Why "Bitcoin Is Too Expensive" Is the Wrong Way to Judge an Investment
Ask why someone hasn't bought Bitcoin and you'll usually hear some version of the same answer: it costs too much. It's a reasonable-sounding objection that falls apart the moment you look at it closely, because affordability and value are two completely separate questions — and only one of them tells you anything about whether an asset is worth owning.
What a "Frame of Reference" Actually Is
Everyone carries an internal number that feels like "a lot of money." For some people it's $1,000. For others it's $100,000. That number is built from your income, savings, debt, and history — not from anything happening in the market.
Someone with a few million in net worth buying one Bitcoin at $10,000 is spending a rounding error. Someone straight out of college with student debt would need to borrow to do the same thing. Same asset, same price, completely different experience.
Here's the important part: neither person's reaction changes what Bitcoin is worth. The price is the price. Your frame of reference only tells you what you can comfortably risk — which matters enormously for position sizing, and not at all for valuation.
Affordability vs. Valuation
There's a real, defensible reason to skip an investment: you researched it and concluded the price exceeds what it's worth.
With a stock, that looks like pulling the P/E ratio, comparing it to competitors in the same industry, running the numbers, and landing on a fair value estimate. If the market price sits above your estimate, you pass. That's analysis.
With crypto, the equivalent work involves supply schedules, network usage, who the actual counterparties and holders are, competitive alternatives, and regulatory exposure. It's harder because the data is messier, but the principle is identical.
"It costs more than I'm used to spending" is not that process. It's a feeling wearing the costume of an argument.
Unit Price Tells You Almost Nothing
This is where crypto confuses people more than stocks do. A coin trading at $0.08 feels cheap. Bitcoin at six figures feels expensive. But unit price is arbitrary — it's just total value divided by supply.
A token at eight cents with an enormous circulating supply can be worth far more in aggregate than a token at $400 with a tiny one. If you want to compare two assets honestly, you have to look at total crypto market cap and how it's measured rather than the number on the price ticker. Once you internalize that, "expensive" stops meaning anything on its own.
The Hindsight Trap
Bitcoin has traded at roughly a dollar, then ten, a hundred, a thousand, ten thousand, fifty thousand, and a hundred thousand. At every single one of those levels, a large group of people said it was too expensive.
The common refrain today sounds like: "I wish I'd bought at $1,000, but I'd never buy at $100,000." Notice the logic — the past price is used to declare the current price unreasonable. That's backward-looking anchoring, not analysis. It's entirely possible that a $100,000 Bitcoin is worth far more in a decade. It's also possible it isn't. Neither outcome is settled by whether the number feels big to you.
This kind of anchoring is one of the more expensive habits in the market, and it sits alongside a handful of other mental biases that quietly wreck trading decisions.
How to Evaluate Crypto Properly
A workable process looks roughly like this:
- Understand the asset. What does it do, who uses it, and does that usage grow?
- Check the supply. Fixed, inflationary, or heavily concentrated among insiders?
- Compare alternatives. What else solves the same problem, and why would this win?
- Define your thesis. What would have to be true for this to be worth more later?
- Size the position to your finances. This is where your frame of reference finally belongs.
That last point matters. Your personal number isn't useless — it just belongs in position sizing and risk management for crypto portfolios, not in the valuation step. Deciding you can only risk $500 is smart. Deciding Bitcoin is overvalued because $100,000 sounds like a lot is not.
If You're Investing for Decades, Structure Matters
The reality is blunt: plenty of crypto assets will eventually go to zero, and some will keep performing. Doing the research is the only way to improve your odds of being on the right side of that split.
If your conclusion after that research is that you want exposure held for the very long term rather than traded, the account wrapper becomes part of the decision. Many long-horizon investors look at opening a crypto IRA for tax-advantaged retirement exposure, with iTrustCapital being one of the widely used options for holding crypto inside a retirement account. It's a structural choice worth understanding before you buy, not after.
Whatever you decide, decide it on evidence. If you want to work through crypto valuation with other investors doing the same research, the Skool community at skool.com/crypto-profit is where those conversations happen.
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