You’ve heard about it—probably for years now. Bitcoin. You probably have heard that it can hold a high value. Maybe you have even heard the story about a pizza delivery driver who was tipped in about $365 million dollars worth of Bitcoin in today’s value. This was the early days of cryptocurrency, and the payment was worth only about $40 at the time.

Obviously, this isn’t the ROI most people receive on their cryptocurrency investment. Still, it is a reflection of the unique value this currency has. What is Bitcoin, and what role should it play in your life? Let’s get into it.

Bitcoin Overview

Bitcoin is simply a decentralized digital currency. “Decentralized,” in this context means that no bank or national agency controls it. Bitcoin, like other cryptocurrencies, is supported by blockchain technology. Basically, a virtual ledger that securely documents transactions.

You can use Bitcoin online through virtual wallets to send currency and make purchases. For example, you might spend a few hours playing at a Bitcoin casino, or make a private transaction with someone online. Just try not to over-tip them by a margin of $365 million.

The value of Bitcoin fluctuates to reflect demand. It has a limited supply—capped at 21 million. That may sound like a lot, but for a global currency, that is a very sparse figure.

Like any system governed by supply and demand economics, when people want Bitcoin, the value goes up. When demand is tepid, it goes down.

At the time of writing, the value of one bitcoin is hovering at around $96,000. By the time you read this, it will probably be different.

Bitcoin’s all-time high value was $98,453, a number it hit in November of 2024. Despite fluctuations, it has proven to be a consistently stable way to invest in Crypto. To date, Bitcoin assumes 55% of the total value of the cryptocurrency market.

Bitcoin as an Investment

In stock terminology, Bitcoin would be a little like a Bluechip investment. It was the first major crypto. It is well-established. Well known. It has a proven history of increasing in value, and, as mentioned in the last heading, it holds the largest market share of all cryptocurrencies.

It’s the stock market equivalent of investing in Disney or Apple. You can assume, with relative confidence that a Bitcoin purchased today will be worth more than you spent on it ten years from now.

Of course, there is a saying about assumptions that involve language better avoided in polite company. Bitcoin is an investment and all investments carry a degree of risk. It’s important to:

  • Understand your investment. You should know where your money is and what it is doing. Of course, many traditionally invested shareholders fail at this factor routinely. How many people with a stock portfolio could tell you exactly what is in it? Still, responsible investing is all about taking an active role in your money management.
  • Stay within your comfort zone. To buy an entire Bitcoin requires a considerable upfront investment. We will touch more on how much you need to invest shortly. However, the important thing with this and any investment is to make sure you are comfortable with what you spend.

Being a well-informed, comfortable investor makes it easier to stick with the program. Bitcoin, like the stock market, can fluctuate wildly. Someone who knows what they are doing will be comfortable enough to ride out the turbulence.

Bitcoin Versus Stock Investments

You can invest incrementally in Bitcoin, putting in as much or as little as you are comfortable with. Let’s say that you decide to put in $1000—about 1% of an entire Bitcoin. Assuming an annual appreciation rate of 230%–about Bitcoin’s annual average over the last ten years—you’ll wind up with $2300 in your pocket.

If you invested that same amount of money in the stock market it would yield about $70-100 assuming normal market conditions.

So why would anyone invest in anything other than Bitcoin? Cryptocurrency may outperform the stock market in gains, but it is also WAY more volatile. In 2021-2022, Bitcoin prices went way down thanks to increased interest rates and reduced liquidity.

The stock market fluctuated during those years as well, but not as radically.

Volatile markets involve higher rewards, but also greater risks.

Conclusion

Good investing involves a combination of factors. Well-educated choices. Sensible diversification. Time. You don’t want to put all of your eggs in one basket, and you also don’t want to need your investment to pay off at a specific point.

Investing simply isn’t that predictable. Bitcoin has been proven to appreciate, but that appreciation takes time. It’s all about doing well in the long run. Not necessarily tomorrow, but maybe five years from now.

With a good strategy and a lot of patience, you can do very well with Bitcoin.