You have $500. Bank: $623 in 5 years. Bitcoin: $4K
Power Law model projection vs 4.5% bank APY
Bank (5yr)
$623
4.5% APY
Bitcoin (5yr)
$4K
Power Law
Worst Case
$2K
60% crash + recovery
80/20 Split
$1K
80% bank / 20% BTC
Portfolio Comparison
Time Horizon Comparison
| Years | Bank (4.5%) | BTC (PL) | BTC (CAGR 20%) | Worst Case |
|---|---|---|---|---|
| 1yr | $523 | $1K | $600 | $200 |
| 3yr | $571 | $2K | $864 | $984 |
| 5yr | $623 | $4K | $1K | $2K |
| 10yr | $776 | $13K | $3K | $5K |
| 20yr | $1K | $73K | $19K | $29K |
Risk: How Much Can You Afford to Lose?
If you can only afford to lose 20% of your savings, your max Bitcoin allocation is $100. The remaining $400 stays safe in the bank.
This 80/20 split would be worth $1K in 5 years (Power Law) — capturing Bitcoin upside while limiting downside.
DCA Entry Strategy
Instead of buying $500 of Bitcoin at once, spread it over 6 months at $83/month. This reduces the risk of buying at a local peak.
Should You Put $500 in Bitcoin?
The bank is guaranteed but slow — 4.5% APY barely keeps up with inflation. Bitcoin is volatile but has dramatically outperformed over any 4+ year period in its history. The answer depends on your time horizon and risk tolerance.
Not financial advice. Bitcoin can lose 50%+ in a single year.
Other savings amounts
You might also like
New to Bitcoin? Start here.
Our free 10-module course covers everything from the basics to self-custody — no jargon, no shilling.
Want to customize these numbers?
Use the full Bitcoin FIRE Calculator to adjust your age, savings, expenses, and growth models. Plus explore our free 10-module Bitcoin course.