What Should I Invest In?

Published

December 9, 2024

The path to financial independence through cryptocurrency requires careful consideration of historical data, risk tolerance, and investment timeline. While many assets and strategies exist in the cryptocurrency space, this guide will focus on what has proven most reliable for long-term wealth building.

Understanding the Bitcoin Investment Thesis

When examining historical cryptocurrency returns, Bitcoin has demonstrated remarkable consistency over 8-year holding periods:

  • 2013-2021: ~4,000% return
  • 2014-2022: ~2,900% return
  • 2015-2023: ~8,500% return
  • 2016-2024: ~17,500% return

These returns suggest that patient accumulation of Bitcoin over long periods has been the most reliable path to wealth building in cryptocurrency. However, it’s important to understand why simply calculating future value using traditional compound interest formulas doesn’t tell the whole story.

Why Traditional Investment Calculations Fall Short

Traditional future value calculations assume consistent periodic investments of equal purchasing power. With Bitcoin, this assumption doesn’t hold true because:

  1. The dollar amount you invest monthly buys different amounts of Bitcoin as the price changes
  2. Market cycles create varying entry points that significantly impact returns
  3. The deflationary nature of Bitcoin means later purchases may acquire less BTC than earlier ones

Despite these mathematical complexities, the historical data presents a compelling case: consistent Bitcoin accumulation over 8+ year periods has outperformed virtually every other asset class.

The Simple Truth About Crypto Investment

After analyzing countless strategies, tokens, and approaches, we’ve reached a straightforward conclusion: for most people, the optimal cryptocurrency investment strategy is:

  1. Save what you can afford monthly (even if it’s just $10)
  2. Convert it to Bitcoin
  3. Hold for at least 8 years
  4. Repeat

This advice might seem overly simple, but it’s based on several key observations:

  • Bitcoin’s network effect and first-mover advantage continue to strengthen
  • Alternative cryptocurrencies (altcoins) have historically underperformed BTC over long periods
  • Complex trading strategies typically underperform simple accumulation
  • The 8-year holding period has captured full market cycles historically

For Those Seeking More Detail

While we maintain that simple Bitcoin accumulation is optimal for most investors, we understand some readers may want to explore additional options. For those interested in evaluating other cryptocurrencies or investment strategies:

  1. Review our comprehensive ratings system in the Ratings section
  2. Understand the risk factors we’ve identified for different asset types
  3. Study the technical fundamentals behind various protocols
  4. Consider your own risk tolerance and investment timeline

However, we strongly caution that additional complexity rarely leads to better returns for most investors.

A Note on Financial Independence

The goal of this investment approach is to achieve financial independence - having enough passive income to cover living expenses without relying on central authorities. While the exact amount needed varies by location and lifestyle, consistently accumulating Bitcoin has historically provided a path toward this goal.

The beauty of this approach is its accessibility - whether you can save $10 or $10,000 monthly, the strategy remains the same: consistent accumulation and patient holding of Bitcoin.

Conclusion

While cryptocurrency offers many investment opportunities, our analysis suggests that simple is better. Regular Bitcoin accumulation over long time periods has proven the most reliable path to wealth building in this space. Rather than seeking complex strategies or alternative assets, focus on:

  1. Establishing a consistent savings habit
  2. Converting savings to Bitcoin regularly
  3. Securing your Bitcoin properly
  4. Maintaining conviction through market cycles

For most people, this straightforward approach will likely outperform more complex strategies while requiring less time, stress, and expertise.