If there is anyone in the field of Bitcoin and crypto who can tell you something, it’s WANT editor Robert Kroes. In this article, he explains to you exactly how profitable it is to invest.
Bitcoin and crypto are not having the best year so far in 2022. The question, of course, is how profitable investing in Bitcoin and crypto is. We make some comparisons.
How profitable is Bitcoin (BTC) investing?
First, let’s look at how profitable investing in Bitcoin itself is. If you had bought a Bitcoin (BTC) on January 1 of this year, it’s a bit of a shock. Indeed, at the value at the time of writing ($21,582.53) you would have suffered a loss of 53.37%. However, if we widen the investment horizon to 5 years we see a very different picture. The Bitcoin (BTC) price was then $ 4,565.30. This would have given you a 372.75% return at the current price. The question, of course, is how this compares to other popular investments.
By the way, you can of course analyze all the results and live Bitcoin and crypto prices 7 days a week and 24 hours a day on the site of Tradeincrypto.com.
Now that we know this we will quickly start our comparisons. Which investment offers the most profit?
Bitcoin (Image: Pexels / Karolina Grabowska)
#1 Is Bitcoin investing more profitable than investing in the AEX index?
If we look at the result of the AEX since January 1 of this year, an investment would have given you a loss of 11.05%. This is better than if you had bought BTC. On the other hand, we see that if you had bought AEX shares 5 years ago you could have credited 37.17% return. So in the long run, Bitcoin is the better investment in this case.
#2 Correlation: investing in BTC or Nasdaq?
When we analyze the Bitcoin price we often see that there is correlation between the BTC and Nasdaq. The question is whether this is also true for returns. Those who invested in the Nasdaq at the beginning of this year should have recorded a loss of 17.06%. This is less than the loss on the BTC. Again, in the longer term, we would have been better off choosing Bitcoin, because the 5-year return on the Nasdaq index is significantly lower at 98.16%.
#3 Buy Bitcoin or invest in the world’s largest companies?
Often, as an investor, you see ads about how investing in one of the largest companies in the world could change your life. The question is whether that change would be greater or less than if you invested in Bitcoin. We list the results from January 1 (year to date) and over 5 years.
Apple inc: YTD – 5.97%, 5 year yield + 316.93%
Microsoft Corp: YTD -17.57%, 5 year yield + 280.04
Alphabet Inc (parent Google): YTD -20.18%, 5-year return: + 148.36%
Amazon.com: YTD -19.66%, 5 year yield: + 181.20%
Tesla Inc: YTD -21.32%, 5-year return: + 1,180.80%.
Crypto (Image: Pexels / Karolina Grabowska)
#4 Who gets more returns? Warren Buffett or Bitcoin
Perhaps the greatest investment oracle in the world is American Warren Buffett, who, incidentally, is an outspoken opponent of Bitcoin and crypto. His investment vehicle Berkshire Hathaway Inc. is therefore closely followed. So far, the stock is losing 2.74% since January 1. In 5 years, the return on the shares of the Oracle of Omaha is 62.51%.
#5 Digital gold or real gold?
Another nickname for Bitcoin (BTC) is also called digital gold. Naturally, this calls for a comparison of returns between Bitcoin and real gold.
If you had bought gold at the beginning of this year you should have recorded a loss of 3.51% by now. Those who bought gold five years ago could now record a return of + 36.25%.
Based on these comparisons, we see a number of striking conclusions. First, it is notable that all major investments are at a loss since January 1 of this year. In doing so, Bitcoin price patterns may indicate correlation or a role like digital gold, but in the short term, returns in Bitcoin are much worse than returns in most other major investments.
Coins (Image: Pexels / Alesia Kozik)
In the longer term, we see that Bitcoin (BTC) is the investment with the highest return, with Tesla shares being the exception that confirms the rule. With that, it seems good to adopt a long-term investment strategy for Bitcoin (BTC) and spread out your investments.
Note: We never give financial advice, so you can’t interpret our contributions that way either. Always do your own research and decide rationally if, when, what and how much you want to invest in.
Sources: tradeincrypto.com and tradingview.com.