Bitcoin is seriously outperforming the S&P 500

Bitcoin is back

It’s happening again. Bitcoin is one of the best-performing assets from the last 12-months.

We’ve been here before though, haven’t we? And many are still feeling burned from last time. Easier to save myself the stress.

At the same time, some say we’re just getting started. We’re a little wiser now, some bad guys went to jail. So maybe this time will be different?

No matter how you felt about it before, FOMO doesn’t discriminate. And you might be right back at square one:

What Bitcoin giveth, it can taketh away.

If the current surge is drawing you in, let’s remind our short memories of what we might be getting into.

Starting with the hype-cycle from 2017, here’s a look at the largest, point-to-point peaks and valleys for Bitcoin since then.

There is no denying it: if you bought in at any of the lows, you would have doubled-tripled-quadrupled (*not real math*) your money.

At this glance, if you believe the same cycles will continue, simply buying-and-holding over the long-term seems like the prudent strategy.

So why not throw a little money in?

But what if it was $1,000,000?

From it’s peak in 2017, to its lowest point only 12 months later, you would have experienced over $800,000 erased from your account.

Fine, just out the storm and it will all be alright. Right?

What if that $1,000,000 was more than just money to you? What if your children’s educations were part of that $1,000,000? Your hopes of quitting that job you were hoping to escape?

I do this for a living and personally can’t imagine the pain of that.

Any genius can read the charts.

But when there is real money at stake, money that had a purpose, investing takes on a whole new meaning. You now have something to lose.

My problem with bitcoin (and all crypto)

I’m not anti-Bitcoin. I love money.

But I don’t think crypto has figured out what it’s wants to be when it grows up.

I said this back in 2020, and still believe it.

The true believers will give you plenty of smart-sounding facts of why crypto will change the world, solve the world’s currency issues, ad nauseum.

But let's not kid ourselves:  if there wasn't a chance to make a bunch of money in quickly, we wouldn’t be talking about it at all.

Fare weather investors have proven they’re only investing to YOLO and make a quick buck.

Signals: The Uber Driver / Dinner Party Test

Take this however you want:  but when I get unsolicited investing advice from my Uber drivers, or any other strangers, I usually run away.

Parties are usually a dead-giveaway too. Me from 2021:

Within 6-mos of this tweet, Bitcoin prices were cut in half.  It took 3 years from that date for its price to break-even. 

You'd have been better off in cash over that time, never losing a wink of sleep.

Should you invest in Bitcoin?

Whether you’re a true believer, or you think it’s all a scam, we'd be silly to not appreciate how bitcoin has (historically had) the power to grow…. fast.

But investing is a double-edged sword. 

When it grows, nothing feels more powerful. When it falls, it drops like a stone and you're stuck until (hopefully) the next rally.

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