Is Bitcoin a Good Investment?



Last Updated: December 8, 2018 at 9:04 AM EST

The question above has been asked frequently by the observers of Bitcoin (BTC) and the cryptocurrency market in general. Some argue that Bitcoin experiences a high level of volatility and must always be considered a high-risk asset. Another group contends that the Bitcoin market is a bubble and as such, isn’t supposed to be considered an investment at all. Then there are others who have seen the wonders of Bitcoin in the lives of people by making them wealthy overnight and decided that no matter what, they will stand with Bitcoin. However, which of these groups is right?

Bitcoin as a form of currency and its trading market is relatively new, about ten years old now. The price, in its early days when it was used on Silk Road (the black market to buy stuff off the dark web), was determined by its demand. Silk Road played a significant role in the rise in the price of Bitcoin as it accepted only bitcoins as a payment method for transactions. Fast forward a few years later after the creation of Bitcoin, it grew in value from $0.001 to $31.50 on 8th of June, 2011. In a month, the first wave of the volatility of Bitcoin was experienced as prices of Bitcoin dropped to $11.00. Then, Bitcoin wasn’t accepted mainstream and was mostly used on the dark web. The next month after the $11.00 drop, Bitcoin further fell to a $7.80 price and another $4.77 drop.

The massive Profit

The question still however remains; is Bitcoin a good investment? The price of Bitcoin rose from a mere $0.001 at its launch in 2009 to its current $4,000 price. If you had repurchased $1 worth of Bitcoin then, you would have been worth $4 million today. Keep in mind that the price of Bitcoin has experienced spikes and at a point, your $1 investment would have become about $19 million. That’s some super crazy ROI in just ten years. ‘Financial opinion givers’ that say Bitcoin is a bad investment never state this fact. They also ignore the fact that some of the most valued stocks in the American stock market, Amazon and Apple, have never given its buyers close to that kind of ROI, even after more than 20 years and 38 years respectively after going public.

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Apple launched its Initial Public Offering (IPO) late in 1980 with a $22 price tag for a share. If you had purchased a share at that price, factoring in the four apple stock splits, today you would have 56 shares and been ultimately worth $9,400. Amazon had its IPO in 1997 at $18 a share, and if you had bought one Amazon share back then, factoring in its three stock splits, you would have 12 Amazon shares and have a worth of close to $20,000 today. The emergence of Bitcoin and its subsequent rise have made the rise in the value of various stocks seem like a joke.

Papa John’s Pizza delivered two pizzas worth about $50 to Laszlo Hanyecz for 10,000 Bitcoin. Today, their $50 would be worth $40 million and at Bitcoin’s peak would have been worth $190 million.

The same ‘financial opinion givers’ that say Bitcoin is a bubble and its recent price crash is perfect evidence always seem to forget the fact that the price of Amazon crashed from $100 to $9 in the dot-com bubble of 2000. Today, an Amazon share is worth over $1,600.

The Big Market

Even the trusted stock market experiences its rises and falls. There is no broad market without a certain level of volatility and the fact that Bitcoin price rises and falls are just evidence that it is yet, another market ruled by buyers and sellers. The banks talk nonsense about Bitcoin saying it’s not viable as an investment but behind the scenes, store Bitcoin and other cryptocurrencies in the event that the world adopts Bitcoin as a currency. It’s no more a ‘theory’ that banks store Bitcoin. It’s now all in the news.

The world is opening its eyes. Information is becoming available to them at the click of a button. The world will realize that governments don’t care about them and at the people’s expense, devalue our fiat currency.

The world will understand that it needs cryptocurrency and Bitcoin, which is referred to as cryptocurrency’s ‘reserve currency’ will be fully adopted. Check the news. Read about the reasons for the recent protests in France. Read about the cause of the global economic meltdown in 2008 that led to the creation of Bitcoin. Read about how citizens of hyperinflation-ridden countries like Venezuela, Colombia, Argentina and Zimbabwe are adopting Bitcoin. Only then, will you know whether Bitcoin is a good investment or not.