Investors who have never participated in Bitcoin have probably heard about the incredible profits of this cryptocurrency. Although there is still no official conclusion as to whether Bitcoin - and cryptocurrencies in general - are long-term assets, the strong price increase that Bitcoin has achieved is undeniable.

By August 12, 2025, the price of Bitcoin is at $119,681.14, according to CoinMarketCap. This figure compares to just $7,200 on January 1, 2020. For those lucky enough to hold Bitcoin throughout this time, this corresponds to an incredible growth of 1,562.24% over five and a half years.

However, what people need to remember about Bitcoin is that it is extremely volatile. While profits can be very impressive, price drops can also be monumental. As people often tend to be emotional when trading - panicking when prices drop and exhilarated when prices rise - it is highly likely that many Bitcoin holders sold this cryptocurrency during one of its infamous crashes, such as in 2022. Therefore, if you are considering making Bitcoin a significant part of your investment portfolio, make sure you understand the accompanying risks and why it is so volatile.

With that in mind, below is the amount you could earn each year from 2020 to 2025 if you invested in Bitcoin.

Bitcoin Performance Each Year from 2020-2025

Except for the horrific crash in 2022, Bitcoin has had an impressive performance. But even those who sold at $16,547.50 in December 2022 would have doubled their money if they bought in at $7,200 on January 1, 2020. It is undeniable that over the past five years, Bitcoin has been a great place to invest. For risk-tolerant investors in 2022 who continued to hold, they have achieved massive returns in each of the past two years.

The question is whether Bitcoin will continue to achieve these impressive growth rates or revert to $7,200, or lower. You can find arguments for both outcomes from various analysts and financial experts. For example, billionaire CEO Warren Buffett has called Bitcoin 'probably the second derivative of poison.' But Cathie Wood, CEO of Ark Invest, believes that even in a pessimistic scenario, Bitcoin will still reach $300,000 by 2030 - and $3.8 million or more in the best-case scenario.

Each investor must decide for themselves how much Bitcoin (or other cryptocurrencies) they will add to their investment portfolio. However, this is only suitable for those with a high risk tolerance, and even for them, investments should be made with a small amount of money. Many financial advisors recommend allocating 0% to 5% of your portfolio to cryptocurrency.

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