A quick Google search for cryptocurrency news may make you think the digital form of money is over, is collapsing, and is NOT a smart investment tool. But if you dive into the actual numbers from the last several years, it’s an entirely different story. Glenn and Stu show you how a $10,000 investment just two years ago in the DOW stock market versus in Bitcoin would have ended in DRASTICALLY different results…
TranscriptBelow is a rush transcript that may contain errors
GLENN: Really cool stuff. You'll be able to watch it on Blaze TV. And I'll describe it. If you happen to be listening to the podcast. Or on radio.
One thing that I am really -- really tired of, this week.
Is everyone saying, that cryptocurrency is over.
STU: Oh, yeah. Is that time of year again?
We all say this. Never coming back. It's over. Now, all these of people have written this article already years ago. Every time cryptocurrency goes down, they write the same article. They always say, crypto is dead. All the people. They find one person, who bought the absolute peak. Is down 50 percent.
STU: They highlight their life. And how it's been destroyed.
And this is over. And it's never going to come back.
GLENN: And it's amazing. Because none of it coincides with anything of anyone in the government. Their wishes and what they're trying to do.
STU: No. No. Everything they do is fine.
STU: So I decided to look back. Now that we're at a low point here. Right? We're down. Cryptocurrency has had a really bad year. How bad has it been? And let's compare to a normal investment. Okay. So here we go.
GLENN: All right.
STU: If you had invested $10,000, in the Dow Jones Industrial Average, one year ago, you would have $9,600 today. So you would be down a little bit. But not a lot. Just a little bit.
STU: Now, people would know, if you invested that same $10,000 a year ago, in bitcoin, you would be down a little more. You would actually only have $8500. So that's a thousand dollars difference.
GLENN: That's bad. That's bad.
STU: Pretty bad, right?
GLENN: We should stop there. And not look at any other time windows.
STU: It's interesting. Because that seems to be what all these articles are predicated on.
GLENN: That's weird.
STU: If we look at the worst possible time window for cryptocurrency. It looks pretty bad.
But I thought, how long do you invest in? Is it always a year, less than a year? My idea was, when you invest in something, you are usually holding it for multiple years. That is what I thought it was. So let's look back two years ago. Now, the two years ago, time frame is interesting. Because it would basically encapsulate, what we would call the inflationary period. Two years ago, was May 2020.
So this is when we were just starting to dump trillions of dollars, on to the -- into the economy.
GLENN: And people had nothing to do. They can't do anything. They're at home.
STU: This is when inflation starts churning. This is the two-year period of inflation. We've been told in these cryptocurrency is dead columns, that cryptocurrency is not working as a hedge against inflation. Because look at this one day where inflation numbers came out high. And crypto numbers went down.
GLENN: Got it.
STU: Instead, let's look at the entire inflationary period from two years ago. If you invested in the Dow, $10,000, you would have $13,400. It's a good return. Much better than a bank account. Great return.
If you invested that same $10,000 in bitcoin, two years ago, you would have $33,500.
GLENN: That's better.
STU: That's better. That's better.
GLENN: Okay. I wasn't sure. I'm not good at math. But crypto is dead. Remember that.
GLENN: So 33,000.
STU: 33,000 or 13,000. Which one would you rather have?
GLENN: I think I would rather have 33.
STU: Let's go back three years ago. Three years ago. You invested $10,000 in the Dow Jones Industrial Average. You would have $12,700 today.
GLENN: Not as good as the year --
STU: Not even as good as the year previous.
However, if you invested $10,000 in bitcoin three years ago, you would have 30,900. Which one would you rather have? 35,900 or 12,700?
GLENN: I would rather have the 39,000.
STU: Okay. All right. Or $35,000.
GLENN: 35,000. Thank you. I feel like I'm on The Price is Right.
STU: Four years ago, you invested $10,000 in the Dow Jones Industrial Average. Four years ago, you would have $13,300. Now, again, that's 33 percent over four years. It's not unbelievable. But it's not a bad return. It's a solid return. If you invested that in bitcoin, you would have $34,600. Again, almost three times as much money. Let's go back five years ago. If you invested in the Dow Jones Industrial Average. $10,000. You would have $15,800. Hey, that's 58 percent.
Right? That's a pretty good return on the Dow or five years.
Nothing wrong with that.
GLENN: No. That's a great investment.
STU: If you invested $10,000 in bitcoin five years ago, you would have $144,200.
GLENN: Which is bigger.
GLENN: Bigger than the 15.
STU: Almost ten times.
GLENN: Almost ten times.
STU: What you would have.
GLENN: So you can have, the risk is, you can have slightly less than the Dow in the last year. Or you can have three times as much in every year in between, and in the fifth year, you would have ten times as much. Which one is dead? Because I -- the Dow Jones Industrial Average looks like a solid investment. And certainly, less risky than random cryptocurrency projects.
GLENN: But the Dow has something going for it. It's a rigged game.
GLENN: You know, you have the fed pouring in the money. And the government supporting all of that.
STU: Uh-huh. Uh-huh.
GLENN: To make sure it never fails.
GLENN: So if bitcoin --
GLENN: In fact, bitcoin has the opposite of that.
STU: No protection.
GLENN: And yet it seems to be outperforming. Yeah. I'm going to go with the stocks. I'm going to go with the stocks. That's my -- I know this is a showcase showdown right here. But I'm going to say, Bob.
STU: Really? Yeah. Maybe, I don't know. Some of each, is a rational approach.
GLENN: Shut up.
STU: Recognizing, that maybe you might lose in the short-term with bitcoin.
GLENN: Well, 9,000 in stocks. And 1,000 in bitcoin. That would be crazy.
STU: That might work very well.