This episode stems from an article I read about six years ago. And in this article, the writer chastised someone for taking out a loan to buy Bitcoin. And I’ve always had a problem with that. That’s always stuck out to me. And obviously it’s an imprudent financial move. to borrow money to buy cryptocurrency.
We all know that, right? What crypto does is it gives people hope. And the way it gives people hope is it has an asymmetry. So when I say asymmetry, it means, I’m referring to the limited downside to buying crypto. We know how much we stand to lose. But the sky high potential, so the sky high upside, and those two don’t match.
The downside is whatever your buy in price is, and the upside is however high it can go. And with crypto, we’ve seen it go higher than any other speculative investment. So what crypto does is it gives some people hope. This is this is what some this is all some people have to bank on and so that’s why I had a problem with the writer.
So with traditional markets, The returns aren’t high. And so in some cases, if you just so happen to bet on the right company, yes, you can get nice returns, but nothing like you can get with crypto. And so when I, when we talk about the stock market, historically, you’re looking at maybe a seven to 10 percent annual return adjusted for inflation.
With bonds, two to 6% gold, five to 7% real estate, three to 5%. And there have been some outliers when it comes to stocks, and so I looked at stocks within a five year timeframe, not, you know, not 25 years, but like five years. What could be some of the, the, the better gains? Tesla had a 300% gain from 2015 to 2020.
Nvidia. 550% gain from 2016 to th 2021 Amazon within a five year frame, 742%. So it went from $300, $380 to $3,200. Zoom went up 8816% from just 2019 to 2020 and Netflix. Went up 1000% from 2015 to 2020. So these have been some really nice returns in the stock market. But those took, you know, those were a five year frame and some of the, the returns that were better than that, there have been some spectacular returns, but you’d have to hold for literally two decades or more, and that’s just not realistic for many people.
So with, with crypto, this is possible. We have limited supplies. We have a less controlled market. We have all sorts of technology that is emerging. So and then there’s also global accessibility. So there’s a lot of potential here, a lot of exciting projects. And that’s what gives crypto this ability to have spectacular returns.
As we’re starting from. Oftentimes these low, low price points, and then it can ascend as more and more people buy into a project. So what are some of the examples of where crypto has, has gone sky high and they’ve hit this unlimited potential? And with Dogecoin. It started out in 2014 at 0. 0002 cents.
And then in 2021 it reached an all time high of 69 cents and the gain was three, 344, 900%.
Now, obviously you’re not going to hold that time, but that kind of potential isn’t available. Anywhere else. Another token is called Ave and it started off as Eland, and it started out at 2 cents, and then it orig, it init, it eventually reached $90 in 2020 for a gain of 449900%, and it went even higher after it reached $90.
There are other examples with the central land. Stellar at one point had a 44, 900 percent gain. ETH started at around one dollar and in 2017 reaching at 1, 400 that was a 139, 900 percent gain. Ripple in a span of two years from 2015 to 2017, has had a 95900% gain around from that same time period.
Litecoin had 11900% gain. These gains are not possible any. Other time in history. This is literally the only time that these types of gains are possible and they happen some degree of regularity with crypto. So how ridiculous is it for someone to take out a loan to buy crypto? It’s not that ridiculous.
I’m not saying it’s likely, I’m not saying it’s responsible. But it gives people hopes. And so from, I did some research and from 2020, if you bought a, a, a set amount in a token and held it for one year this would make you a millionaire. And so let me, let me name off these tokens. If you bought 3, 000, 3, 715 worth of Axie Infinity in 2020, This is December 2020.
By the following year, you would have been a millionaire. 502 in Gala would have, would have netted, would have made you a millionaire. 9, 412 in Solana would have, Solana would have made you a millionaire. And then with Sand and Luna, between 6, 475. 50 would have made you a millionaire. So just to put, just to state that again, if you would have bought 7, 509 of sand, it would have made you a millionaire within one year.
Where else is this possible with crypto? It is happening. As I said, with some degree of leg regularity. Now the flip side is. That you can lose money in crypto, right? We’ve seen huge drops with these gains. We’ve also seen many, many drops. We’ve seen Bitcoin drop, right? Bitcoin going up all the way into the 60, 000 range and then falling back somewhat recently.
into the 15, 000. We’ve seen many tokens lose over 90 percent after their ICO, their initial coin offerings. We’ve seen scams, we’ve seen projects up and go. We’ve seen scams where the price shot up and then immediately went to zero as soon as news came out. We’ve seen The, the verge token peak at 28 cents in 2017, and then dropped below a penny in 2018.
And so we’ve also seen flash crashes due to market conditions or even errors. So this happens all the time. I’m not saying that anybody who jumps into crypto automatically receives a windfall. And it’s not just that, it’s hard to hold this entire time to see these spectacular gains. Let’s say you have a gain of 5, 000%.
How much fortitude do you have to hold? To where it would jump to where it’s 50%, right? Or five, 50, 50, 000%. It’s hard to hold that long, but the point is an asymmetry exists. So it’s not ridiculous for your average person to buy into crypto with the hope that one day it does make them a millionaire. This is a highly speculative investment and it is volatile.
And so we’re all aware of the negative side of volatility. But what that writer forgot in that article is the positive side of volatility in that it does give people that asymmetry that upside that so many people need and so that That’s what I wanted to cover. And, and it’s just an article that has always stuck out with me, but I do think that I don’t think it’s unreasonable at all for people to put money in crypto.
It is gambling. It is speculation because a lot of times we just don’t know. We’ve seen the market experts. Be wrong over and over again. There are so many prognosticators that have said Bitcoin would reach a certain price or ETH would reach a certain price, and it hasn’t happened, right? Nobody’s the expert.
Most people don’t know. It’s hard to know when, it’s impossible to know when to sell, and you’re never going to time the market with crypto, but if you, if you buy into a legitimate project, And it has promise and it has this technology, especially if you buy into multiple projects like that, you do expose yourself to tremendous upside.
And so I think it’s a hundred percent reasonable for someone. Where it’s better than buying any lottery tickets. And it’s better than, than, than the alternatives, right? You’re not going to have enough money to really parlay any investment in the stock market. Let’s say you invest a thousand dollars.
How much can you reasonably expect to get if you wait for five years, right? If you got 5, 000 back in five years, you’d be doing extremely well. With crypto, everything is completely different and you have wild potential. Of course, there’s potential for you to go to absolutely zero, but there’s also potential for you to become a millionaire.