You have $5K. Bank: $6K in 5 years. Bitcoin: $41K
Power Law model projection vs 4.5% bank APY
Bank (5yr)
$6K
4.5% APY
Bitcoin (5yr)
$41K
Power Law
Worst Case
$17K
60% crash + recovery
80/20 Split
$13K
80% bank / 20% BTC
Portfolio Comparison
Time Horizon Comparison
| Years | Bank (4.5%) | BTC (PL) | BTC (CAGR 20%) | Worst Case |
|---|---|---|---|---|
| 1yr | $5K | $14K | $6K | $2K |
| 3yr | $6K | $25K | $9K | $10K |
| 5yr | $6K | $41K | $12K | $17K |
| 10yr | $8K | $128K | $31K | $51K |
| 20yr | $12K | $732K | $192K | $293K |
Risk: How Much Can You Afford to Lose?
If you can only afford to lose 20% of your savings, your max Bitcoin allocation is $1,000. The remaining $4,000 stays safe in the bank.
This 80/20 split would be worth $13K in 5 years (Power Law) — capturing Bitcoin upside while limiting downside.
DCA Entry Strategy
Instead of buying $5K of Bitcoin at once, spread it over 6 months at $833/month. This reduces the risk of buying at a local peak.
Should You Put $5K 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
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