Yuriko Nakao | Getty Images News | Getty Images
Bitcoin is busy again. According to data from CoinDesk, the cryptocurrency has risen to a new high, surpassing the $ 48,000 level.
Although the asset was very volatile, those who had it in the long run made incredible profits.
For example, if you invested in bitcoin when it was first launched in 2009, your returns could be infinite because the initial value of the asset was $ 0.
“Theoretically, you could get unlimited bitcoin and then you could have infinite dollars,” said Daniel Polotsky, CEO of CoinFlip, one of the largest bitcoin ATM companies in the US.
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“This is definitely the asset that has performed best over the past decade,” he said.
If you bought bitcoin a little later and kept the asset through the ups and downs, you would still see remarkable returns from your initial investment.
Millions of profits
Say now, you came into the game when a bitcoin was 10 cents, around October 2010. If you had invested $ 100, you could have bought about 1,000 Bitcoin.
At its all-time high on Thursday, the 1000 Bitcoin would have been worth more than $ 48 million, not taking into account the composition and assuming you bought and owned the asset all the time.
To be sure, it is long overdue to own a very volatile asset, meaning the group of people who both invested in bitcoin so early and largely retained their investments is small, Polotsky said.
And while there are many stories of extreme profits from those who have invested in cryptocurrency, there are also many who have lost just as much money by buying and selling the bad asset at the wrong time.
In addition, investors who have been holding bitcoin for so long have had trouble extracting their incredible profits due to technical issues. Some have forgotten the passwords for their digital wallets, which means they only have a few attempts to access the funds before they are locked out forever.
Yet bitcoin was on an incredible track that surpassed other investments. So far in 2021, the crypto-currency has risen more than 63%, after doubling in value in 2020.
What drives the return
Recently, the price of bitcoin has been driven by high-profile support. Bank of New York Mellon said Thursday it would provide digital asset preservation services, citing growing customer demand.
Earlier this week, Mastercard also said it would offer support for cryptocurrencies on its network this year. And Tesla announced on Monday that it had bought $ 1.5 billion in bitcoin and that it would soon accept the currency as payment.
And while the cryptocurrency has also shown its volatility in brands over the past few weeks, long-term bitcoin bulls are seeing even more returns in the future of the asset.
Mike Novogratz, CEO of Galaxy Digital and a well-known cryptocurrency bull, said in November that bitcoin will rise to $ 55,000 or $ 60,000 by the end of 2021 because it continues to replace gold. Tyler Winklevoss, another bitcoin bull and co-founder of the Gemini exchange Gemini, said he could one day reach $ 500,000 per coin in the asset.
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Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.