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Due to its uniqueness, Bitcoin has the potential for a significant asymmetric reward, which implies that the upside is far greater than the downside.
Consider some of the guys who might have invested $10k or less into bitcoin 8-12 years ago, and yeah of course, the earlier they invested the better, yet $10k for some folks might have had been a whimpy investment.. and even a $1k investment in 2012 might have gotten you close to 200 bitcoin, and surely some folks might consider that amount to have had been pretty whimpy, and so the return ended up being way more disproportionate to the upside as compared to the amount invested or the amount put at risk, even if you consider opportunity costs of the invested money and even if you consider that the money devalued over the next 8-12-ish years, depending on when the guy got into bitcoin.
Those that purchased Bitcoin at the beginning did, in fact, receive a very disproportionate return on their investment. Regarding opportunity cost, I totally agree. Even if someone bought Bitcoin with money that they could have invested in something else, the return on their Bitcoin investment would likely be much higher than the return they would have gotten on that other investment. Of course, all of this is hypothetical.
It is impossible to predict with certainty what would have happened if someone had chosen to invest in something other than Bitcoin. However, considering Bitcoin's potential return on investment in contrast to other viable options, such as stocks, bonds, real estate, or other assets, is still an intriguing thought. It's possible that Bitcoin has occasionally performed significantly better than those other investments. For instance, during the last ten years, the S&P 500 has returned roughly 7% annually on average, but during the same period, Bitcoin has gained over 200% annually on average.
Naturally, past performance does not guarantee future success, and as Bitcoin is far more erratic than the stock market, its returns can vary greatly from year to year. But there is certainly a chance for an enormous return on investment.
The power of compounding rewards is another intriguing point to consider. Compounding allows the return on your investment to gradually increase over time. For example, if you invest $1,000 and get a 10% return, you'll have $1,100 at the end of the year. But if you reinvest that $1,100 and get another 10% return, you'll have $1,210 at the end of the second year. And so it goes on and on. Therefore, the compounding effects of Bitcoin's returns may have led to a significantly higher gain over time than someone might have predicted, even if they had only invested a little amount of money. For instance, if a person had invested just $100 in 2010 and HODLED their BITCOIN, they would have accumulated over $300,000 by the end of 2021. Even if that's a very specific and uncommon situation, it's still intriguing to think about how Bitcoin investors' performance might have been influenced by compounding gains.