Bitcoin (BTC 1.11%) had a shaky reputation in 2015. Although it outperformed the stock market and gold that year, skeptics still considered it a speculative asset and not a legitimate investment.
Some people still hold this view about Bitcoin, but it has become a popular asset among both retail and institutional investors, and Bitcoin exchange-traded funds (ETFs) have taken in over $50 billion. Let's see how much a small position in Bitcoin from 2015 would have grown during the past decade.
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The growth of a $100 investment in Bitcoin
If you had invested $100 in Bitcoin 10 years ago, you would have about $20,000 today, as the leading cryptocurrency has grown by nearly 20,000% (as of Dec. 22). The S&P 500, on the other hand, delivered a total return of about 300% during the same period.
It's important not to take the wrong lessons from this. The U.S. stock market has been around for centuries and has historically been one of the most effective ways to build wealth. It has had an average return of 10% per year during the past 50 years.
Bitcoin is a highly volatile digital asset that has been around since 2009. Investing in stocks was a much safer option than investing in Bitcoin in 2015, and that remains true today.
CRYPTO: BTC
Key Data Points
There's nothing wrong with investing in riskier assets like Bitcoin with a small amount of money -- no more than 5% of your portfolio. You won't be taking on too much risk, and you can still achieve impressive returns, with Bitcoin being a prime example of this.
