Exploring My Bitcoin Investments: How Much Have I Invested?

Bitcoin is a highly volatile cryptocurrency with a finite supply of 21 million coins worldwide. As of April 10, 2024, the total value of all bitcoins was approximately $1.39 trillion, with a price of over $70,000 per coin. This value is highly variable, with the price of a single bitcoin peaking at nearly $69,000 in November 2021 and falling to less than a third of that value in November 2022.

Bitcoin's volatility makes it a risky investment, and financial experts generally recommend investing no more than you are willing to lose. However, a small amount of bitcoin can be part of a diversified investment strategy.

Bitcoin's value over time

Bitcoin's value has fluctuated significantly since its launch in 2009.

Bitcoin was valued at $0 when it was introduced in 2009. By October 2010, its price had increased from less than $0.10 to $0.20, and it reached $0.30 by the end of the year. In February 2011, Bitcoin's value reached parity with the US dollar for the first time, and its price continued to rise over the next four months, peaking at over $30. However, a sharp recession in cryptocurrency markets followed, and Bitcoin's price dropped to around $5 by the end of 2011.

Bitcoin had a quiet year in 2012, with its value increasing by only a few dollars. In 2013, however, it experienced strong gains. It started the year at $13, crossed $100 by April, and reached $200 by October. By the end of 2013, it had surpassed $1,000 and closed the year at $732. Prices continued to climb slowly through 2016, reaching over $900 by the end of the year.

Bitcoin's price hovered around $1,000 for most of 2017 until it broke $2,000 in mid-May and then skyrocketed to close at $19,188 on December 16. This surge caught the attention of mainstream investors, governments, economists, and scientists, and other entities began developing competing cryptocurrencies.

Bitcoin's price stabilised in 2018 and 2019, with small bursts of activity. For example, there was a resurgence in price and trading volume in June 2019, with the price surpassing $10,000, but it fell to a closing price of $6,612 by mid-December.

The COVID-19 pandemic and subsequent government policies in 2020 fuelled investors' fears about the global economy and accelerated Bitcoin's rise. It opened the year at $7,161 and closed at $28,993 on December 31, 2020, increasing 416% from the start of that year.

In 2021, Bitcoin's price surpassed $40,000 by January 7 and reached new all-time highs of over $60,000 in April as the cryptocurrency exchange Coinbase went public. Institutional interest further propelled its price upward, and Bitcoin reached a peak of $69,000 in November 2021 before closing at $64,921. However, uncertainty about inflation and the emergence of the Omicron COVID-19 variant spooked investors, and the price started to fluctuate more.

Between January and May 2022, Bitcoin's price gradually declined, falling below $30,000 in May for the first time since July 2021. Crypto prices plunged further in June, with Bitcoin dropping below $20,000 by the end of the year.

Bitcoin's fortunes changed again in 2023, with a stellar rise in its price. It opened the year at $16,530 and consistently rose throughout the year, ending at $42,258.

In 2024, the approval of Bitcoin ETFs in the United States and other factors contributed to another all-time high, with values exceeding $73,000 in March. As of August 2024, Bitcoin's price stands at around $60,000.

How much money can be made investing in Bitcoin?

The amount of money that can be made from investing in Bitcoin depends on several factors, including the amount of money invested, the timing of the investment, and the length of time the investment is held.

Bitcoin is a highly volatile asset, and its price can fluctuate significantly in a short period. For example, in November 2021, Bitcoin reached an all-time high of just under $69,000, but as of June 2024, its price had dropped to around $24,000. This volatility means that investors need to carefully monitor their profits and losses and make strategic decisions about when to buy and sell.

One strategy that some investors use is to buy Bitcoin during extreme dips in its price, with the expectation that the price will recover and they can sell at a profit. This strategy can be risky, as there is no guarantee that the price will recover, and investors may need to weather further price drops before seeing a profit.

Another factor to consider when investing in Bitcoin is the fees associated with buying, selling, and storing the cryptocurrency. These fees can include transaction fees, deposit and withdrawal fees, and fees charged by the platform or exchange where the Bitcoin is purchased. Additionally, taxes on any profits from Bitcoin investments should be considered, as these can vary depending on the jurisdiction.

It's important to note that Bitcoin is a risky investment, and there are no guarantees of making money. Investors should carefully consider their financial goals, risk tolerance, and investment horizon before deciding to invest in Bitcoin. Diversification is also essential, as investing in multiple assets can help reduce the overall risk of an investment portfolio.

Overall, while it is possible to make money by investing in Bitcoin, it requires careful research, strategic decision-making, and an understanding of the risks involved.

Bitcoin's volatility

Bitcoin is a highly volatile asset. Volatility is a measure of how much the price of a financial asset varies over time. The more volatile an asset, the riskier it is to hold. Volatility can lead to substantial gains or losses, as the value of the asset can increase or decrease significantly in a short period.

Bitcoin's price is influenced by speculation and bets from investors, which can cause sudden and extreme increases or decreases in its value. This volatility is further impacted by the relatively small market cap of Bitcoin compared to other asset classes. As a young and nascent asset class, new capital inflows can have a more significant impact on its price.

While Bitcoin's volatility can lead to significant losses, it has also provided investors with substantial gains. For example, if you had invested $1000 in Bitcoin five years ago, it would have grown by 1352% and be worth around $14,524 as of February 2024.

In conclusion, Bitcoin's volatility is an essential factor to consider for investors. It can lead to both substantial gains and losses, and investors must carefully manage their risk exposure when investing in Bitcoin.

How to buy Bitcoin

There are several ways to buy Bitcoin, including:

Cryptocurrency exchanges

You can purchase Bitcoin from cryptocurrency exchanges such as Gemini, Kraken, Coinbase, Crypto.com and Binance. These exchanges offer a range of cryptocurrencies and carry different fees and consumer protections, so it is important to research the options before choosing one.

Traditional stockbrokers

Robinhood was the first mainstream investment broker to offer Bitcoin, and it charges no fees for Bitcoin trades. Other options include Webull, TradeStation and Fidelity.

Peer-to-peer money transfer apps

Cash transfer services like PayPal, Venmo, Cash App and Crypto.com allow users to purchase, store, send and sell Bitcoin directly through the apps.

Bitcoin ATMs

These ATMs allow individuals to insert cash and use it to purchase Bitcoin, which gets transferred to online wallets. Bitcoin ATMs can be found at retail stores such as Walmart.

Bitcoin exchange-traded funds (ETFs)

The Securities and Exchange Commission has recently approved spot Bitcoin ETFs, which are available through traditional brokerage accounts.

Brokerage services

Crypto brokers allow users to simply buy and sell cryptocurrencies. An example is the Crypto.com App, which is available on Apple and Google Play.

Peer-to-peer (P2P) marketplaces

These are platforms where buyers and sellers can directly trade cryptocurrencies without the involvement of a third-party exchange.

• Choose a crypto platform or exchange, such as Crypto.com or Binance.
• Create an account and provide personal information and ID verification.
• Deposit fiat currency or another cryptocurrency into the account.
• Navigate to the 'Buy' section and select the crypto to buy.
• Enter the amount of cryptocurrency to buy and confirm the transaction.
• Transfer the crypto to other crypto wallets or convert it back to fiat currency and pay out to a bank account.

How many people own Bitcoin?

While it is impossible to give an exact figure for how many people own Bitcoin, estimates range from 46 million to 106 million. This is because Bitcoin is decentralized, meaning it doesn't trade through regulated markets or centralized exchanges.

One method used to estimate the number of Bitcoin owners is to look at the number of Bitcoin wallet addresses with an active balance. According to blockchain analysis platform BitInfoCharts, there are over 67 million wallet addresses with a balance of $1 or more. However, this doesn't account for the fact that one person can have multiple wallet addresses.

Another study by Crypto.com estimated that there were 219 million Bitcoin owners as of late 2022, representing approximately 2.74% of the world's population.

It is worth noting that the distribution of Bitcoin ownership is heavily skewed, with a small number of large holders, often referred to as "whales," holding a significant portion of the total Bitcoin supply. As of March 2023, the top 1% of Bitcoin addresses held over 90% of the total Bitcoin supply.

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