For antsy investors, the hardest part of making money with Bitcoin is doing nothing.
There could be some overlap between the properties of cryptocurrency and stocks, but certain differences are stark and persistent. Among them is volatility, as even Bitcoin (BTC 1.51%), the cryptocurrency with the biggest market cap, is prone to sharp and sudden drawdowns.
Cryptocurrency is supposed to be the people's money, and I'd hate to see anyone take an unnecessary loss from trading Bitcoin. So, if you're reeling from recent events in the crypto-sphere, I offer you a quick dose of perspective on the power of doing absolutely nothing. For example, a $100 Bitcoin investment five years ago would be worth $370 today.
Bitcoin's brutal battery
After resting comfortably at $29,000 for a solid month, Bitcoin took a breathtaking drop to $26,000 the other day. That's a 10% cliff dive in just a few days. But unlike investors in the realm of stocks, Bitcoin traders can't cite an earnings report or a disappointing product launch as a cause for the drop.
Asking why it happened is a natural response, but it might only lead to frustration in this instance. The general consensus seems to be that the Bitcoin sell-off was prompted by the one-two punch of hawkish-sounding statements from a Federal Reserve Board meeting ("... most participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy.") followed by aWall Street Journal report that Elon Musk's SpaceX had sold its Bitcoin holdings.
The financial press needs something to talk about during a slow, low-volume summer for stocks, and the Bitcoin rout provided ample fodder for commentators.
Stay small, and just HODL
So, all of a sudden, folks are worried about SpaceX's crypto holdings (or lack thereof). In their panic, they apparently forgot that financial behemothBlackRock is working on getting approval for a spot Bitcoin exchange-traded fund (ETF).
Now,that's newsworthy. BlackRock's clout is considerable, its pockets are incredibly deep, and a spot Bitcoin ETF would truly be a game changer. BlackRock's crypto involvement matters much more than SpaceX's trades. It may even, perhaps, be more essential than the Fed's economic outlook, which can change from one meeting to the next.
If these considerations aren't helping you sleep at night, feel free to take a glance at Bitcoin's history of drawdowns. If you're going to HODL (hold on for dear life) with calm and confidence, you'll need to make volatility your friend (or at least a roommate you can live with).
After all, Bitcoin has had multiple drawdowns of 30% or more. I can't make any guarantees about the most recent pullback from around $69,000, but previous crashes invariably resolved with new Bitcoin bull markets.
In addition to learning one's history, it certainly helps to maintain small positions with cryptocurrency. Thus, a mere $100 stake in Bitcoin five years ago, when it was trading at around $7,000, would have resulted in an immediate 50% crash as the digital coin fell to $3,500 in early 2019. But then, turning a $100 investment into $50 shouldn't be too painful for most investors.
Fast-forward to the present, and with Bitcoin's price gyrating wildly but landing near $26,000 from the starting point of $7,000, that $100 investment would now be worth approximately $370. That's an impressive return on one's capital, just for having sat on one's hands for half a decade. It's true that you could have cashed in your Bitcoin position for $980 at the very peak in October 2021, but that's an unrealistic target and almost everyone missed it. Patient ownership over the long term beats quick-draw day trading almost every time.
Ultimately, the events concerning SpaceX, the Fed, and even BlackRock shouldn't be of life-changing consequence to investors who are willing to stay small and extend their time frame.
And just remember that a dose of perspective is an effective sleep aid for headline-harried HODLers when Bitcoin bends and buckles.
David Moadel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.
FAQs
For example, a $100 Bitcoin investment five years ago would be worth $370 today.
How much would 1 Bitcoin be worth in 5 years? ›
We predict that Bitcoin will hold an average price of $60,000 in 2024, thanks to the Halving event, and settle more in 2025 with an average of $65,000. In 2026, we see Bitcoin trading as high as $90,000 by the end of the year. By 2030, we predict that Bitcoin could reach a high of $160,000.
What if I invested $1,000 in Bitcoin 5 years ago? ›
If you had invested $1,000 into bitcoin five years ago, the investment would have grown by 1,352% and be worth around $14,524 as of Feb. 14. If you had bought $1,000 worth of bitcoin 10 years ago, it would have grown by 7,644% and be worth around $77,443 as of Feb.
How much will $1000 in Bitcoin be worth in a year? ›
Bitcoin One Year From Now
That said, Modulus' projections indicate that in one year, Bitcoin may rise to $96,000. “Were that projection to come to fruition, a $1,000 investment today could be worth approximately $1,333 in twelve months, though it could also become $750 if prices fall.
How much to invest in Bitcoin to become a millionaire? ›
While this is a lower-bound scenario, we can use it as a baseline to show what it takes for investors to become Bitcoin millionaires. Assuming an annualized return of 30%, one would need to invest roughly $85,500 annually for five years to hit millionaire status. Over 10 years, this number falls to around $18,250.
What if I bought Bitcoin 5 years ago? ›
Bitcoin prices have fallen over 30% from their high twice, and over 60% once, over the past five years alone! But you'd be pretty happy if you'd bought five years ago and held on for dear life. A $1,000 investment in Bitcoin five years ago will have grown to over $13,000 today.
How much will $1 Bitcoin be worth in 2025? ›
Bitcoin Overview
| Year | Minimum Price | Average Price |
|---|
| 2024 | $84,475.55 | $87,676.23 |
| 2025 | $121,440.85 | $124,947.50 |
| 2026 | $166,264.37 | $171,262.87 |
| 2027 | $251,829.81 | $258,680.13 |
8 more rowsOn July 1, 2013, Bitcoin traded for around $90.80. A $1,000 investment in Bitcoin could have purchased 11.0132 BTC at the time. Based on a price of $34,055.98 at the time of writing, the $1,000 investment would be worth $375,065.32 today. This represents a hypothetical return of 37,406.5% over the last 10 years.
What will $1000 of Bitcoin be worth in 2030? ›
If Wood is correct and Bitcoin does reach $3.8 million by 2030, an investment of $1,000 would be worth over $60,000. This would result in a compound annual growth rate (CAGR) of over 100%. Read Next: Bitcoin has jumped another 45% already this year – how much would you need to get started today?
Is it worth buying $1000 of Bitcoin? ›
A $1,000 investment today could buy 0.0230 BTC based on a price of $43,403.20 at the time of writing. If Bitcoin hits $1 million as predicted by Wood Several times, the $1,000 investment would be worth $23,000, representing a return of 2,200%.
Bitcoin's (BTC 0.99%) value has skyrocketed 4,830% in the past 10 years, translating to an annualized return of 74% per year. This means that a relatively small $4,000 investment 10 years ago would've made you a millionaire today.
What happens if I put 500 in Bitcoin? ›
If Bitcoin returns to all-time highs, a $500 investment today would be worth $822.50, representing a return of +64.4% which bring a little ROI to your investment.
Can Bitcoin go to a million? ›
Known for her innovative investment approach, Cathie Wood predicts Bitcoin will surpass $1 million sooner than her previous estimate of 2030.
Can you still get rich on Bitcoin? ›
However, it's still possible to make money with Bitcoin. You can trade it, lend it, hold it or earn it. Returns aren't guaranteed on this volatile asset; just as you can make money as the price goes up, it's also possible you could lose money if the price goes down.
Did anyone become a millionaire from Bitcoin? ›
Out of all 425 million crypto users, just 22 are crypto billionaires. There are 182 crypto centimillionaires. And there are 88,200 crypto millionaires.
Is Bitcoin a good way to get rich? ›
Bitcoin is a risky investment with high volatility, and generally should be considered only if you have a high risk tolerance, are in a strong financial position already and can afford to lose some or all of your investment.
How much will $1 Bitcoin be worth in 2030? ›
Fidelity Predicts: $1B per 1 BTC by 2038 — 2040
It claims the value of Bitcoin will grow steadily to about $1 million per full Bitcoin by 2030.
Is investing $1000 in Bitcoin worth it? ›
A $1,000 investment today could buy 0.0230 BTC based on a price of $43,403.20 at the time of writing. If Bitcoin hits $1 million as predicted by Wood Several times, the $1,000 investment would be worth $23,000, representing a return of 2,200%.
How much would I have if I invested $10,000 in Bitcoin in 2010? ›
To be exact, a Bitcoin investor who purchased $10,000 worth of Bitcoin in 2010 would have earned $201.56 mln. In contrast, an investor who purchased $10,000 worth of gold in 2010 would have experienced a negative return of $9,981.
How much was 1 Bitcoin worth 10 years ago? ›
Prices and value history
| Date | USD : 1 BTC |
|---|
| Jan 2009 – Mar 2010 | basically nothing |
| May 2010 | less than $0.01 |
| Feb 2011 – April 2011 | $1.00 |
| Nov 2013 | $350–$1,242 |
38 more rows