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Crypto may be feeling a bit down this year, but it has seen quite a rise over the years. Sure, cryptocurrency market volatility can be a wild ride, but for patient investors, it can also be a source of opportunity.

In fact, if you had the foresight to invest Bitcoin: (BTH: 1.73%) back in 2015, you’d be sitting on a pretty impressive pile of cash right now, even if your first bitcoin purchase was small. Let’s take a look at how much you could have made by taking a modest chance on Bitcoin a few years ago.

Why in 2015

Call me nostalgic, but I go back to when I first dipped my toe in the cryptocurrency waters.

I had my first taste of Bitcoin in 2015. on March 4. On that beautiful Tuesday morning, one bitcoin was worth $587. As a fun little experiment, I decided to skip a few premium cappuccinos that week, taking $20 in bitcoin instead. So I signed up Coinbase: (COIN -1.71%) account, completed multiple digital security steps, linked a bank account, and walked away with 0.0335 bitcoins.

Of course, the steady flow of caffeine never stopped or even slowed down. I barely noticed the value of that Bitcoin bite because it was such a small part of my personal budget.

That little piece of digital coin has seen neck-bending volatility for nearly eight years. At Bitcoin’s all-time high of $68,991 per coin, my test investment of $20 was suddenly worth $2,311.

That was about 13 months ago in early November 2021. Inflation-driven market retreat from high-risk investments such as Bitcoin has affected the cryptocurrency since then, amplified by several scandals in the crypto sector. Bitcoin prices have fallen in this volatile market. Today, my old Jackson Bitcoin account is hovering around $560 in total value.

What does a small investment matter?

Back in 2015, I didn’t really understand how Bitcoin worked or what it could do. The game-changing promise of a globally super-secure, digital transaction ledger lost me. Finer points such as Bitcoin’s severely limited supply, low transaction costs, and independence from global and national money management regimes also crossed my mind.

Everything seems natural and reasonable to me now. In 2015, everything was different.

Let’s be clear. In 2015, I wasn’t really investing in Bitcoin. I have yet to gather any evidence that this nascent digital asset class will have any staying power, or that Bitcoin should continue to lead the sector for years to come.

So I saw it as a bet on a new idea that got some people very excited and others dismissed it as just another tulip craze, which is why I only put a small amount of money into this project in the early days. Losing it all wouldn’t be a personal tragedy, just a minor inconvenience. Bigger bets came later, but only after I had a good grasp of the bigger picture of cryptocurrency.

The unexpected success of my Bitcoin experiment

Later, I would like to invest more money in the first purchase of bitcoin. A larger purchase would certainly make a more substantial difference. Bitcoin prices have increased 28 times during this sample period, which is a compound annual growth rate (CAGR) of 53.3%.

A fairly modest purchase of $100 back then would be worth $2,800 today, and that’s after the price of Bitcoin has plummeted over the past 13 months. A more enterprising $1,000 investment would have raised $28,000 by now, enough to buy a new mid-range car.

Investing in new and unproven ideas can be a way to generate high returns. However, it is important to understand that it also involves a higher level of risk. This means that there is a chance that you could lose some or all of your investment.

However, let’s say you believe in the potential of a risky idea like Bitcoin in 2015 or 2022 and have done your due diligence by researching and evaluating it. In that case, a small investment may still be worth considering. This is because a small investment can turn into a much bigger one if Bitcoin proves its usefulness in the real world and continues to grow in the long term.

Bitcoin has become a useful part of my portfolio and I expect this asset to add more value in the coming years, but I am not betting the proverbial farm on so-called digital gold. It is important to carefully consider the potential risks and rewards before making any investment decision, and you should diversify your portfolio to reduce risk.

Where does Bitcoin come from? Image source: Getty Images.

Balancing Bitcoin’s Potential Risks and Rewards

Finally, it’s good to make a small bet on Bitcoin or any other cryptocurrency you want to understand better, just to see where it goes over the years. Having just a little skin in the game can motivate you to learn more about what you have. As your knowledge grows and the market develops, you can either cash in your gaming chips and walk away, or turn them into a serious investment later on.

The road to success is often paved with risk. Just make sure you have a good map and a sturdy pair of shoes.


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