I Invested $50 in Bitcoin in 2022. Here's How Much I've Gained (and Lost)

Welcome to 2025. It's Jan. 1, and this is my first article of the year. As I have in every first article since 2022, I'll be talking about Bitcoin.

I started 2022 with a bold experiment: I decided to invest my entire PayPal account balance in Bitcoin. At the time, that amounted to a "vast" sum of $50 (plus another $1.15 in PayPal fees). I documented my experience throughout the year, and now, on Jan. 1, 2025, I'm back to tell you how my investment fared over the last 12 months.

To quickly recap my 2022 experience, I lost a lot of money on my Bitcoin holdings. By July 1, my investment had dropped by 60%. I decided to stop checking on it and returned on New Year's Day of 2023 to find that I'd lost 66% of my original investment. I was glad I hadn't bought into Bitcoin earlier, when prices were much higher.

I waited to check on my investment again until New Year's Day of 2024. By then, the value of my holdings had nearly doubled since the previous July. However, I was still underwater on the investment.

Now, finally, we arrive at New Year's Day, 2025. While I didn't check on my investment throughout 2024, I've been following the news closely.

First, there was the Bitcoin halving process. A scarcity algorithm is built into Bitcoin. Every time a new 210,000 blocks are mined in the blockchain, Bitcoin's reward to miners is reduced. This happens roughly every four years. On April 19, 2024, the block reward was reduced from 6.25 bitcoins to 3.125 bitcoins. The idea is that this reduces the incentive for mining, thereby putting less currency into the market and increasing overall value.

But the big event, the one that caused Bitcoin to surge in value, was the election. The overall value for a single Bitcoin was in the $60K range all through 2024, even after the halving event. It was at $69,494 on Nov. 1.

On Nov. 6, it jumped to $75K. By Dec. 1, it was at $97K.

According to Reuters, incoming President Trump is very bullish on cryptocurrency. Since the value of the coin is based entirely on the value traders put into it, Reuters believes the incoming president's pro-crypto stance fueled the rise in currency prices overall, and Bitcoin's in particular.

My Bitcoin holdings, as of about 5 p.m. today, Jan. 1, 2025, are up to almost $100 (it's at $99.92). That's almost double what I invested. Remember that though I invested $50, PayPal took $1.15 in fees. So my profits are up 95% instead of just about 100% because of those fees.

So, does this mean I'm now bullish on Bitcoin? No more than any other investment that can crater and skyrocket according to the whims of the market, no.

Look, I'm not qualified to make investment recommendations. But I'm still convinced that cryptocurrency is nuts. All cryptocurrency is, is an agreement among a bunch of people to assign an arbitrary value to an algorithm. That seems like crazy talk.

On the other hand, that's our entire economy, isn't it? We assign money a value and agree upon it, whether it's dollars or even gold. Stocks have value because of how a bunch of people behave when buying and selling them. Even algorithms have value. Microsoft, for example, has been making bank for years off of Office revenue, and all Office really is, fundamentally, is a collection of algorithms.

I'll tell you this: I'm not going to be increasing my stake in Bitcoin. I'm not putting any more than my original $50 (plus fees) into the cryptocurrency. I'm just not into that kind of gambling. But I live in the same society and economy that all of you do, so I'll be spending every workday doing my best to make dollars -- which land in an account electronically.

I'll then push some other buttons on screen to order groceries via Instacart or products via Amazon. So, yeah, while dollars are backed by the gold reserves of the US Treasury (conspiracy theories not withstanding), my personal experience of real dollars isn't all that much different in practice than that of Bitcoin.

Will Bitcoin or other cryptocurrencies replace the dollar? It's possible. The world is just wacky enough to do it. Think about it this way: Before the 1950s, we didn't really use credit cards. Now they'