Can I Buy & Hold Bitcoin for 10 Years?

[Update 2022] – In the Budget 2022, it was announced that all cryptocurrency (and digital assets) in India will be taxed at 30%. So the government has made it’s view clear, in a manner of sorts. For more details on the taxation aspect, please read the relevant article here.

10 years is a long time. So does it make sense to Buy & Hold Bitcoin for the next 10 years (from 2022 to 2032)?

Let me try to share my thoughts on this question. Don’t expect it to be an expert opinion or likewise. These are just my thoughts. And in general, I have a strong bias towards investing for the long term.

Whether you buy Bitcoin for the long term (known as HODL) or trade in Bitcoin (for the short term) depends on what potential you see in cryptocurrencies. And remember that there are 10,000+ cryptos out there. Not all of them will exist after 10 years, or for that matter, after a few years as well. Only a few will survive. And as of now, Bitcoin seems the king of the pack.

But irrespective of the price volatility and risks involved, there is a growing acceptance for Bitcoin (BTC). First, only nerds were interested (like a Bitcoin Crorepati friend of mine). Then others joined in. Then gradually, some leading people in the tech space got interested. Then came institutional investors. And now, countries are joining the BTC highway.

So what will happen to Bitcoin price in 10 years?

The worst-case scenario is that it will go down to Zero. But to be honest, given the increasing use-case of the blockchain technology behind it, it seems like a low probability event.

The Bull-case scenario, on the other hand, has many eye-popping Bitcoin price predictions made for the year 2030 and beyond. Currently (Jan 2022), Bitcoin is in the range of $40,000-$45,000. Some of the price predictions for the future are:

  • $100,000 (by 2022)
  • $250,000 (by 2022)
  • $318,000 (by 2022)
  • $500,000 or $0.5 Million per BTC (by 2030) – This is by the Winklevoss Twins, the famous Bitcoin billionaires. If this happens, it would put the Bitcoin market cap on par with that of gold (around $9 trillion). The prediction has been explained in full detail here by Tyler Winklevoss on their website.
  • $1 Million (by 2027)
  • $1 Million per BTC (by 2037) – This is by Chamath Palihapitiya, who also thinks Bitcoin price will reach $100,000 in the next 3-4 years (by 2025)
  • One anonymous analyst PlanB has created a Stock-to-Flow model of Bitcoin that till now has quite accurately predicted Bitcoin price moves. His model at times turns up unbelievably high price predictions. Do search for it and you will know why.

So Bitcoin price predictions can reach very high numbers, ranging from thousand dollars to even over $1 million dollars per BTC! Check out more such interesting Bitcoin price predictions on this site.

And those are some possible answers to questions like What will Bitcoin be worth in 10 years? and Will Bitcoin be around in 10 years?

But whatever your view might be, know that there are some stupid people out there who think (and enter Bitcoin and other cryptocurrencies) thinking that it will never go down. Please don’t be like those idiots. Anything can happen. Anything.

It is, for this reason, it is said all the time that you should never invest more in cryptocurrencies than you can afford to completely lose.

If you look at the history of Bitcoin price action, you will also see that it peppered with big Bitcoin crashes. Several 50-80% falls. And who knows it might be like the dot-com bubble of the early 2000s.

So you need to be careful about how much you invest in these cryptos. I have written about this in post How much of your portfolio to invest in Bitcoin? In the post, I talk about how Bitcoin is not for everyone, but it is also not that it is not for anyone. Gradually building up 1% exposure to cryptocurrencies can be considered once the legal nature of Bitcoin in India is clear. And if you have an amount invested in Bitcoins due to which you lose sleep, then it’s better to sell some and get some peace. Do not drive yourself crazy on this. Be sane.

There are people who are trying to build quant models to predict Bitcoin price in 2022, predict Bitcoin price in 2023, predict Bitcoin price in 2024, predict Bitcoin price in 2025 and predict Bitcoin price in 2030. And some of these models are seemingly quite accurate, atleast as of now. But To be honest, nobody has yet come up with a good model that can properly evaluate cryptocurrency projects in the long run and make reliable predictions. I am still learning so maybe I will find some useful models in the future. Let’s see.

Investing in Bitcoin and other altcoins is trendy these days. But don’t think of Bitcoin as a Get Rich Quick scheme. Though the price moves may make it seem like that. Spend some time to figure out Should you invest in Bitcoin or not? This is very important. And then worry about whether to hold for the long term or short term.

Assuming you are in it for the long term, you may ask…

How do I create a Cryptocurrency Portfolio for a 10-year period?

I think in Bitcoin, investing for the long term is the way to go. As for the Altcoins, it’s better to have a long-term mindset but if the altcoin project doesn’t seem to be picking up, it’s better to exit and get into new altcoin projects. So it’s kind of medium-term trading.

Further Reading – Which Altcoin to invest in other than Bitcoin?

You can have main positions in Bitcoin (BTC) and Ethereum (ETH), but the overall strategy can still include a bit of diversification. This can be done by taking smaller positions in a number of alt-coins to spread out the risk and to give a better chance of riding waves of growth when different alt-coins break out. That way, you get the best of both worlds.

Talking of the importance of being in the top 2 cryptos, do read this detailed comparison between Ethereum Vs Bitcoin. I also wrote about this in detail in How to split Crypto portfolio % between Bitcoin, Ethereum, and Altcoins. If you want to create a cryptocurrency portfolio for 10 years, then here is what I think might be one way to do it: 

  • Put a large percentage of your portfolio (40-70%) in Bitcoin. Plain and simple. It is the most established crypto out there and compared to the rest of the space, much less risky. It’s also the one that decides which the market is headed given its high dominance.
  • The next crypto to consider is Ether (Ethereum ETH). You can put it 30-50% in this coin as well.
  • In fact, the 50% Bitcoin + 50% Ethereum is the simplest diversified cryptocurrency portfolio that you can build. This is a reasonably good choice given that both are among the two largest digital assets by market capitalization and are also the most liquid ones
  • Once these 2-piece of the crypto portfolio jigsaw are set, then you look at Altcoin for 0-30% of your portfolio. The space is not easy to pick from, to be honest, unless you really understand the technical workings of each of the altcoins you plan to pick from 10,000 plus of them. You may think of your altcoin picks as the Next Bitcoin. But there are very small chances of that happening. Nevertheless, spreading it across 5-10 (or max 15) crypto altcoins can be considered. Remember, some of these will go bad. Some will do ok. Some might do very well.

So don’t think about putting Rs 1 lakh in 100 different cryptocurrencies with Rs 1000 each. Instead, put Rs 60-90,000 in Bitcoin + Ethereum and the remaining money in 5-15 other Altcoins. You can even do SIP in Bitcoin if you are uncomfortable investing in one go.

Note: These are just sample portfolio suggestions and a cryptocurrency portfolio example. This is neither intended nor should be taken as investment advice.

To be honest, I don’t know if one should even search for things like Bitcoin Price Prediction 2022, Bitcoin Price Prediction 2023, Bitcoin Price Prediction 2024, Bitcoin Price Prediction 2025, or Bitcoin Price Prediction 2030-31. It is difficult to accurately guess what Bitcoin and other cryptocurrencies will be worth next week, let alone in a few years’ time. So it’s anybody’s guess what will happen to Bitcoin price in the next decade.

Instead of looking for Bitcoin Price Prediction and imagining that the Bitcoin price history will repeat itself and make you a Bitcoin Millionaire, study things in a bit more detail.

Some of you may be caught in Cryptomania. And think that if Bitcoin is to become expensive in the future, should I buy some more today? But do not forget your asset allocation, please. And if you invest in cryptocurrencies and you get super high returns, make sure to atleast secure some of the profits by moving it back to traditional assets.

So should you hold crypto for the long term?

I think you need to be a bit selective about what you hold (or HODL) and what you trade. And remember that inspite of the high-return life-changing potential of Bitcoins, do not bet the house on it. This is an extremely risky space and not for everyone. And there is no shame in accepting that.

If regulatory clarity in India improves about the legality of Bitcoin and you decide to invest in cryptocurrencies, then make sure to start small. Like less than 1% of the overall portfolio and then see if you have the appetite for more. Don’t bet big on day one. For the time being having 95-99% of your assets in assets like equity, debt, cash, real estate, gold* is the way to go. Don’t get too excited with the price moves of cryptos and fall prey to FOMO.

*By the way, Bitcoin is often referred to as the one set to replace gold and being the New Gold 2.0. Do read this post to know about Bitcoin Vs Gold.

That said, will Bitcoin ever reach 100k dollars or will Bitcoin reach 500k or will Bitcoin reach 1 million dollars? Atleast the predictions seem to be sure about it. But remember, these are predictions and sentiments. Not the facts.

So make your own judgment about whether to buy and hold Bitcoin for the next 10 years or not.

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