If i invest $10 000 in bitcoin today how much is it worth
For much of the last 10 years, Bitcoin (CRYPTO: BTC) has been driving the conversation when it comes to alternative investments. It’s not hard to understand why. Bitcoin is a perfect storm in terms of its ability to generate press and spur casual and seasoned investors to make huge bets on it. Many investors hailed Bitcoin as the currency of the future and cleared their portfolios to put everything in Bitcoin.
They looked like geniuses when Bitcoin hit an all-time high of almost $68,000 in November 2021. Unfortunately, anyone who didn’t get off the Bitcoin train in November learned the hard way that Bitcoin is as volatile as it is lucrative. Bitcoin went into freefall this year and has struggled to recover. All of this begs the question, would you have been better off putting $10,000 in real estate or Bitcoin a year ago?
Bitcoin from Jan. 2, 2021 to July 21, 2022
To assess whether $10,000 in Bitcoin or a $10,000 real estate investment was a better idea, let’s make an apples-to-apples comparison. According to Benzinga, one single Bitcoin was trading at $29,405 on Jan. 2, 2021. That means a $10,000 investment would have bought you 0.34 worth of Bitcoin, or slightly less than a third of a coin.
Bitcoin posted strong gains for almost all of 2021. In fact, it shattered its own all-time high on a number of occasions during the year. The peak was a November 2021 valuation of $67,553.95. Needless to say, Bitcoin investors were dancing in the streets. Many of them used their profits to reinvest in Bitcoin.
In their defense, reinvesting in a high-performing offering is not the least bit controversial. Many investors adopt this strategy, both for traditional and alternative investments. But, as the old saying goes, “What goes up, must come down.” Not long after Bitcoin hit its peak, the first glimpses of inflation began dragging the economy down and then the Federal Reserve started hinting at interest rate increases.
That’s when the bottom began to fall out. Bitcoin has basically been stagnant ever since, dropping below $20,000 before making a slight rally to get back to its current value of $21,536. That means the $10,000 (or 0.29405) worth of Bitcoin you bought last January is now worth about $6,332. In other words, you’d be down roughly 37% on your original investment.
A $10,000 Real Estate Investment from Last January 2021 to Now
Let’s imagine for a moment you were a less-adventurous alternative investor who wanted to put your money in something besides the stock market with $10,000 in January 2021. So, instead of Bitcoin, you decided to put your $10,000 into the Flagship Real Estate Fund.
The Flagship Real Estate Fund works just like a normal investment and since it’s not a cryptocurrency, you don’t convert your investment capital into any other monetary unit. The fund itself is a non-traded real estate investment trust (REIT) that has a stated goal of providing passive income for investors while also giving them the chance to benefit from value appreciation on the assets in the fund.
Flagship consists of a diversified mix of core-plus, fixed income and opportunistic holdings from the following real estate sectors:
According to the fund’s historical performance data, your $10,000 investment from January 2021 would be worth $13,550 at the end of July 2022. In other words, you’d be up over 35% on your original investment. That’s not as high as Bitcoin at its peak but, $13,550 is 66% more than the $8,100 you’d have if you put your $10,000 into Bitcoin instead of the Flagship Fund a year and a half ago.
See also: Fundrise Review
A Case of the Tortoise and the Hare
REITs like the Flagship Fund may not be as alluring as cryptocurrencies like Bitcoin, but a 30% gain beats a 19% loss any day of the week. This example is a classic case of the tortoise vs. the hare. Bitcoin sprinted into the lead while Flagship Fund booked slow and steady returns, but at the end of the race, it was the Flagship Fund that won out. Timing is everything.
If you’d dumped your Bitcoin at its November peak, you would have made over 600% on your original investment. If you waited for another record high, you paid a heavy price. So, if you’ve got some capital to put into an alternative investment, you should know real estate is still a proven winner that is capable of producing impressive returns.
Related News Highlights in Real Estate Investing
The Bezos-backed real estate investment platform Arrived Homes launched a new batch of offerings to allow retail investors to purchase shares of single-family rental homes with a minimum investment of $100. The platform has already funded over 150 properties with a total value of over $50 million.
The CalTier Multi-Family Portfolio Fund recently completed a new investment in a portfolio of four multi-family properties consisting of 185 units. The CalTier Multi-Family Portfolio Fund is one of the few non-traded real estate funds available to non-accredited investors and has a minimum investment of $500. Year to date, the fund has produced an annualized cash-on-cash return of 7.02%.
Find more current offerings and news on Benzinga Alternative Investments
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$10,000 is a sizable amount of money, but to actually get rich from an investment of that size in just one year is nearly impossible. That is unless you invested $10,000 into equal parts of Ethereum (ETH -0.15%) and Solana (SOL -0.69%) at the beginning of 2021.
The returns those tokens have delivered over the past 12 months are jaw-dropping. But zoom out, and the past few years of crypto returns have been arguably more impressive. Here’s a look at just how impactful the crypto surge has been, and what to do from here.
The hockey stick
If you’re familiar with breakout growth stocks, chances are you’ve heard of the “hockey stick chart” — a share price graph that largely resembles a fairly flat line for an extended period before bending sharply into a line that shoots nearly straight up. That’s basically what Solana did earlier this year. It’s up by about 11,800% year-to-date. Ethereum, meanwhile, is up 457.8%.
If you had invested $5,000 in Ethereum at the start of the year, you would have $22,145 — a simply fantastic return. But $5,000 in Solana on Jan. 1 would give you $590,000 today. A $10,000 investment would have made you a millionaire.
Had you split a $10,000 investment 50/50 between Solana and Ethereum at the start of 2021, you would have $610,145 today. However, over the last five years, the gains of Bitcoin (BTC 0.12%) and Ethereum have been even more impressive. Since Dec. 21, 2016, Ethereum is up by 51,680%, and Bitcoin is up by 5,870%. Had you invested $10,000 equally in Bitcoin and Ethereum back then and held on, you would be sitting on a crypto fortune worth $2.88 million today. That’s life-changing money. And the crazy part is Bitcoin was well-known five years ago.
A more mature market
It’s easy to look at charts and shake your head at what could have been. Or kick yourself for not pulling the trigger on those purchases when prices are lower. But the reality is the crypto market is quite different today than it was five years ago. And even Solana and Ethereum have made sizable strides over the last year alone.
In the four-month period between August and November, $9.1 billion of non-fungible token (NFT) transactions passed through the Ethereum blockchain. Ethereum’s market cap is often quoted as a means of value — and yes, its market cap of $465.5 billion is an important stat. But what’s arguably more telling is the amount of money tethered to decentralized finance applications on Ethereum’s network. According to Defi Pulse, that number is just shy of $100 billion. However, the even bigger picture relates to the potential for blockchain technology to disrupt the financial sector, the healthcare sector, and virtually every sector of the economy.
Right now, it’s easy to distance yourself from the world of crypto completely. It doesn’t have to concern you because the projects aren’t affecting everyone’s daily lives yet. But 10 years down the road (or sooner), it’s easy to imagine a world where far more companies and countries carry tokens on their balance sheets, and where smart contracts and user-friendly apps commonly run on the Ethereum or Solana blockchains. It may take time, and there are likely to be ups and downs along the way, but the marketplace could very well be headed along that trajectory.
What to do now
As juicy as this year’s Solana and Ethereum gains were, they are behind us. The question for investors today is whether either crypto is a smart buy now.
Despite its potential, Solana is probably too risky for most investors. It is the fifth-most-valuable crypto by market cap. It’s an amazing solution now, but that doesn’t imply that can hold its leading position forever.
By comparison, Ethereum is the de facto No. 2 token behind Bitcoin. It could eventually pass Bitcoin as more practical applications that are tied to Ethereum’s network grow in value. Ethereum could underperform Solana. But given its track record and dominant position in decentralized finance, Ethereum has arguably the best risk/reward profile of any crypto right now — even better than Bitcoin’s.