CryptocurrencyInvesting

Cryptocurrencies vs. Traditional Investments

By October 24, 2017 No Comments

Top Performing Asset Class

You’ve probably heard of bitcoin, but did you know that cryptocurrencies are by far the best performing asset class over the past 7 years?  If you had invested $1,000 in bitcoin in January, 2015, your investment would be worth more than $25,000 today.  A $1,000 investment just this past January in ethereum, the cryptocurrency that powers blockchain applications, is worth more than $30,000 today - in less than 10 months!

A $1000 investment in ethereum, the cryptocurrency that powers blockchain applications, in January, 2017, was worth more than $30,000 in less than 10 months. chart: coinigy.com

A $1000 investment in ethereum, the cryptocurrency that powers blockchain applications, in January, 2017, was worth more than $30,000 in less than 10 months. chart: coinigy.com

Insane-sounding Investment Returns

What do these insane sounding investment returns mean?  They mean that millions of people are willing to exchange thousands of dollar’s worth of their government issued currency for a math-based global, borderless, digital currency that is quick, cheap, secure, publicly transparent but personally private, self-regulating, and completely free of government red-tape and bank fees.

You've probably heard of bitcoin, but did you know that cryptocurrencies are by far the best performing asset class of the last 7 years? A $1000 investment in bitcoin just 7 years ago is worth more than $30 million today!

You've probably heard of bitcoin, but did you know that cryptocurrencies are by far the best performing asset class of the last 7 years? A $1000 investment in bitcoin just 7 years ago is worth more than $30 million today!

Massive Store of Value

It also means that cryptocurrencies have massive value as investments.  Compare them to some typical investments you might have:

  • Savings accounts are currently yielding less than 1% annually
  • 5 year CDs are slightly better at 2%
  • Real estate averages about a 9-10% annual return
  • dollar
    A good average annual return in the stock market is 10%, 2017 has been a good year with the Nasdaq increasing 21% so far

Here’s a chart comparing the performance of shares of apple stock this year to the s&p 500 and the nasdaq composite index. $1000 invested in each of these on Jan 1st of this year would today be worth $1,340 for Apple, $1,210 for the Nasdaq and $1,130 for the S&P.

Recall that a $1000 investment in the cryptocurrency ethereum this past January would now be worth more than $30,000.

The current value of $1000 invested in Apple stock vs. the Nasdaq vs. the S&P on Jan 1, 2017. chart: Nasdaq

The current value of $1000 invested in Apple stock vs. the Nasdaq vs. the S&P on Jan 1, 2017. chart: Nasdaq.com

The Longer Term

Looking at these investments in the longer term:  If you'd invested $1,000 in gold 7 years ago you’d have $1,023 dollars today, a measly 23 dollar return on your 7-year investment.

$1,000 invested in the s&p index 7 years ago would today be worth about $2,100.

$1000 of apple stock bought 7 years ago would be worth about $4,400 today.  While that sounds like a pretty impressive return for a stock, recall that ethereum has had a 2900% return in less than 12 months!

Comparative returns over the past 7 years for Apple stock and the S&P 500. chart: Nasdaq.com

Comparative returns over the past 7 years for Apple stock and the S&P 500. chart: Nasdaq.com

$30 Million? Seriously?

1000 dollars invested in bitcoin 7 years ago would be worth more than 30 million dollars today!

A $1,000 investment in bitcoin 7 years ago is worth more than $30 million today. chart:coinigy.com

A $1,000 investment in bitcoin 7 years ago is worth more than $30 million today. chart:coinigy.com

The Perfect Time

Now is the perfect time to get into the cryptocurrency market, while it’s outperforming every other asset class.

Bitcoin is trading at just under $6000, with a market capitalization that has just exceeded $100 billion, more than the market cap of Goldman Sachs, the 150 year old legacy investment bank.

Cryptocurrency trading volume will soon surpass that of apple, the world’s most liquid stock.

When smart investors began to realize that bitcoin was completely disconnected from the global financial system and thus not subject to the political and economic whims of central banks and governments, they began treating is as the new "digital gold".

When smart investors began to realize that bitcoin was completely disconnected from the global financial system and thus not subject to the political and economic whims of central banks and governments, they began treating is as the new "digital gold".

Digital Gold

Investors are flocking to bitcoin as the new digital gold in times of economic uncertainty and if bitcoin were to reach just 5% of the market capitalization of gold, it would be priced at more than $25,000, nearly 5 times its value today.

What do these insane sounding investment returns mean?  They mean that millions of people are willing to exchange thousands of dollar’s worth of their government issued currency for a math-based global, borderless, digital currency that is quick, cheap, secure, publicly transparent but personally private, self-regulating, and completely free of government red-tape and bank fees.

What do these insane sounding investment returns mean? They mean that millions of people are willing to exchange thousands of dollar’s worth of their government issued currency for a math-based global, borderless, digital currency that is quick, cheap, secure, publicly transparent but personally private, self-regulating, and completely free of government red-tape and bank fees.

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