A few days back, the world’s largest cryptocurrency, Bitcoin, touched a new all-time high of $111,000. This is after the recent tariff-induced selloff. As always happens near the new all-time highs, people on both sides of the Bitcoin debate get revitalised.
But in spite of all the negative narratives since its inception in 2009, the fact is that Bitcoin is still here. Of course, there have been massive corrections and gut-wrenching volatility in between. But it is still here. So, credit where it is due. 16 years and still existing. So, something is definitely working for this cryptocurrency, which the majority of us don’t understand much about.
The 2024 approval by the SEC to allow the launch of Bitcoin ETFs, in my view, was a major step in Bitcoin’s evolutionary journey. It helped expand access to this cryptocurrency since both institutional and retail investors could now gain exposure to Bitcoin without a wallet to directly hold it. The spot Bitcoin ETF gave an easy and regulated alternative to add Bitcoin exposure to long-term investors’ portfolios. Post that, there is an increased interest among traditional financial firms too.
If you look at the journey since 2009, there has been a growing acceptance of Bitcoin (BTC). First, only nerds were interested (like a Bitcoin Crorepati friend of mine). Then a few others joined in. Then gradually, some leading people in the tech space got interested, like Michael Saylor, Jack Dorsey, etc. Then came the institutional investors. Then came the ETF approval, which opened the floodgates for retail to join in. Even a few countries have joined the BTC highway.
So, if you look at it objectively, then from a proof of concept of a digital experiment (by an anonymous Satoshi Nakamoto) where a programmer spent 10,000 Bitcoins to buy two Papa John’s pizzas, Bitcoin has now grown to a marketcap of $2 trillion! Quite a journey, even if we still don’t understand it. And by the way, if you didn’t realise, the value of those 10,000 Bitcoins (which were then worth about $40 in total) is now above $1 billion!
Now I am sure you too are intrigued by the crypto’s journey. You may love it or hate it, but you can’t ignore it.
The question you may have now is where Bitcoin will be in future? In 10 years or 20 years.
If you are a sceptic (like most people still are), then the worst-case scenario is that it will go down to zero. You can’t rule this out, but the chances of this happening seem extremely low given the current 16-year trajectory of Bitcoin.
If you are a Bitcoin Bull, then there have been many eye-popping Bitcoin price predictions made. Currently (May 2025), Bitcoin is at about $111,000. One of the popular targets that is provided nowadays is for 2030 by Ark Invest. According to them, there are bear, base, and bull cases of about $300,000, $710,000, and $1.5 million per bitcoin in about 5 years’ time.
While these predictions seem to be painting a rosy picture, let’s remember, these are predictions and sentiments. Not the facts.
So, no one knows for sure. And wherever Bitcoin goes in the next 5, 10 and 20 years, one thing is sure. Like in past, it will experience a lot of volatility (remember that it has seen several 60-80% crashes).
I personally think that cryptos still are not for everyone. But it is still okay to be considered by a select few who have a suitable risk profile and can withstand gut-wrenching volatility.
So, if you belong to that small percentage of the population, then you can think about it. And then, too, that in spite of the high-return life-changing potential of Bitcoin, 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.
Now, if you still feel like investing in Bitcoin (or already are), then the next important question for you is: How much of your long-term portfolio should you invest in Bitcoin?
This is, of course, assuming that it is legal to invest in cryptocurrencies as per your country/geography’s law.
These days, advanced investors are looking at privacy coins (a type of cryptocurrencies which enhance user anonymity and offer compliance with confidentiality). There are platforms like Bitcoin Bank that are increasingly building enabling infrastructure and allowing users to compare them to mainstream digital assets.
Coming back to traditional cryptocurrency of Bitcoin, and assuming that you plan to hold it for the long term, then it’s best to start small. Very small. Like less than 1% of the overall portfolio. Don’t get caught in the Bitcoin-mania and bet big on day one. Gradually keep increasing it till it reaches 1%. And then see if you have the appetite for more. If yes, then you can keep increasing the allocation to 3-5%.
By the way, there is a Yale University study that says that every portfolio should have up to 6% Bitcoin. You can read about it in this short Q&A here. But here is a summary: If you, as an investor, believe that Bitcoin will perform as well as it has historically, then you should hold 6% of your portfolio in Bitcoin. If you believe that it will do half as well, you should hold 4%. In all other circumstances, if you think it will do much worse, then you should still hold 1%. Of course, one has to remember that, as with any other asset, past performance is not a guarantee of future returns.
Generally speaking, I think that anything more than 5% is best reserved for true experts who know what they are doing. So don’t get too excited and fall prey to FOMO due to Bitcoin making new life-highs. Also, I feel that sticking with established crypto like Bitcoin (and say a little in Ethereum) is much better than chasing the latest altcoins in the news.
As of today, I still feel that almost everyone (except nerds who really know what they are up to) should have 95-99% of their money in traditionally established assets like equity, debt, cash, real estate, and gold.
Important – Nothing of what I wrote above or what is written in the articles linked to should be considered as investment advice. These are just my thoughts about the topic being discussed. Remember that cryptos are extremely risky. Do your own research and then decide accordingly whether to invest or otherwise.