Bitcoin has been hitting an All Time High (ATH) recently, and it has been having it's lion's share of the news. But should it have all the news?
Has it been the best performing long term investment?
I have been looking at the historical prices (in April) since 2014 of five Crypto Currencies to find out. These are :
- Bitcoin (BTC)
- Ethereum (ETH)
- Ripple (XRP)
- Dogecoin (DOGE)
- Litecoin (LTC)
Note that Ethereum didn't make an entrance until mid 2015 and I haven't missed out the numbers on my tables below for it.
Price Index
Bitcoin has always cost more per "coin" than most other currencies around. This tends to gets the news headlines moving for those outside of the Crypto sphere.
Compare the cost of a Bitcoin now at $60,000+ to the cost of a Dogecoin now at $0.075. What number makes you look twice?
As you can see from the chart below, Bitcoin certainly hit quite a spike between 2020 and 2021.
Percentage Increase
As a pure investment though we should be looking at how much it has increased as a percentage. We wouldn't hold either 1 BTC or 1 DOGE. It would be 1 BTC vs 800,000 DOGE at today's prices.
As the business saying goes... "Revenue is vanity, profit is sanity". So how much profit has each Crypto currency made over the long term?
You can see that Ethereum, Ripple (XRP), and Dogecoin have all outperformed Bitcoin over the last 7 years.
Verdict
No one is saying that investing in Bitcoin isn't a good idea. But if you had invested $1,000 in XRP seven years ago in 2014 it would now be worth $226,159 (vs Bitcoin at $144,402).
If you had taken a slightly later plunge in 2016 with Ethereum it would now be worth $267,366 (vs Bitcoin bought in 2014 now at $144,402).
But if you had put all your eggs into the Litecoin basket then $1,000 7 years ago would only be worth $23,600 today. Still a good return (2,360% ROI), but not as good as other Crypto returns.
Lesson : Spread your investments. Don't invest in a single Crypto currency in case it underperforms like Litecoin. But then also manage your own expectations and don't expect to bring home the top prize all the time : 90% of the top prize is still a VERY big slice!
The Future?
If I knew what the future holds, I certainly wouldn't be blogging! However, it is fair to say that over time all markets (Crypto, Stocks & Shares, etc) increase in value. But there will be dips - such as the Crypto dip between 2018 and 2020. And certain individual elements will perform better or worse (or even dissappear) than others - so we do need to hedge our bets.
Good luck with your trading and investments, and why not hit that follow button to get more articles in the future!