I won't keep you in suspense. If you had invested $500 in Bitcoin (BTC -0.11%) five years ago, you'd have about $5,238 today. In other words, you would have more than 10x returns.
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There are some very good reasons why it has been a particularly strong five-year period for the leading digital currency, including but not limited to:
- Bitcoin is easier than ever to invest in. Not only have cryptocurrency exchanges grown and become generally safer, but new ones have emerged and there are more places to buy Bitcoin, such as PayPal and Block's Cash App.
- Bitcoin exchange-traded funds (ETFs) finally gained regulatory approval, further improving access for both retail and institutional investors. The popular iShares Bitcoin Trust is one major example.
- In more recent history (since the election), the regulatory environment has become much more crypto-friendly. For example, it was recently clarified that banks can serve as cryptocurrency custodians.
- The stock market has been rather turbulent for much of the last five years, including the 2021 speculative asset boom and 2022 bear market, and this led many investors to seek other stores of value.
This is not an exhaustive list. The key takeaway is that Bitcoin's popularity has continued to grow -- especially among institutional investors -- and the regulatory environment is becoming much more accommodating.
