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Bitcoin is back.
On Thursday, the cryptocurrency rose to a new high, exceeding the USD 48,000 level, according to CoinDesk.
Although the asset has been very volatile, those who have held it for the long term have made incredible profits.
For example, if you invested in Bitcoin when it was launched in 2009, your return could be in the millions or billions since the asset’s starting value was $ 0.
“It is easily the best performing asset in the last decade,” said Daniel Polotsky, CEO of CoinFlip, one of the largest Bitcoin ATM companies in the US
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If you bought Bitcoin a little later and held the asset through the ups and downs, you would still see remarkable returns on your original investment.
Millions in profits
For example, suppose you came into the game around October 2010 when a bitcoin cost 10 cents. If you had invested $ 100, you could have bought roughly 1,000 bitcoins.
At their all-time high on Thursday, those 1,000 bitcoins would have been worth more than $ 48 million, ignoring the compounding and assuming that you bought and held the asset all along.
Of course, that’s a long time to hold a very volatile asset, which means the group of people who both invested in Bitcoin so early and largely kept their investments is small, Polotsky said.
And while there are many stories of extreme profits from those invested in cryptocurrency, there are also many who have lost just as much money by buying and selling the chopped off asset at the wrong time.
In addition, investors who have held onto Bitcoin for so long have struggled to actually cash out their incredible winnings due to technical issues. Some have forgotten the passwords for their digital wallets, which means they have few attempts to access the funds before they are locked out forever.
Still, Bitcoin has found itself on an incredible path that has surpassed other investments. In 2021 alone, cryptocurrency is up more than 63% after quadrupling in value in 2020.
What is driving these returns?
More recently, the price of Bitcoin has been driven by high profile support. On Thursday, the Bank of New York Mellon announced that it would provide custody services for digital assets, citing growing customer demand.
At the beginning of the week, Mastercard also announced that it would offer support for cryptocurrencies in its network starting this year. And on Monday, Tesla announced that it had bought $ 1.5 billion worth of Bitcoin and would soon accept the currency as a means of payment.
And although the cryptocurrency has also shown its brand volatility in the past few weeks, long-time Bitcoin bulls are generating even more returns in the future.
Mike Novogratz, Galaxy Digital CEO and a well-known cryptocurrency bull, said in November that Bitcoin would soar to $ 55,000 or $ 60,000 in late 2021 as it continues to replace gold. Tyler Winklevoss, another bitcoin bull and co-founder of crypto-exchange Gemini, said he could see the asset hit $ 500,000 per coin one day.
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Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.