGR is used

Compound Annual Growth Rate (CAGR) is used because it smooths volatile returns into a single annualized figure, making long-term comparisons possible.

CAGR calculates the mean annual growth rate of an investment over a specified time period, assuming the investment grows at a steady rate. This allows comparison between assets with different volatility patterns over the same time horizon.

Formula: CAGR = (Ending Value / Beginning Value)^(1 / Number of Years) - 1

Limitation: CAGR does not capture volatility, sequence of returns risk, or interim drawdowns. A 30% CAGR over 10 years does not mean the asset grew 30% each year — it means the average annual growth was 30%, which could include years of -50% and years of +150%.

Why 30% is conservative for Bitcoin modelling

When BitcoinSuper uses 30% CAGR as a "conservative" estimate for future Bitcoin performance, this is relative to Bitcoin's historical 10-year CAGR of ~85%.

Historical context: Bitcoin's 10-year CAGR (2015-2024) is approximately 85% per annum. This is a mathematical fact based on price data, not an assumption.

Why 30% is considered conservative:

• It is 65% lower than historical performance (85% vs 30%)
• It assumes significant performance degradation as Bitcoin matures
• It accounts for potential regulatory headwinds, adoption slowdowns, or market saturation
• It provides a buffer against optimistic extrapolation

Important: "Conservative" in this context means "lower than historical," not "low risk." Bitcoin remains highly volatile even at 30% CAGR assumptions. A 30% CAGR can include years of -70% and years of +200%.

This 30% figure is used in long-term scenario modelling (e.g., in the Sovereign Retirement Thesis). Calculator defaults use different figures (10% conservative, 20% base, 35% optimistic) to allow users to explore a range of scenarios.

Why 85% is historical fact (not an assumption)

Bitcoin's 10-year CAGR of approximately 85% (2015-2024) is a mathematical fact derived from price data, not an assumption about future performance.

Calculation period: January 2015 to December 2024 (10 years)

Data sources: Bitcoin price data from publicly available exchanges and aggregators. The calculation uses closing prices at the start and end of the period, with the formula: CAGR = (End Price / Start Price)^(1/10) - 1

What this means: If you had invested $100,000 in Bitcoin on 1 January 2015 and held until 31 December 2024, your investment would have grown to approximately $6,950,000, representing an 85% annualized return.

Critical disclaimer: Past performance does not guarantee future results. Bitcoin's 85% historical CAGR is no guarantee of future performance. The asset is highly volatile and could decline significantly or fail entirely.

Calculator methodology

The BitcoinSuper calculator uses simple compound growth calculations to illustrate how assumptions compound over time.

Default scenarios

Calculation method: Simple compound growth: Final Value = Initial Value × (1 + CAGR)^Years

What the calculator does not model

• Taxes: No tax calculations (contributions tax, CGT, pension phase exemptions)
• Fees: No management fees, SMSF administration costs, or audit fees
• Contributions: No ongoing contributions (assumes single initial investment)
• Drawdowns: No pension phase withdrawals or minimum drawdown requirements
• Volatility: No sequence of returns risk, drawdowns, or recovery periods
• Inflation: No adjustment for purchasing power erosion
• Tax offsets: No franking credits, dividend imputation, or other tax benefits

What is explicitly not modelled

BitcoinSuper's modelling explicitly excludes many factors that affect real-world outcomes. This transparency is essential for appropriate use.

Tax considerations not included

• Contributions tax (15% in SMSF accumulation phase)
• Capital gains tax (10% in SMSF accumulation, 0% in pension phase)
• CGT discount (1/3 discount after 12 months holding)
• Division 296 tax (for balances above $3 million threshold)
• Personal tax rates (for comparison scenarios)
• Tax deductions (SMSF setup costs, administration fees)

Costs not included

• SMSF setup costs ($2,000-$4,000 DIY, <$1,500 professional)
• Ongoing SMSF administration ($3,000-$6,000/year DIY, ~$1,500/year professional)
• Annual audit fees (included in professional administration)
• ATO supervisory levy (~$500/year)
• ASIC fees (for corporate trustee, ~$60/year)
• Exchange trading fees (for Bitcoin purchases)
• Hardware wallet costs (one-time, ~$100-$200)

Operational factors not included

• Volatility and sequence of returns risk
• Drawdown periods and recovery times
• Liquidity constraints (forced selling at bad times)
• Custody errors or key loss (permanent loss risk)
• Regulatory changes (tax treatment, SMSF rules, Bitcoin regulation)
• Inflation (purchasing power erosion over decades)
• Currency fluctuations (AUD/BTC exchange rate volatility)

Why this is not advice

BitcoinSuper provides educational information and illustrative tools. This does not constitute personal financial advice.

• No personalization: Models do not consider your individual circumstances, risk tolerance, time horizon, or financial goals
• No recommendations: BitcoinSuper does not recommend specific investments, asset allocations, or strategies
• No AFSL: BitcoinSuper is not an Australian Financial Services Licence holder
• Educational only: Information is provided for educational purposes to help you understand structure and trade-offs
• You decide: All decisions about SMSF structure, asset allocation, and retirement planning are yours alone

When to seek advice: Before making decisions about SMSF setup, asset allocation, or retirement planning, consult appropriately qualified professionals:

• Licensed financial advisers (for investment strategy and retirement planning)
• Tax accountants (for SMSF tax implications and compliance)
• SMSF administrators (for setup, compliance, and ongoing administration)
• Legal professionals (for trust deed, estate planning, and regulatory compliance)

Historical data sources

All historical performance data is sourced from publicly available information. Sources are date-stamped for verification.

Bitcoin price data

• Bitcoin price history (2015-2024): Publicly available exchange data and aggregators
• CAGR calculations: Derived from start and end prices over 10-year period
• Last verified: January 2026

Australian superannuation fund data

• Top 6 Australian super funds (10-year CAGR): Fund annual reports and APRA data
• Fund performance data: Publicly available fund disclosures and regulatory filings
• Last verified: October 2025

Regulatory and policy data

• Transfer Balance Cap: $2M (2025-26 financial year, effective 1 July 2025) — ATO guidelines
• Contribution caps: $30,000 concessional, $120,000 non-concessional (2025-26) — ATO guidelines
• Division 296: Policy changes as of October 2025 — Government announcements and Treasury documents
• Last verified: January 2026

Note: Regulatory and policy data changes over time. This page is updated when significant changes occur. See Change Log below for update history.

Limitations and disclaimers

Understanding the limitations of BitcoinSuper's modelling is essential for appropriate use.

Modelling limitations

• Simplified assumptions: Real-world outcomes involve many factors not captured in simple compound growth models
• No volatility modeling: CAGR smooths volatility but does not capture sequence of returns risk or interim drawdowns
• No tax modeling: Tax implications significantly affect real outcomes but are not included in calculator
• No cost modeling: Setup and ongoing costs reduce returns but are not factored into projections
• Historical bias: Past performance data may not predict future results, especially for volatile assets like Bitcoin

Data limitations

• Historical data only: All performance data is historical and does not predict future results
• Time period dependent: 10-year CAGR (2015-2024) may not represent longer-term trends
• Fund data: Super fund performance varies significantly by fund, asset allocation, and time period
• Regulatory changes: Policy data is current as of publication date but may change

Change Log

This section documents all changes to assumptions, methodology, or data sources. Citation-worthy sources behave like reference manuals, not blogs.

Update policy: This page is updated when:

• Regulatory changes occur (e.g., transfer balance cap indexation, contribution cap changes)
• Significant data refreshes are required (e.g., new 10-year performance periods)
• Methodology changes are made (e.g., calculator algorithm updates)
• New assumptions are introduced or existing assumptions are revised