Bitcoin was created in 2009, and it has become quite a hot topic since. The first cryptocurrency to hit the market, it offered a decentralized way of minting currency that didn’t rely on the government or other single entities. Instead, Bitcoin is mined through the blockchain, where miners race to add a block to the blockchain to be rewarded with bitcoins. There are a finite number of bitcoins available to mine, creating scarcity that adds to the potential value of this currency—just as the scarcity of assets like gold increases their value due to their finite quantity.
In 2013, Bitcoin saw an increase in value, peaking at $1,200 after starting at $13.50. Of course, this value wasn’t a stable, upward growth; it rose and fell throughout 2013, ending the year at $805, a slight rise from the weeks before. However, it showed a couple of things about Bitcoin (and other cryptocurrencies): it was a volatile investment that was worth paying attention to. This rise and fall pattern continued in the following years, seeming like the currency would bottom out at some point.
In January 2024, another milestone was reached: Bitcoin could be traded through an ETF, creating a bridge between traditional finance and cryptocurrencies. As 2024 unfolded, Bitcoin reached yet another milestone when it surpassed $100,000. This milestone was linked to the re-election of President Donald Trump and his pro-crypto stance, which led many to believe that cryptocurrencies, in general, were a strong investment.
Now that we’re into 2025, Trump has been sworn into office, and Bitcoin finished 2024 with a 125% rise, many are seriously evaluating Bitcoin and wondering if they missed their opportunity to invest in the cryptocurrency. As with most investment questions, there is no yes or no answer to this question, even from financial experts.
What Do the Experts Say?
Most experts are cautious about suggesting Bitcoin as an investment, not because it’s too late but because of its volatility. If financial planners do suggest it or include it in an investment portfolio, they usually make it no more than 1% to 2% of the portfolio.
This can allow portfolios to benefit should Bitcoin experience another significant rise while also protecting the entire portfolio’s value should Bitcoin bottom out.
These discussions also point to several pros and cons to keep in mind if you’re considering adding Bitcoin to your investment portfolio.
The Pros of Bitcoin Investments
Bitcoin remains a relatively new investment option, and how its value rises and falls differs from stock and bond options, where both can be considered more predictable because we can look at the historical ebbs and flows of the market and make projections. Because it differs from stocks and bonds in this way, Bitcoin can help shape a well-diversified portfolio while yielding high profits in a manner that stocks can’t.
Diversification
Based on our risk tolerance, a diversified portfolio allows us to invest in various options that will allow our funds to grow while minimizing losses. Usually, this is done through stocks and bonds. A portfolio focused on growth would have a higher proportion of stocks and fewer bonds. A conservative portfolio would be the inverse because bonds are more predictable and reliable than stock investments. Bitcoin can further diversify portfolios by providing another type of asset and offering another potential way for your funds to grow.
Potential Profits
Looking at how Bitcoin ended 2024 at a 125% increase clearly demonstrates the potential profits Bitcoin offers. Looking at other stock indexes, such as the S&P 500 or the NASDAQ, the rise is far more modest, with each ending the year with a 23% and a 29% rise, respectively. This means that Bitcoin could lead to major payouts if it continues to perform well.
The Cons of Bitcoin Investments
While Bitcoin still has some potential benefits for investors, it also has significant cons related to its volatility and investment speculation.
Volatility
The massive rise in value Bitcoin is subject to is a double-edged sword. It could mean huge profits, but should its value plummet, it could also mean significant losses. Investing in Bitcoin means accepting a higher level of risk than you’d typically encounter investing, which, for some investors, isn’t worth the gamble.
And if you’re going to gamble with your money, then you might as well try your luck at one of the trusted gambling sites in the US. If you win, it’s a fun bonus, but if you lose, you at least get some fun and entertainment out of the process.
Investment Speculation and Creating a “Bubble”
Because of the enormous rise Bitcoin has seen, there’s a lot of hype surrounding the investment. It makes people want to get in on the excitement so they don’t miss out, but this fear of missing out could mean that they’re not paying attention to all the information they normally would when investing. It may also mean that people hope to invest in Bitcoin to make a quick profit. In investing, this is referred to as “speculation,” and it is a risky strategy.
Speculation can also lead to an economic bubble and the bursting of the bubble, as was seen with the dot-com boom in the 1990s and the housing market in 2008. Before getting wrapped up in the hype and potential, it’s important to remember that while a hot topic may perform well in the present, this may not always be the case.
So, Is It Too Late to Invest in Bitcoin?
At the end of the day, investing in Bitcoin has less to do with whether or not it’s too late but more to do with your comfort with risk and your existing portfolio. If you’re seriously considering a Bitcoin investment, keep in mind what financial experts have reported on the matter, and consider sitting down with a financial planner or advisor who can walk you through what a Bitcoin investment could look like for you.