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If I had a time machine, there a few companies I would go back and by stock in during their infancy; Apple, Microsoft, and Amazon. Something these three companies have in common, besides technology, is the fact that people called their underlying products, services, and functions “fads.” People also thought the internet would come and go. Some of you might not even know what Ethernet is (the traditional technology for connecting devices in a wired local area network (LAN) or wide area network),but 1995 the creator, Robert Metcalfe, famously said "I predict the Internet will soon go spectacularly supernova and in 1996 catastrophically collapse." People believed e-commerce was a joke. Now my wife and I placed our grocery order online and it is delivered to our home. People believe(d) that Bitcoin, aka “internet money” was a fad. I even said this myself a decade ago. Today I personally have more money invested into crypto currency than traditional finance. And here’s the thing- soon Bitcoin will be TradFi (traditional finance).
On January 10, 2024, the Securities and Exchange Commision, a regulatory body of finance in the United States, approved applications for eleven (11) Bitcoin ETFs. ETFs, or exchange traded funds, are an investment vehicle that can be traded multiple times per day, unlike their predecessor, mutual funds, which are traded once per day. This means that traditional investors now have an outlet for investing in bitcoin without buying the asset directly from a crypto exchange like Coinbase or Robhinhood. Of the 11 firms launching an ETF, the one with the most impact is BlackRock. BlackRock manages over $9 trillion in assets. For reference, that is almost half as much as the US GDP, and almost 9 times the amount of US student loan debt. One of the largest asset managers in the world is now in the game.
Here’s why this matters to you if you’re under 25- This is your Apple. This is your Amazon. This is your once in a lifetime opportunity to, with your own research and own decisions, look at this opportunity to purchase an asset class that could change the course of your life. Again, this article is not financial advice, and I am not encouraging you to invest in these ETFs. I am however encouraging you to research Bitcoin and the other top 25 cryptocurrencies because there is an opportunity to build wealth that your generation may never have again. The disparity between the rich and the poor of the world is only getting wider. If you were to purchase my same home today that I bought only 5 years ago, it would cost you $110,000 more. I can assure you, we didn’t put $100k of more value into the home. The market has just inflated that much. While the average starting salary of a college graduate certainly hasn’t inflated at the same rate. Bitcoin went from a price of pennies to almost $70,000 when only the passionate who could figure out how to acquire the cryptocurrency were buying in 15 years. Imagine where it will be 15 years from now, when you’re in your forties.
Let’s run through an example: How much would $1,000 invested in Apple in 2008 (my first year of highschool) be worth today?
In January 2008, Apple's stock price was approximately $11.50 per share. $1,000 / $11.50 ≈ 86.96 shares (rounded to the nearest whole share).
Now, we need to consider any stock splits that occurred. Apple has had several stock splits, including a 7-for-1 split in 2014. To account for this, we need to adjust the number of shares:
86.96 shares * 7 = 608.72 shares (rounded to the nearest whole share).
Apple’s stock price as of writing this article is $183 per share.
608.72 shares * $183 ≈ $111,395.76.
If you do not have access to these Bitcoin ETFs through your 401k plan, consider researching a brokerage account. Review your finances, and see what you can afford to set aside for your future. Don’t be afraid to do your own research. Check out these sites for more information: