Personal Finance

I've been investing in my 401(k) for the last 10 years and I wish that I had invested in Bitcoin instead

Joey Frenette

Published: January 17, 2025 8:33 am

It’s all too easy for beginning investors to go overboard with the shoulda, woulda, and coulda. Undoubtedly, this type of mentality isn’t good for you, your portfolio, or your long-term financial game plan. Instead of looking back and weighing the bet you made with other, likely superior-performing options you may have considered, it’s far more constructive if you focused on the road ahead and dismissed any shortcomings of prior moves you’ve made.

Indeed, if you made a market-beating 30% gain last year, you may still feel bad if you stack up your portfolio’s performance against one of the S&P 500’s biggest gainers. Indeed, odds are you underperformed Nvidia (NASDAQ:NVDA) and the numerous other AI winners on the year, but does that mean you should change your investment strategy or “give in” and buy the hottest momentum plays in this market to maximize your returns next year?

Of course not! Chasing returns and setting too high a bar for yourself can lead you to speculate and gamble on assets you don’t fully understand, ultimately leading to a greater risk of steep financial losses. Indeed, sometimes you have to know when to be content with the results your portfolio can give. Often, a market-trailing year or two may not need any drastic alterations in your investment strategy. 

Beware of FOMO in 2025

On the one hand, there’s the fear of missing out (FOMO) that can cause one to stray off course with their investment plans. Those with a strong sense of FOMO after historic bull runs may be inclined to take greater risks, potentially leading to them overstretching for a shot at a higher return. Undoubtedly, it’s never a good idea to gain chase just because your peers or folks you’ve seen on social media are making small fortunes from various high-risk, high-return speculative assets.

It’s not hard to imagine that many folks are kicking themselves over not getting into Bitcoin earlier, with the cryptocurrency more than doubling over the past year.

Indeed, Bitcoin was the talk of the town a year prior, and one could easily envision themselves as having bought a sizeable position back at the start of 2023 or even 2015 for those who kept up with the crypto class well before it dominated the financial headlines.

Are you fretting over missing out on Bitcoin’s run? You’re not alone.

Take the case of this Reddit poster, who wishes they’d bought into Bitcoin over the past decade rather than prudently investing with their 401(k) plan. Indeed, it can be crushing to think about what could have been, given Bitcoin’s profound melt-up in recent years. However, this kind of thinking is unhealthy and could cause one to derail an otherwise healthy financial plan for one that could risk the farm.

Nobody knows where Bitcoin will end up this year. Sure, thinking about a potential run to $1 million Bitcoin could cause some to chase the asset well after it’s had its best moment. That’s the nature of FOMO.

Can Bitcoin deliver 10x gains again? Potentially. At the same time, it could also be cut into tenths. It’s hard to tell what’s likelier, which is what makes Bitcoin such a tough asset to own with anything more than a small percentage of your portfolio.

In any case, I’d encourage investors in a similar pair of shoes to “tune out” of all crypto-related news stories for a while as they look to do the responsible thing by continuing to contribute to their 401(k) plans. Indeed, you don’t need to be in a red-hot asset early to grow rich over time. You can get the job done in a boring, old-fashioned way through 401(k) contributions and compound interest.

The bottom line

For those feeling a sense of missing out on Bitcoin, I’d strongly encourage bringing up the feelings with a financial advisor. Perhaps they can suggest ways to redirect your focus to efforts that are more productive and conducive to a prosperous financial future.