How Much Would You Have Today If You Invested $1,000 In The Top 5 Cryptocurrencies a Year Ago?
If you invested $1,000 in the top 5 cryptocurrencies a year ago, how much would you have now?
Over the previous 12 months, virtually all cryptocurrencies have soared in price. And, despite bitcoin being the most famous cryptocurrency around, it actually fared worst out of the big five currencies that dominated this rise. As such, this begs the question, "How much would you have today if you invested $1,000 in the top five cryptocurrencies just 1 year ago?" Well, the guys over at The Motley Fool recently posted the same question. Here's what they found...
First off, which five cryptocurrencies will we be looking at?
Today we're going to look at the five biggest cryptocurrencies around, that have been available to trade for the last 12 months at least. These are as follows:
Bitcoin was the first ever cryptocurrency and is the one that is still most discussed. It has now been in existence for about eight years and remains the most valuable cryptocurrency by a long margin. In fact, it's been so successful that plenty of other cryptocurrencies have forked off from it (notably Bitcoin Cash).
If you don't know much about Ripple, then one important thing to learn is that it's not designed to be a payment currency. Instead, the main focus around Ripple is to create a faster and more affordable way for banks to carry out money transfers all around the world. It has seen incredible success in the last 12 months, having secured partnerships with many large banking names, such as MoneyGram International and American Express.
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Similar to Ripple, Ethereum isn't designed as a payment solution for consumers. Instead, it is built for business usage. To date, more than 200 organisations are currently testing Ethereum to see how it fares.
Stellar has seen nothing short of a stellar rise in the last year or so, as it's garnered attention from a number of large companies, such as IBM. This cryptocurrency is also not aimed at consumers, but instead at enterprise clients. Its main selling point being that it offers transaction-processing times of just a few seconds, as well as incredibly low fees.
Having forked off from bitcoin in 2011, Litecoin has had a long time to mature and develop as an incredibly powerful cryptocurrency all on its own. It is also intended for use as a payment currency and offers a number of unique advantages over bitcoin. This includes lower processing fees and shorter transaction times.
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So, how well have these currencies performed in the last 12 months?
As of the 13th April, here's a look at the individual cryptocurrency performance of the big five.
|Cryptocurrency||Price on April 13, 2018||Price on April 13, 2017||% Change|
|Bitcoin (BTC-USD)||$8,074.00 +$753.76||$1,177.30||650%|
Data source: www.investing.com. Prices as of April 13, 2018 at 10:30AM EDT.
It's worth mentioning that there are a few other cryptocurrencies that have shown greater increases than these. However, they weren't available 12 months ago for trading. This includes Bitcoin Cash, Cardano and EOS. Perhaps if we look at this again in 12 months time, those three will be included in the top five.
So, how much would a $5,000 investment be worth today?
If you invested $1,000 into each of these top five cryptocurrencies, then the total value today would be worth a whopping $128,240. So, to be clear, that represents a total return of more than 25 times your initial upfront capital investment. Even more impressive is the fact that these cryptocurrencies aren't even at their peaks right now. 2018 has seen each one take a plunge in value, that could have seen your total investment now worth closer to $200,000.
Also, bear in mind that they would be strictly worth that much if you made one-time purchases 12 months ago and sold today. There have been reports of individuals earning much more than this off smaller investments by being able to buy and sell the currencies when they were passing through highs and lows.
What will the next 12 months hold?
Well, this is the million-pound question. It's impossible to tell what will happen in the cryptocurrency market. With hindsight, everyone with half a brain would have taken their entire life savings just 12 short months ago and plunged it into as many cryptocurrencies they could find. That is, of course, knowing what they know now. In fact, that's just what plenty of people did in the latter stages of 2017, only to be burnt once the value of many currencies rapidly declined.
However, there is nothing to say that we can't see equally impressive results in the next 12 months. But it would be wise to realise that it might not be the same five currencies that perform so well. As they become more valuable, it takes larger and larger increases to see the same levels of return. In fact, it's not realistic to presume Stellar will see another 7,000% increase as this would leave it becoming more valuable than all other cryptocurrencies combined!
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