Bitcoin is the original cryptocurrency and remains the most popular cryptocurrency on the market, with a market capitalization of over $1.1 trillion. Like other cryptocurrencies, Bitcoin is vulnerable to extreme volatility and sudden price swings. Today at 9am Eastern Time, the price of Bitcoin (1 BTC) is $64,041.89, a -2.5% difference from yesterday.
| Bitcoin Price | Percentage change | |
|---|---|---|
| Bitcoin Price Yesterday | $65,643.11 | -2.5% |
| Bitcoin price 1 month ago | $59,214.59 | +7.54% |
| Bitcoin price 1 year ago | $27,976.80 | +56.31% |
| Bitcoin Price Yesterday | |
|---|---|
| $65,643.11 | |
| -2.5% | |
| Bitcoin price 1 month ago | |
| $59,214.59 | |
| +7.54% | |
| Bitcoin price 1 year ago | |
| $27,976.80 | |
| +56.31% |
Bitcoin has evolved from its initial vision as a payments technology to now being considered an investment asset – something to save in a Bitcoin IRA, for example.
Its decentralized and digital nature makes it attractive to some investors wishing to add alternative assets to their portfolios. Many find cryptocurrency attractive as a hedge against inflation or a great way to diversify. Bitcoin has seen astronomical growth and has outpaced recent gains on major stock indices, making it an attractive alternative.
Historical Bitcoin Price
Compared to blue chip stocks like Pfizer, Nike or Nestlé, Bitcoin is quite young. It was launched in 2009 and its price has skyrocketed.
In 2010, Laszlo Hanyecz, a software developer and one of the early believers in the value of Bitcoin, paid 10,000 Bitcoins for a pizza. Today, these coins would be worth more than $580 million.
Since then, the price of Bitcoin has continued to rise. At the start of 2024, its price was $44,187. In March 2024, its price reached its highest level ever, surpassing $73,079.
“The potential benefits of investing in crypto are potentially higher returns than a more traditional stock and bond portfolio can produce on their own,” said Drew Feutz, certified financial planner (CFP) at Migration Wealth Management.
However, Bitcoin often experiences price fluctuations and drops. By September 2024, its price had fallen to around $58,000.
What factors influence the price of Bitcoin?
The value of Bitcoin fluctuates due to a variety of factors, separate from those that affect traditional stocks. Here’s a look at some key influences:
- Adoption of Bitcoin by large companies: When large companies announce that they will accept Bitcoin as payment, its price often increases. For example, the value of Bitcoin jumped following announcements from companies like Tesla, Ferrari and Dell.
- Economic climate: Although Bitcoin is not as sensitive to inflation or changes in interest rates as stocks, it tends to thrive in a robust economy. When people feel financially secure, they are more likely to explore alternative investments like cryptocurrencies. Conversely, during economic downturns, the appetite for risk decreases, which could lead to a reduction in Bitcoin investments.
- Regulatory developments: The cryptocurrency landscape is still relatively new and regulations are catching up. As governments introduce new laws and guidelines, investor sentiment towards Bitcoin may change, sometimes causing distrust among potential investors.
These and other factors collectively contribute to the price volatility of Bitcoin and other cryptocurrencies.
How to invest in Bitcoin
Investing in Bitcoin can take different forms.
Buy Bitcoin Directly Through a Cryptocurrency Exchange
Buying Bitcoin directly is one of the most popular ways to invest in cryptocurrency. You can buy Bitcoin by opening an account with a cryptocurrency exchange. You can sync the account with your bank account and use your money to buy Bitcoin.
Invest in a Bitcoin IRA
Another way to invest in Bitcoin is to open a Bitcoin IRA. A Bitcoin IRA is a tax-advantaged retirement account that allows you to invest in Bitcoin and other cryptocurrencies. Bitcoin IRAs enjoy the same tax benefits and contribution limits as traditional or Roth IRAs, but you can invest in alternative assets.
Consider Cryptocurrency ETFs
A relatively new way to invest in Bitcoin is through a crypto exchange-traded fund (ETF). With these ETFs, you do not directly own Bitcoin, but the performance of the ETF will reflect the performance of Bitcoin.
Crypto ETFs allow you to buy and sell stocks through an investment brokerage account, without having to worry about storing cryptocurrencies or opening a separate cryptocurrency exchange account.
Invest in stocks related to cryptocurrencies
For those hesitant to invest directly in Bitcoin, another option is to invest in cryptocurrency-focused stocks. Potential options include publicly traded cryptocurrency exchanges, technology companies and payment processors; these companies may use Bitcoin or use it in their operations, so you will indirectly benefit from Bitcoin’s performance.
Is now a good time to invest in Bitcoin?
Bitcoin is still a relatively new asset, but it has shown impressive past performance and more and more businesses are using or accepting it as a form of payment. As Bitcoin becomes more established, its price may also experience fewer fluctuations.
“Bitcoin price volatility has been steadily decreasing over the years,” said Brady Swenson, co-founder and head of product marketing at Swan Bitcoin. “As a much more liquid asset, its price volatility is lower than that of relatively illiquid cryptocurrencies.”
If you plan to keep your investment for the long term, investing money in Bitcoin could be a good choice.
“It’s still a good time to invest in Bitcoin with a long-term horizon, (like) 10 years or more,” Swenson said. “Cryptoes are for gaming, not investing.”
Current cryptocurrency prices
Although Bitcoin is the most well-known cryptocurrency, it is not the only investment option you have. When deciding where to invest your money, consider these alternatives:
| Cryptocurrency | Price per piece |
|---|---|
| Bitcoin | $64,041.89 |
| Ethereum | $2,633.43 |
| Tether (USDT) | $1.00 |
| Binance Coin (BNB) | $576.47 |
| Bitcoin | |
|---|---|
| $64,041.89 | |
| Ethereum | |
| $2,633.43 | |
| Tether (USDT) | |
| $1.00 | |
| Binance Coin (BNB) | |
| $576.47 |
- Ethereum: After Bitcoin, Ethereum is the second largest cryptocurrency. Unlike Bitcoin, Ethereum was not created to serve primarily as currency. Instead, it was designed as a decentralized computing platform and is a popular tool among developers.
- Attached: Tether is a stablecoin, which means its value is tied to another asset. In the case of Tether, its value is linked to the US dollar. As a result, Tether tends to be less volatile than Bitcoin, but this also means it lacks the growth of Bitcoin.
- Binance Coin: Binance Coin is a cryptocurrency that you can use on the Binance exchange – the largest cryptocurrency exchange based on trading volume. It can be used to purchase other forms of cryptocurrency, pay Binance fees, or for payment processing.
Takeaways
Despite some sharp declines, Bitcoin’s performance has been impressive. Over the past 15 years, the price of Bitcoin has skyrocketed, and as businesses adapt to the technology and it becomes a more commonly accepted form of payment, there is potential to even greater growth.
However, cryptocurrencies like Bitcoin can be volatile and risky. Since Bitcoin is so new, it is difficult to gauge its actual long-term performance. Only invest what you don’t need in the short term and diversify your portfolio so that the performance of your other investments can reduce the impact of Bitcoin price fluctuations.
“(I suggest) keeping their crypto position at 5% or less of their overall portfolio,” Feutz said.
Frequently asked questions
How can I use my Bitcoin money?
You can use your Bitcoin holdings in several ways:
- Sell it for cash: If you sell your Bitcoin holdings, you can get money that you can transfer to your bank account (or invest in other assets).
- Exchange it for other coins or tokens: If you hold Bitcoin, you can exchange your Bitcoin for other forms of cryptocurrency, such as Ethereum or Dogecoin.
- Pay for your purchases: Some companies allow you to use Bitcoin as a payment method. You can use your credits to book hotel stays, buy a new computer, or pay a restaurant bill.
Is Bitcoin outperforming the stock market?
Although Bitcoin is relatively young, its performance over the past 15 years has been impressive. Over the past five years, its price has increased by more than 450%. To put this performance in perspective, consider that the S&P 500 – a stock index that tracks the performance of 500 of America’s largest companies – is up about 85% during the same period.
How to start investing in Bitcoin as a beginner?
To start investing in Bitcoin (or any other cryptocurrency), you will need to open an account with a cryptocurrency exchange. Once the account is created, you can transfer money to your crypto account from your bank. Once the money is transferred, you can place an order for Bitcoin and other tokens or coins.
