The Believers Who Rode Bitcoin to a Record High—and the Ones Who Missed Out

Few would have the stomach to hold on after watching a $20,000 investment soar halfway to $1 million in 2021 only to have nearly all of it evaporate.

After the price of bitcoin rose above $69,000 to a record high Tuesday, the 45-year-old in Palmer, Alaska, said he feels vindicated. His crypto holdings are back up to $150,000, though still short of the peak he discussed with The Wall Street Journal last year.

“Rather than being euphoric, it’s more like, I told you so," said Oathout, who owns a small construction company. “I knew there would be a comeback point."

Today, those who hold, or once held, the best-known cryptocurrency fall into two main groups: FOMO and told ya. Oathout and other die-hard crypto investors say their optimism never waned. Some who sat out this bitcoin rally, meanwhile, now wonder if and when they should buy back in.

Bitcoin is one of thousands of cryptocurrencies that have captured the imagination of investors. It is the largest token in a universe that also encompasses pup-inspired coins such as dogecoin and shiba inu coin, which all rallied in 2021, becoming worth billions of dollars. Some tokens then crashed and haven’t come back.

Bitcoin has. Its appeal is largely due to its size and status as the first cryptocurrency. It has long been the easiest to buy and sell. But its volatility is part of the appeal for traders, whether they believe it is the future of money or just a way to make some.

Crypto investors and analysts attribute the latest surge to the approval of exchange-traded funds that hold bitcoin in January. This made it easy for anyone with a brokerage account, such as Fidelity or Charles Schwab, to plug in a ticker and invest in bitcoin. Investors have piled into these funds, but that alone can’t explain the full extent of the rally.

Much of bitcoin’s climb started last week, following a strong surge of buying on one crypto exchange, according to data analytics firm Kaiko. It is unclear what drove the rally and whether it is sustainable. After notching a new record, bitcoin tumbled, falling 8.6% for the day by late afternoon Tuesday.

Oathout has been buying the dip, scooping up bitcoin when it was as low as about $17,000, in addition to smaller cryptocurrencies. He just wishes he had put more in when the market was down.

“I was even considering taking out a home-equity loan and throwing a bunch of money at it, but that’s where I stopped myself," he said.

Missing out

Chad Brewer watched bitcoin’s surge with a bit of envy.

Brewer, a 34-year-old in Fort Smith, Ark., who works at a developmental-disability treatment center, has been putting money into a smaller coin called hbar for the past year, because he believes in its technological potential.

His investment in hbar grew from about $5,000 to $7,000. He wishes he also put money into bitcoin, as he considered in late 2022, when the price was below $20,000.

Brewer said he is channeling his FOMO into stepping up his investments in hbar.

“It makes me want to have more money in the game," he said. “I don’t have any bitcoin and I’m sad I’m missing out on that price action, but I also feel good about what I’m buying into."

Brewer has automated a $5 purchase of hbar every day, which he occasionally boosts to $50.

Anna Naphtali, meanwhile, gave up bitcoin for flipping houses near where she lives in Savannah, Ga.

The 42-year-old production designer got burned in the 2022 crypto crash. She said she felt in 2021 that crypto was being overhyped but that because the price was going up and down, she could make money by buying it and selling it when it rose.

Naphtali put more money in when a friend told her bitcoin was going to skyrocket. Soon after, the platform she used went bankrupt. She said she got paid out the dollar value of her holdings at the time of the crypto collapse months later, roughly half of the $40,000 she had invested.

“I don’t really have a sense of FOMO," she said of the current rally. “Cryptocurrency was hyped so much. My grandfather was really good at investing his whole life and he never believed in trendy items as having longevity."

Keep holding?

Financial advisers tend to be pretty conservative about how much crypto, if any, should be in one’s portfolio.

Those who still want to invest in it shouldn’t commit more than 3% of their investible assets, said Joshua Escalante Troesh, a financial adviser in Rancho Cucamonga, Calif.

“For clients who like to have fun with investing or trading, we’ll usually create a sandbox account that could go to zero without impacting their retirement or other goals," he said.

People who have held bitcoin as its price has increased should check to see if it now takes up a larger percentage of their portfolio than they are comfortable with, advisers say.

To help clients decide what they should do with crypto that has appreciated, Troesh uses a strategy of “regret minimization." He asks them how much regret they would have if prices shot up after they got rid of it and if prices plummeted after they resolved to keep it.

Jalen Nelson has put six figures into crypto investments over seven years. His plan is to hold on to the bitcoin he owns and funnel more money into smaller tokens now that the cryptocurrency has gotten more expensive.

Nelson, a 28-year-old who works remotely from Medellín, Colombia, for a tech company, sees bitcoin’s recent run-up as the beginning of a bull market.

“After that last bear run, you’re either on the side of crypto or you’re not," he said. “I’m not going to try to convince you. I’m not going to talk to you about it."

Wite to Joe Pinsker at joe.pinsker@wsj.com and Caitlin Ostroff attlin.ostroff@wsj.com