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 1.40%), 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
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.
How much will $100 Bitcoin be worth in 10 years? ›
If this pattern continues into 2030, the price could peak around 2029 or 2030, potentially aligning with Wood's price prediction. If Wood is correct and Bitcoin reaches $3.8 million, a $100 investment in Bitcoin today would be worth $5,510 in 2030. This translates to a compounded annual growth rate (CAGR) of over 95%.
How much will $500 of Bitcoin be worth in 5 years? ›
If I invest $500 in Bitcoin at the start of 2022, how much money will I expect in the next 5 years? I see Bitcoin hovering around $90k by the mid of 2022, if not the entire market is collapsed by that time. In 5 years Bitcoin can easily reach $150k-$250k.
How much is $100 Bitcoin worth right now? ›
The price of 100 Bitcoin in the US is 5.95M USD. Additionally, Bitcoin's price for 100 USD is 6.39M EUR in the eurozone, 7.47M GBP in the UK, 4.36M CAD in Canada, 3.94M AUD in Australia, 71,404 INR in India, 4,365.40 KRW in South Korea, and 6.55M CHF in Switzerland.
What if I invest $100 in Bitcoin 5 years ago? ›
CRYPTO: BTC
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.
What if you put $1000 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 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.
Is it worth putting $100 into Bitcoin? ›
Investing $100 in Bitcoin alone is not likely to make you wealthy. The price of Bitcoin is highly volatile and can fluctuate significantly in short periods. While it is possible to see significant returns in a short time, it is also possible to lose a substantial amount just as quickly.
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 smart to invest in Bitcoin? ›
Sarathy concurs that there are risks involved with investing in these cryptocurrencies, including price volatility, cybersecurity concerns and a lack of regulations compared to traditional currency. Ultimately, it's up to each individual user how much risk they want to take.
For that reason, while current market conditions are favorable for anyone considering buying Bitcoin, it is an asset you should purchase only at your own risk. Because while Bitcoin may have the potential for significant returns, you may also lose most of your investment.
How much will I get if I put $1 dollar in Bitcoin? ›
Convert United States Dollar to Bitcoin
1 USD equals 0.000015 BTC. The current value of 1 United States Dollar is +7.13% against the exchange rate to BTC in the last 24 hours. The current Bitcoin market cap is $1.29T. Create a free Kraken account to instantly convert USD to BTC today.
Who owns the most Bitcoin? ›
So, who are the top holders of BTC? According to the Bitcoin research and analysis firm River Intelligence, Satoshi Nakamoto, the anonymous creator behind Bitcoin, is listed as the top BTC holder as of 2024. The company notes that Satoshi Nakamoto holds about 1.1m BTC tokens in about 22,000 different addresses.
How much will $100 Bitcoin be worth in 2025? ›
If the history of past halvings is any indication, Bitcoin is primed for a rally in late 2024 and 2025, which could see BTC reach a new ATH in the $100,000 range or even higher. If you invest $100 right now, your investment would be worth ~$150 if Bitcoin hits $100k in 2025.
How much is $1000 in Bitcoin today worth in 2030? ›
If Bitcoin continues this pattern into 2030, the price could peak around 2029 or 2030. If Wood is correct and Bitcoin reaches $3.8 million, if you invested $1,000 in Bitcoin now, it would be worth $54,280 in 2030. This would result in a compounded annual growth rate (CAGR) of nearly 95%.
Is buying $100 of Bitcoin worth it? ›
Investing $100 in Bitcoin alone is not likely to make you wealthy. The price of Bitcoin is highly volatile and can fluctuate significantly in short periods. While it is possible to see significant returns in a short time, it is also possible to lose a substantial amount just as quickly.
What if I invested $100 in Bitcoin in 2010? ›
An initial $100 investment held for a tad over 11 years and four months has gained almost 8,000,000,000% and would now be worth $7,964,042,400. In other words, Forbes would be including you in their annual list of the world's richest people.
