The Bitcoin price has been on a tear this year. The value of the cryptocurrency has nearly doubled since the beginning of 2020. Some analysts believe this could be just the start of a long run higher for the asset.
However, despite this performance, I’d rather invest my hard-earned money in stocks and shares. I think I stand a much higher chance of being able to make a million using this approach than owning the Bitcoin price.
The road to a million
Bitcoin has proved all of its doubters wrong over the past few years. When it first burst onto the scene towards the end of 2017, many high-profile financial figures labelled the cryptocurrency nothing more than a fad.
These projections have not aged well. In fact, one could argue that Bitcoin has proven itself in 2020. The asset has been a great hedge against uncertainty this year and has achieved one of the best performances of any financial asset as a result.
Despite this performance, I’m not convinced the Bitcoin price is a good investment. That said, I’m not entirely against owning it in a portfolio. Some investors may feel comfortable owning the crypto asset, but it may be sensible to limit exposure to a relatively small percentage of assets. This could limit potential losses if it turns out to be a poor decision.
An alternative to the Bitcoin price
Instead of Bitcoin, I’d buy stocks and shares to make a million. Some shares have actually outperformed Bitcoin over the past 12 months. Growth and technology stocks have performed exceptionally well in the coronavirus crisis, as customers have signed up in droves.
For example, technology giants PayPal, Apple, Microsoft and Amazon.com, are all leaders in their respective fields. I’d much rather own these stocks in a portfolio than cryptocurrency.
Owning stocks and shares comes with many more security benefits than Bitcoin. Investors are protected up to a certain level if a stockbroker collapses, and it’s very difficult for criminals to steal investments owned in your name.
The Bitcoin price doesn’t offer the same protections. As such, unless investors have a detailed understanding of how the crypto asset and its infrastructure works, they could be exposing themselves to unnecessary risks.
The bottom line
So, that’s why I’d avoid the Bitcoin price and buy stocks and shares instead. An investment in a company like Microsoft could provide the same sort of returns with significantly reduced risk. I believe following this approach will enhance my chances of being able to turn an investment of £10,000 into £1m.
Indeed, over the past decade, the S&P 500 has produced an average annual return for investors of around 13%, at this rate of return, my figures suggest it would take 36 years to turn £10k into £1m. With added investments of £100 a month, it may be possible to hit this lofty target in just three decades.