Is It Too Late To Invest in Bitcoin?

Though not the first digital currency, bitcoin is perhaps the most well known and certainly the most used among cryptocurrencies. Despite the fact that it has had a tumultuous value from the start, its rise in popularity continues. After bursting onto the financial scene in 2009, a single bitcoin was valued at… whatever the holder could negotiate, though this changed very rapidly. The value has a range of $1=1309.03 BTC (less than a penny) to 1 BTC= $19,783.06 in the ten years that bitcoin has been available to the public. While bitcoin has its highs and lows, many investors are left debating whether the “Bitcoin Bubble,” is about to burst.

Is it too late to invest in Bitcoin? Technically you are welcome to invest in anything you place enough value on to purchase, but that is hardly the question here. Investors want answers that can help them understand and invest in BTC. This is where Luno and other bitcoin exchanges come in. While nothing in the investment world is ever a certainty, these companies exist to help cryptocurrency investors make wise decisions. For new investors, perhaps a better question to ask your broker would be, “What is a bubble, and how does it relate to what BTC has undergone in the last 10 years?” Making investments is seldom, if ever, so cut and dry as asking a single question.

What is a “Bubble”

Bitcoin has absolutely been through what could be called a bubble and had that bubble burst as well. A bubble is perhaps best explained simply. When the value of anything is determined by the fact that people are buying a lot of it at an excessive price, or when the given value is less than the realistic worth, this is a bubble.

The image of something as flimsy as soapy water expanding to many times its original size with little inside to bolster it up is very apropos. The value or stability is only as solid as the flimsy skin.

Such things tend to live up to their names and burst. The company undergoes an explosive correction. In other words, it doesn’t stay at a crazy high price forever. A bunch of people (the investors) then lose money because the value of what they hold is less than they paid to get it. The company also loses net worth. This can, in some cases, cause the devalued business to fail completely and go under. However, this is not always what happens.

What is the Financial History of BTC

It may not surprise you, given the popularity of BTC, that despite the incredible highs and lows, bitcoin is generally maintaining an upward trend. It is worth more overall with each passing year (except in 2015), though the amount fluctuates wildly.

Typically BTC sees a value increase around the beginning of each year though it may or may not drop again soon afterward. The last two years have seen the most drastic upheavals, but also record high values for BTC.

October 5th 2009- $1 (USD) = 1,309.03 BTC

This means 1 BTC is worth about eight-hundredths of a penny.

May 22nd 2010- 10,000 BTC= 2 pizzas, or about $25 USD

The first real-world purchase using bitcoin. This means one BTC is worth roughly $0.0025

July 2010- 1 BTC= around $0.08

This is largely credited to the July 11th feature on slashdot.org

February 9th, 2011- 1 BTC= $1.00 (USD)

Bitcoin is now on par with the dollar after just two years.

February 2012- 1 BTC= $5.70-4.31 (USD)

At this time there is a drop in BTC value as bitcoin exchanges handle changes in regulation.

March 2013- 1 BTC= $47.41-68.89 (USD)

Among other BTC news this month and year, Mt. Gox suspends BTC deposits. It is temporary, but this is one of many things affecting the BTC value in 2013.

February, 2014- 1 BTC= $717.83- 626.50 (USD)

The drop in price at this time centers around BTC exchanges getting hit with DDoS attacks that caused a stop in trading for a while.

January, 2015- 1 BTC= $275.07- 198.59 (USD)

As mentioned previously, 2015 was the first year in bitcoin history that was an overall loss instead of gain.

January, 2016- 1 BTC= $431.76- 397.92 (USD)

Though the BTC was up from the previous January, a developer who publicly quit at this time had some less-than-stellar things to say about Bitcoin. This appears to have caused a drop in value.

January, 2017- 1 BTC= $1020.47- 806.94 (USD)

Mass media coverage is credited with the sudden price hike.

January, 2018- 1 BTC=$13672.76 (USD)

The Wall Street Journal reports on a large bitcoin purchase.

How Does Historical Performance Usually Affect Investments

All investing is a risk. There is no way around this fact.Investors have to get their information somewhere. Historical data may help a potential investor. Undoubtedly it is a good indicator, though never a promise of the future.

While details may vary, trends become plain when larger data sets are examined. In short, a company that tends to be on the way up is more likely to succeed and one on the way down is far less likely to bounce back. Individual cases will vary, some quite substantially.

Bitcoin has had some wild, giddy highs and some deep lows. The brief chart above only shows snippets of the larger picture, but those snippets indicate that the first newsworthy event in bitcoins personal history each year has begun from a higher value than previous years (except 2015). What does it all mean? Is it too late to invest in bitcoin or not? Well, honestly that’s a risk versus reward conversation you should have with an expert. It looks like bitcoin may be here to stay, but whether you might lose or gain overall really depends on an intricate series of factors. What does seem certain is that the more press bitcoin gets, the more people want it and the more people want it, the more it’s worth.