If You Invested $1,000 In Bitcoin One Year Ago, Here's How Much You'd Have Now

Investors who have owned stocks in the past year have generally experienced some big gains. But there is no question some big-name cryptocurrencies have left the stock market in the dust.

Bitcoin’s Big Run: One cryptocurrency that has been a great investment in the past year has been the world’s most valuable crypto, Bitcoin (CRYPTO: $BTC).

Bitcoin has been an exceptional investment going all the way back to the first commercial Bitcoin transaction in 2010 when programmer Laszlo Hanyecz famously bought two pizzas for 10,000 Bitcoin.

See also: How to Buy Bitcoin (BTC)

After spiking to as high as $19,870 in December 2017, Bitcoin prices spent much of 2018 and 2019 trading back under the $10,000 level.

The biggest catalyst for Bitcoin prices in 2020 was massive government stimulus spending to support the economy during the COVID-19 pandemic. Since the pandemic began, the government has spent more than $6 trillion, and investors concerned about the potential for hyperinflation have poured into cryptocurrencies as potential hedges.

At the beginning of 2020, Bitcoin was trading around $7,196. By the beginning of March, the cryptocurrency had risen to $8,543 as news of the virus spreading in China prompted concerns about a U.S. pandemic. On March 23, Bitcoin plummeted to its pandemic low of $3,869.50 as global stock markets tanked.

The good news for Bitcoin investors is that the crypto bounced off that level as the stock market began to stabilize shortly thereafter and the government started printing money.

By late December, Bitcoin hit new all-time highs above $20,000.

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Bitcoin In 2021, Beyond: Fortunately for bitcoin investors the new all-time high was just the beginning.

On Jan. 19, 2021, influential Tesla Inc TSLA CEO Elon Musk added #Bitcoin to his Twitter bio and tweeted “In retrospect, it was inevitable.” On Feb. 8, Tesla announced it had purchased $1.5 billion in Bitcoin and would begin accepting it as payment for Tesla vehicles.

The Tesla news sent the cryptocurrency skyrocketing to as high as $64,778 on April 14.

Bitcoin prices have pulled back significantly since that peak after Musk reversed course in May and said Tesla would no longer be accepting payment in Bitcoin due to the negative environmental impact of Bitcoin mining. Today, Bitcoin is trading back down at $38,951.

Still, Bitcoin investors who bought one year ago and held on have generated huge returns on their investments. In fact, $1,000 in Bitcoin bought on May 27, 2020, would be worth about $4,281 today.

Looking ahead, it’s impossible to value cryptocurrencies such as Bitcoin because they produce no cash flow, pay no dividend or interest and are still used for only a tiny fraction of global financial transactions.

Up to this point, Bitcoin has made for a spectacular speculative inflation hedge investment. But until the extreme volatility in the Bitcoin market dies down, it will likely have a difficult time winning over investors looking for a safe, secure alternative to cash that won’t keep them up at night.

(Photo by André François McKenzie on Unsplash)