Bitcoin, Risk, and Why I Don't Own It

Jose Alvarez, CFP®, MBA
Sep 4
5 min read

Updated: Oct 21

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Let’s start with a familiar name: Robert Kiyosaki. Recently, Kiyosaki made another bold claim, saying a "civil war has begun" and urging Americans to put their cash into gold, silver, and Bitcoin.

The problem with these “doomsday callers” is that they live on repeat. They make a dramatic call once, it gets attention, and then they spend the rest of their careers chasing that same lightning strike.

The thing is... if you keep screaming about a storm coming, eventually you’ll be right. Markets are cyclical they'll ebb and flow. Good days come and are followed by bad days. But most of the time, these claims are wrong. We know that because markets, historically, have gone up about 75% of the time. At some point that won't be the case... fine... but I don't know that it'll happen any time soon. But if you ask people like this, they'll tell you it's right around the corner and I can’t help but wonder how they don’t get tired of being wrong.

Five-Year and Ten-Year Performance

I pulled up five-year charts for Bitcoin, Gold, Silver, and the S&P 500.

Why five years? Because it was the easiest click.

No cherry picking here... just good ol' fashioned laziness.

Bitcoin: up nearly 1,000%
Gold: up 75%
Silver: up 44%
S&P 500: up 82%

Looking back over ten years, annualized returns stack up like this:

Bitcoin: 84.5%
S&P 500: 14.5%
Gold: 11%
Silver: 10%

Those are strong numbers all around. Historically, the S&P 500 has averaged 9–10% annually over the last 60–70 years, so seeing the past decade hit 14.5% should be encouraging to investors in itself - regardless of its comparison to Bitcoin.

The Missing Piece: Risk

Returns only tell half the story. What really matters is the risk you take to get them.

Ten-year annualized volatility:

Bitcoin: 67%
S&P 500: 18%
Gold: 14.5%
Silver: 26%

For most people, it’s not realistic to master both your own profession and the nuances of investment risk analysis. It's too complicated. It's too convoluted. Frankly, it's boring a.f. to someone who might just be doing this to play around. If you're a nurse, teacher, engineer, construction worker, parent, etc... you have enough on your plate. You don't need to try to be an investment analyst, too.

But for those of you who DIY investments, volatility (called standard deviation) is one of those concepts that’s critical but often overlooked.

Standard Deviation in Plain English

If you think back to high school statistics, you might remember the bell curve. One standard deviation (the dark blue middle of the curve) captures about 68% of outcomes. Two standard deviations (the light blue section) cover about 95% of outcomes.

For the S&P 500 over the last decade (14.5% average return ± 17.7% standard deviation):

One standard deviation range: –3.2% to +32.2%
Two standard deviation range: –21% to +50%

For Bitcoin (84.6% average return ± 67.1% standard deviation):

One standard deviation range: –17.5% to +151.7%
Two standard deviation range: –50% to +219%

Many of the client I work with would have a hard time stomaching the volatility that comes from simply owning the S&P 500. Imagine having an investment make up the majority of your investment and carries a volatility window that is 5x that of the S&P 500... that’s a massive window. When you invest, you have to remember:

It’s not just about potential upside. It’s about whether or not you can stomach the downside.

Why I Don’t Own Bitcoin

Here’s where I stand: I don’t own Bitcoin, and I don’t plan to.

People assume non-owners fall into three camps:

They’re bitter against it and everyone who's benefitted from it because they didn't invest and “missed the boat."
It’s a generational divide (younger investors own it, older ones don’t) - I can agree with this stance.
They don’t want to look foolish buying at $100k in 2025 when it used to be like $30k in 2019.

I’m mid-30s, and I still don’t buy it.

For me, the issue is intrinsic value.

Bitcoin absolutely has a price, which is north of $100,000 per coin today. But price and value aren’t the same thing. I don’t believe the intrinsic value supports the price.

When Bitcoin first came out, the fairytale was that it would replace global currencies. As far as I'm concerned, that was never realistic. It wasn't in 2009 and it's still not in 2025. I don't see a scenario where countries give up a major part of their sovereign strength and pride by giving up their currency for Bitcoin.

Bitcoin itself doesn't have anything special. It's just the brand name of crypto. Blockchain, which Bitcoin operates on, is an immediate settlement system with very high levels of security and anonymity. Useful, sure, but not revolutionary enough to justify its current valuation. To me, at its core, Bitcoin is nothing more than a highly sophisticated payments processor.

Because I believe this, I ran an exercise: if Bitcoin’s growth had mirrored other payment processors like Visa, MasterCard, PayPal, and Venmo (with a premium for sophistication), what would it be worth today? I asked ChatGPT to run the simulation and give me the potential outcomes.

According to ChatGPT's simulations and given the inputs I gave it, Bitcoin should be worth about $2,400 per coin today. That’s a far cry from $100,000+ and only further solidifies why I don't own it. I don't care that people really want it... I don't believe it has the value reflected in the price. I don't feel a need to follow the herd - even if it costs me money.

Final Thoughts

Bitcoin has been an incredible performer in terms of returns, volatility, and even risk-adjusted measures like the Sharpe ratio. But I don’t own it because I view it as speculation, not investment. For me, the fundamentals don’t support the story.

Could I be wrong? Maybe. But even if Bitcoin hits $10 million per coin, I’ll still sleep at night knowing I made my decision based on risk, value, and discipline.

I don't lose sleep over not winning the Powerball drawing and I won't lose sleep over not holding Bitcoin.

Jose Alvarez, CFP^®, MBA

Founding Advisor

Harvest Horizon Wealth Strategies

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The information presented in this blog is the opinion of the author and does not reflect the views of any other person or entity unless specified. The author may hold positions in any securities discussed in this blog. The information provided is believed to be reliable and obtained from reliable sources, but no liability is accepted for inaccuracies. Images included in this blog are created by artificial intelligence. Any resemblance to any existing persons, past or present, is purely coincidental. The information provided is for informational, entertainment, and educational purposes and should not be construed as advice. Advisory services are offered through Harvest Horizon Wealth Strategies LLC, an investment adviser registered with the state of Wisconsin.