Bitcoin (Cryptocurrency: BTC) has seen a 45% decrease in just six months. Such volatility can be quite unsettling, especially for new investors, yet it’s really just a typical moment in the life of this asset.
However, before committing your money to Bitcoin, it’s important to grasp what you’re truly getting into, so let’s examine this a bit more closely.
Will AI create the world’s first millionaire? Our team has looked into a less-known company considered an “essential monopoly” that provides crucial technology used by both Nvidia and Intel. Continued “
Bitcoin is often credited with making many millionaires. Still, there’s no assurance that its price will rise over time, much as we all hope for that.
In 2025, Bitcoin’s annualized volatility was nearly 42%, lower than when it first became part of the conventional financial landscape. Yet, over time, it remains about four times as volatile compared to the stock market. Since 2015, Bitcoin has entered bear markets (defined as a drop of 20% or more without a 20% recovery) around 34 times, while the S&P 500 has faced just two in the same period.
Practically speaking, this means you should be ready for your Bitcoin investment to possibly lose value and stay down for extended periods, sometimes more than a year. For context, Bitcoin fell by 77% in 2022. If such a decline leads you to consider selling, it’s good to review your investment objectives beforehand.
Whether you’re drawn to Bitcoin’s scarcity, its separation from central bank policies, or the increasing acceptance from institutions and governments, each reason unfolds slowly. The narrative around Bitcoin is backed by facts, and no one is suggesting that holding it for a certain time will guarantee quick riches.
With over 95% already mined from the 21 million possible Bitcoin, upcoming halvings—events that significantly affect future prices—often take time to show their impact, sometimes extending across quarters or years.
Similarly, the concept of Bitcoin as a safeguard against currency decline sounds appealing, but keep in mind it hasn’t been around long enough to withstand long-term inflation while successfully preserving its value. Institutional adoption is definitely happening, but it’s still somewhat in the early stages.
In summary, holding Bitcoin for at least five years seems reasonable. If you hold it for less time, you significantly increase the chances of having to sell during a downturn.
You might already know that Bitcoin lacks a CEO, board of directors, or physical headquarters. However, it’s crucial to recognize that the absence of prominent executives doesn’t mean no influential figures exist within its ecosystem.
The Bitcoin protocol is open-source software managed by a small team of around 41 core developers, with five maintainers authorized to approve changes. The software they oversee, called Bitcoin Core, supports about 90% of all full nodes on the network, making their role significant in determining the protocol’s direction.
Choosing which developer recommendations to incorporate into the protocol involves a social process. Those who make the strongest technical arguments generally earn recognition and have a greater influence in discussions.
On the capital side, strategyformer MicroStrategy executive Michael Saylor currently owns about 3.6% of the total Bitcoin supply. That’s quite a concentration. His decisions regarding when to buy or sell have a direct effect on the asset’s price.
This doesn’t necessarily mean Bitcoin is a poor investment. Rather, investing in it exposes you to certain human-driven risks that many investors wrongly assume don’t apply.
Before diving into Bitcoin investments, consider these points:
Our analyst team has outlined what they believe to be the Best 10 stocks available right now. Notably, Bitcoin isn’t one of them. These stocks, however, have potential for notable returns in the coming years.
If you had invested $1,000 in Netflix at the time of its recommendation on December 17, 2004, you would have around $532,066 today! On another note, if you had done the same with Nvidia after its announcement on April 15, 2005, you’d be looking at about $1,087,496!
It’s worth noting that the Stock Advisor has shown a total average return of 926%, significantly outperforming the S&P 500’s 185%. Don’t miss out on our latest Top 10 list. Join an investment community developed by retail investors, for retail investors.
*Stock Advisor will return on April 5, 2026.
Disclosure policy.
3 things new Bitcoin investors need to understand before buying Originally published by The Motley Fool
