Bitcoin has been making waves in the alternative investment market recently. The crypto hit its highest valuation yet earlier this month when it reached over US$40,000. It has come down a long way from there, worrying investors that they might see a deep slide reminiscent of 2017. It might be too soon to say whether it will come to pass or not.
Since it’s a highly speculative market with no tangible assets backing it up, any news about Bitcoin itself, institutional investors entering the market, or even other cryptocurrencies (which inevitably cast a positive or negative light on the whole crypto market) can sway the market either way. That said, the time is still ripe for realizing your gains from Bitcoin, especially if you’d bought it a year ago.
If you had invested $15,000 in Bitcoin a year ago, when it was trading around $11,000 apiece, its current worth would be over $56,000. That’s about 281% growth in just one year. If Bitcoin’s value is going down a long way, the ideal time to have sold this asset was when it was trading at its highest valuation in the second week of January.
Still, investors who believe that it might not recover or grow again anytime soon in the future can still claim a significant profit by selling now. The news about another crash is piling up, and chances are it will start a snowball effect, and the value will keep going down. And if the history is any indication, it would be at least a year or two before Bitcoin’s value spikes again.
A conventional asset
If you want to stick with one of the most commonly held conventional assets — i.e., stocks — then you may consider BlackBerry (TSX:BB)(NYSE:BB), a stock that’s showing quite a spike, not unlike Bitcoin did earlier this year. While BlackBerry has fallen far from its glory days, the company still has a powerful reputation and a new business direction. The company recently settled a patent dispute with Facebook, after which BlackBerry stock climbed about 20%.
The company also sold about 90 patents to Huawei — mostly security and location-data related patents. BlackBerry itself is now focused on cybersecurity, the Internet of Things (IoT), endpoint security and management, and secure communications, which used to be its forte when BlackBerry phones were all the rage.
The company has a strong balance sheet, and after several consecutive years of revenue drops, the company finally had a relatively profitable year (2020). Between November 2020 and now, the stock has grown almost 200%, and if the current rally continues, it might keep climbing even higher for a while yet.
Even if the Bitcoin cycle repeats itself, it might not be a very reliable long-term asset you can hold on to. Just a few major changes in the crypto market can either shoot Bitcoin’s value through the roof or run it to the ground. In any case, a relatively smarter approach might be to take advantage of its yearly spikes — you might consider buying when it’s leveled to the ground and selling as soon as it starts breaking upward momentum.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Fool contributor Adam Othman has no position in any of the stocks mentioned. David Gardner owns shares of Facebook. Tom Gardner owns shares of Facebook. The Motley Fool owns shares of and recommends Facebook. The Motley Fool recommends BlackBerry and BlackBerry.