Posted: 01 Sep 2017 10:19 AM PDT
Bitcoin surged to a new high of $4,880 on Friday.
It must have been cause for cheer among investors who bought bitcoin a year ago.
Back then, the price of bitcoin was a more affordable $572 per token, according to CoinDesk — less than half the price of an ounce of gold. So, had an investor in theory decided to invest about $100 at that point, their stake would be worth about $850 today.
Still, bitcoin has been a highly volatile currency, easily losing, or gaining, $200 over the course of a day. Even now, analysts such as those from investment banking giant Goldman Sachs expect the cryptocurrency to fall some time in the near future before rising once more.
Bitcoin’s sudden rise has drawn comparisons to other investments that shot sky high— only to come plunging down—like tech stocks in the late 1990s and real estate in the early 2000s.
That means while it’s fun to gawk at Bitcoin’s huge gains — much like gawking at PowerBall jackpots — experts say Main Street investors should stay far away.
“It’s really, really not worth it for the ordinary consumer,” Matthew Elbeck, a professor of marketing at Troy University told MONEY earlier this year.
Bitcoin’s advocates, however, say Bitcoin has much further to rise. Charlie Shrem, an entrepreneur and founder of the Bitcoin Foundation, recently said that he believes bitcoin is cheap at any point below $100,000.Correction: The original version of this story misstated the past and present value of Bitcoin. It closed at $572 per token on Sept. 1, 2016, according to CoinDesk, not $474 per token. It reached a record high of $4,880 per token on Sept. 1, 2017, not $4,980. The story also misstated how much a $100 purchase in Bitcoin one year ago would be worth now. It would be worth about $850, not $85,200.
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