Got $500? 2 Cryptocurrencies to Buy and Hold for Decades

Key Points

• During the past decade, both Bitcoin and Ethereum have ranked among the top-performing assets in the world.

• Investors are now predicting that Bitcoin will zoom past the $1 million price point sometime within the next five years.

• Ethereum, due to its enormous utility, is also poised to go on a record-setting run during the next decade.

• 10 stocks we like better than Bitcoin ›

Being a long-term, buy-and-hold investor in crypto is harder than you might think. The crypto market is populated by short-term momentum plays, speculative meme coins, and a bunch of trendy tokens that soar in value before eventually crashing back to earth.

However, there are two cryptocurrencies that have shown their staying power during the past decade. During that time, they rank among the very best investments you could have ever made. And they both have impressive long-term growth prospects.

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Yes, I'm talking about Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH).

Bitcoin

According to a 2024 research report from WisdomTree (NYSE: WT), Bitcoin was the top-performing asset in the world in nine of the past 12 years. And that didn't even include full-year results from 2024, when Bitcoin once again turned in triple-digit percentage returns and was the top-performing asset in the world. So make that 10 of the past 13 years, dating all the way back to 2012.

For that reason, Bitcoin has absolutely skyrocketed in value. Back in 2013, Bitcoin traded for less than $1,000. Today, it trades for more than $115,000. That's a 100-fold return on your money in just over a decade. Although past performance is no guarantee of future success, it certainly bodes well for how Bitcoin will perform over the next decade as well.

Image source: Getty Images.

In fact, many investors now expect Bitcoin to top the $1 million price point sometime within the next five years. From there, Bitcoin could soar still higher. For example, Michael Saylor, founder and executive chairman of MicroStrategy (NASDAQ: MSTR), which is now doing business as Strategy, thinks that Bitcoin will eventually hit a price of $21 million within the next 21 years. That implies a compound annual growth rate (CAGR) of nearly 30% for the next two decades.

The only caveat with Bitcoin is that it is prone to boom and bust cycles, each one lasting about four years. That's why, for example, Bitcoin crashed by 64% in 2022 and 73% in 2018. So, if you are planning to buy and hold Bitcoin for the long term, you need to be comfortable with Bitcoin's volatility. Some years, quite simply, are going to be stinkers.

Ethereum

Arguably, there's only one other cryptocurrency that can possibly challenge Bitcoin in terms of overall performance, and that's Ethereum. During the past decade, there have actually been several years when Ethereum wildly outperformed Bitcoin.

Back in 2020, Bitcoin surged by 304%, but Ethereum returned 472%. In 2021, Bitcoin soared by 59%, but Ethereum went parabolic, skyrocketing in price by 395%.

The key to Ethereum's success has been its enormous utility. That's just crypto jargon for "having many uses." Many cryptos are basically worthless, but Ethereum is not. Its core blockchain serves as the foundation for a significant part of the value that was created in the blockchain and crypto world during the past decade.

For example, Ethereum remains the leading player in the world of decentralized finance (DeFi). According to the latest data, Ethereum still accounts for nearly 60% of total value locked (TVL), which is a useful proxy for DeFi market share. That's why the Trump administration has been aggressively supporting Ethereum-related DeFi investments and why digital asset treasury companies are now buying up Ethereum.

But, as with Bitcoin, Ethereum is also prone to enormous volatility. And it also faces the prospect of new competitors taking market share. For example, during the past five years, challengers such as Solana (CRYPTO: SOL) and Sui (CRYPTO: SUI) have launched. Just like Ethereum, they are smart contract blockchain networks with enormous potential utility.

How to spend $500 on Bitcoin and Ethereum

The big question, of course, is how to spend $500 on Bitcoin and Ethereum. The price of Bitcoin is now about $115,000 and the price of Ethereum is roughly $4,500. You could just buy tiny fractional pieces of these coins in the crypto market. But, somehow, there's nothing very satisfying about looking at your investment portfolio and seeing that you only own .004 of a BTC or 0.111 of an ETH.

One possible solution is to spend that $500 on spot crypto exchange-traded funds (ETFs) that were specifically designed to track the spot prices of Bitcoin and Ethereum. If you assume a 70/30 split between Bitcoin and Ethereum, that leaves you $350 for Bitcoin and $150 for Ethereum. With that money, you could pick up five shares of the iShares Bitcoin Trust (NASDAQ: IBIT) and five shares of the iShares Ethereum Trust ETF (NASDAQ: ETHA).

Problem solved. You would still have a few bucks left over that you could move into stablecoins at some point in order to pick up some additional yield.

Of course, there's no guarantee that Bitcoin and Ethereum will continue to soar in value at their historical growth rates. But I can't think of two better cryptocurrencies to buy and hold for decades.

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Dominic Basulto has positions in Bitcoin, Ethereum, Solana, and Sui. The Motley Fool has positions in and recommends Bitcoin, Ethereum, Solana, and Sui. The Motley Fool recommends WisdomTree. The Motley Fool has a disclosure policy.