Bitcoin is flying high again, with the price of a token topping $52,000 Wednesday — the first time that’s happened since November 2021.
That’s a remarkable recovery for the ever-volatile cryptocurrency, which was trading at less than a third of its current value in November 2022.
Back then, the currency had lost more than 75% of its price following the collapse of FTX, the largest cryptocurrency exchange at the time. The price has recovered since, although it’s still short of its November 2021 peak of nearly $69,000.
The recent rise in price is largely related to the Jan. 11 launch of spot bitcoin exchange-traded funds, which allow everyday investors to buy a stake in bitcoin on regulated stock exchanges rather than cryptocurrency exchanges.
The Securities and Exchange Commission’s approval makes it easier to invest in bitcoin, while also lending legitimacy to an industry plagued by scandal. Bitcoin’s approval has seemingly attracted renewed investor interest, as the value of all bitcoin in circulation exceeded $1 trillion for the first time since 2021 on Wednesday.
How much $1,000 invested in bitcoin is worth, based on purchase date
If you had invested $1,000 in bitcoin one, five or 10 years ago, here’s how much your money would be worth now. CNBC’s calculations are based on the token’s price of $51,793 as Feb. 14.
If you had put $1,000 into bitcoin a year ago, it would have grown by 133% and be worth around $2,331 as of Feb. 14.
If you had invested $1,000 into bitcoin five years ago, the investment would have grown by 1,352% and be worth around $14,524 as of Feb. 14.
If you had bought $1,000 worth of bitcoin 10 years ago, it would have grown by 7,644% and be worth around $77,443 as of Feb. 14.
And if you bought bitcoin on Jan. 11, when the ETFs launched, a $1,000 investment would now be worth $1,113.
Do your research before investing
Because cryptocurrencies are highly speculative, financial experts commonly recommend investing no more than you’re willing to lose. Similarly, past performance isn’t necessarily indicative of future success.
That said, a small amount of crypto can be part of a diversified investing strategy.
“I think it makes sense for most folks to hold a small holding of cryptocurrencies, maybe 1% or 2% of an entire portfolio,” Chris Diodato, a CFP and founder of WELLth Financial Planning, previously told CNBC Make It.
However, “I’m hesitant to recommend more because, in addition to its significant volatility, it doesn’t produce cash flow like traditional investments — it’s only worth as much as someone is willing to pay for it.”
Instead of picking individual stocks or other assets, experts often recommend investing in low-cost index funds or ETFs, which offer automatic diversity. When you invest in the S&P 500, for example, you’re essentially buying part of around 500 of the largest publicly traded companies in the U.S., so your investment’s success isn’t tied to a single company.
As of Feb.14, the S&P 500 is up about 21% compared with 12 months ago, according to CNBC’s calculations. Since 2019, the index has grown by around 82% and since 2014, it has ballooned by around 172%.
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