Imagine discovering an investment that goes up 50% on average each year with occasional big drops that you can buy for even further gains.
Would you buy it?
No.
What if that asset went up 10% on average each year? Would you buy it?
Yes. Chances are, you already have. I’m talking about Bitcoin.
You pay a high price for a cheery consensus
That may sound weird. Stupid, even.
Who would turn down a 50% opportunity in exchange for a 10% opportunity? The US stock market only gives you 7% annualized.
I agree. Yet, that’s what people do when they buy Bitcoin during bull markets like today’s.
They don’t buy Bitcoin for $16,000, $32,000, $48,000, or $64,000. Instead, they buy it for $80,000 or more. They heard some people got ridiculously rich with Bitcoin and think they can do it, too.
Two years ago, maybe. That was during the depths of a wretched crypto bear market.
Now?
One Bitcoin is worth more than the average US worker’s annual salary. Bitcoin’s market cap is almost $2 trillion.
Most people can’t afford to buy enough Bitcoin to get rich, and those who already have Bitcoin don’t have enough upside to see the massive multiples necessary to retire their bloodlines.
A letdown, if you want it to be
You won’t find such realistic expectations on social media or the email solicitations you get from other crypto gurus.
Some tell you “banana zone will send prices to the moon” and “S2F” predicts a $500,000 bitcoin in 2025.
Others admit the chance to get rich with Bitcoin has passed, but tell you you need to buy smaller cryptos with bloated market caps and massive selling from insiders.
Nobody will pay $2,500 for a newsletter subscription or spend 50 hours reading investment blogs for a 50% annualized return, even though that beats most traders and every professional fund manager.
They’ll gladly pay as much or more for five altcoin picks that will make you $5 million or a secret strategy to make a quick fortune.
Only one outcome is realistic, but you pay more for the fantasy.
Cryptocurrency is a marathon masquerading as a sprint. They sell you on the sprint, but the real gains come from the marathon.
Your best bet
This is not what you’re supposed to believe.
Consensus opinion told you to buy above $50,000 in 2021, sell at $40,000 in 2022, and buy again at $32,000 in 2023. With that approach, a $50,000 investment would have grown to $75,000 by July 2024.
That’s a 50% return in three years! Way better than the S&P 500’s 16% return over that time.
At today’s price of $90,000, you’re at 60% gains. Boom! You still come out way ahead of the S&P 500 25% return.
Feels great, right?
Your best financial advisors can barely beat the stock market. You crushed them. You gained 60% in three years!
Fun fact:
If you had bought Bitcoin blindly, on a fixed schedule, in a fixed amount, regardless of circumstances, you would have bought at an average price of roughly $40,000 for a 123% gain.
My plan beat both approaches for a return of 160% over that time.
You bought at an average price of roughly $34,000. If you sold when I told you to, you did even better.
Maybe not rich but pretty, pretty, pretty good
While 160% is better than 123%, it’s not the huge, life-changing returns you have in your head.
You might get that with altcoins, but with 50,000 to choose from, you’re going to have to get lucky and get your timing perfect.
Mark, past performance doesn’t dictate future results!
True, but it’s the only way we can set realistic expectations.
Can you get rich with Bitcoin by doubling your money every few years?
Yes, if you start with a decent amount of money, stick around for years, buy the big crashes and bear markets, and buy a lot when you buy.
In other words, you need time, money, and patience.
Most likely, you’re getting into crypto now because you want to make money quickly, with as little effort as possible and don’t have much capital to invest. No time, money, or patience.
The good news?
You can beat 50% annualized returns with Bitcoin.
How?
Wait for better opportunities.
Subscribe to my newsletter, Crypto is Easy, so you know when those opportunities come.
You’ll also get occasional trading opportunities and altcoin reports, as well as access to my plan and everything else you get with your subscription.
Timing is everything
With Bitcoin, you may not end up with fabulous riches, a garage full of Lambo’s, and enough money to build a nuclear bunker, but you’ll do better than all of your friends.
Wall Street is on board. Trump’s a fan. Bitcoin’s network continues to grow.
If you’re patient, you will have tons of upside. It’s all about planning properly.
That may seem disappointing. It’s not what your favorite guru tells you in their email solicitations.
But honestly, is it so bad to wait for a happy, easy way to buy into an asset class that has outpaced every other investment of the past 10 years and offers unlimited growth in the future?
Mark Helfman publishes the Crypto is Easy newsletter. He is also the author of three books and a top Bitcoin writer on Medium and Hacker Noon. Learn more about him in his bio and connect with him on Tealfeed.
