If you're a crypto investor, it pays to take a long-term, buy-and-hold approach. There's no better example of this than Bitcoin (BTC +1.62%), the world's most popular cryptocurrency.
Trying to profit from Bitcoin's short-term price swings just doesn't work. The volatility is just too great. If you're investing in Bitcoin, the only approach that works is a "set it and forget it" approach.
Bitcoin's historical performance
Just take a look at Bitcoin's historical returns in the period from 2012 to 2025. During that 13-year time period, Bitcoin posted double-digit returns in seven of those years. And in 2019, Bitcoin just missed, with a 95% return.
Thus, Bitcoin has a better chance than you might think of doubling in value, each and every year. Most recently, Bitcoin turned in a 157% return in 2023, and a 125% return in 2024.
Image source: Getty Images.
No wonder price predictions for Bitcoin are usually off the charts. Even now, with Bitcoin down 40% over the past six months, plenty of investors think it can still double in value this year -- and that's with just eight months left in the year!
On Polymarket, for example, traders currently give Bitcoin a 9% chance of hitting $150,000 this year. That's roughly double its current price of $78,000.
And plenty of investors still think Bitcoin could hit a $1 million price tag within the next few years. By investing now, with Bitcoin trading under the $100,000 price level, you are creating the potential to become a multimillionaire later.
Why a "set it and forget it" approach works
But here's the thing: Bitcoin also suffers through bearish downturns with stunning regularity. Again, just take a look at the numbers. Bitcoin experienced market meltdowns in 2014, 2018, and 2022. Every four years, Bitcoin appears to implode.
CRYPTO: BTC
Key Data Points
If you think Bitcoin's current downturn of 40% is something to get worried about, consider what happened in 2022. Bitcoin fell from a high of $69,000 to a low of $16,000. From peak to trough, that's a meltdown of 77%. According to Cathie Wood of Ark Invest, Bitcoin has suffered at least five different market drawdowns of 77% or higher.
If you're an equity investor, this might come as a bit of a surprise. After all, in the stock market, a drawdown of 20% or higher is typically referred to as a bear market. In the crypto market, bear market reversals are much stronger, and yes, much scarier. You can literally lose everything. In the 2011 market meltdown, Bitcoin lost 94% of its value, and many thought it was going to zero.
That's why a "set it and forget it" approach is the best strategy for Bitcoin. Trust me, it will do wonders for your mental health. You will no longer worry about "flash crashes." You will no longer panic over Bitcoin's dizzying price swings. Instead, you'll sleep soundly at night, knowing that you own the world's top-performing asset. Just set it, and forget it.
