The 2018 bitcoin return was -73.56% compared to the US Dollar not including any transaction fees. At midnight UTC to open 2018 on January 1, bitcoin traded at $14,156.40 per coin. At midnight UTC to close December 2018 bitcoin traded at $3,742.70 per coin.
Compare the 3/4 loss on bitcoin in 2018 to the whopping 1,318% 2017 bitcoin return.
The 2018 Bitcoin Return: Still Speculation, Not Investment
Last year we mentioned our opinion that bitcoin is a speculation not an investment – and received a surprising amount of pushback. Our opinion remains unchanged: bitcoin is not an investment with good prospects of storing wealth or anything close to set it and forget it.
Keep this point in mind: speculations do not need to be avoided completely!
On the left-right scale of safe to speculative asset allocation, speculations are even more volatile and uncertain than most of what we consider “investments”. You have an array of options in everything from über-safe short-term government securities to mega speculative cryptocurrencies such as bitcoin.
The bottom line: if you are so inclined, speculate in bitcoin only with money you can afford to lose.
If you are young, have time and health to recover from a decline, and have the constitution to handle massive shocks to bitcoin value? Have at it.
We’re not particularly bullish on bitcoin, but there is a non-zero chance that it still can offer life-changing gains in wealth. (Case in point: from Jan 1, 2016 you’re looking at a crazy high +274.9% gain).
Source on the 2018 Bitcoin Return Calculations
We used historical bitcoin price data from CoinMarketCap to compute the returns and create the graph for this article for 2017 and 2018 bitcoin returns.
- Bitcoin Return Calculator
A bitcoin return calculator between dates which includes inflation adjustment.
The 2018 Bitcoin Return
If you enjoy volatility and can lose money allocated to bitcoin? Have some fun and go wild! You’re the only one to blame if eventually you end up with $0.00… but it’s at least possible you multiply the value man-fold.
That also applies to stocks and other assets traditionally assumed to be investments instead of speculations, by the way. Nothing is without risk; even safe government securities often lose money to the steady rise of inflation.
Where do you see bitcoin going in 2019? Do you consider bitcoin speculation as well, or something else?