Can cryptocurrencies make you a millionaire? It’s a question that many of our readers ask. Before the age of widespread cryptocurrency awareness, when most people thought about trading or investing, they’d probably think of stocks, shares, commodities, currencies and bonds. Walking into your bank and asking about Bitcoin would probably have gotten you a blank -or odd – look at best. Whether cryptocurrencies are going through bull or bear times, people still want to know, ‘can cryptocurrency make you a millionaire?’ It’s an interesting question which we’ll dig into in this blog post.
Let’s take a quick look at the king of cryptocurrency, Bitcoin
Introduced in 2009, the electronic cryptocurrency bitcoin is exchanged through its payment network. Bitcoin can be stored in a virtual online wallet known as a hot wallet or offline in a cold wallet.
Bitcoin is a decentralized, peer-to-peer currency which relies on cryptography to facilitate currency generation and transactions.
Every single transaction is recorded in a public list called the blockchain.
This makes it possible to trace the history of bitcoins to stop people from spending coins they do not own, making copies or undo-ing transactions.
From the dawn of its inception, people have been getting rich from bitcoin and other cryptocurrencies. People have been riding the wave of crypto growth and doing rather well from it.
For example, Bitcoin was worth around $13 in 2013, and at the most peak price we’ve seen so far was nearly $20,000 in 2018. That means if you had just purchased $200 of Bitcoin in 2013, it would have been worth over $300,000 if you sold at the peak price! That’s a 1500x return on your money!
So how can we get rich from cryptocurrencies today? I’ll break it down into an easy way, a more difficult way and touch on some other available ways.
The easiest way to get rich from cryptocurrency — buying and holding
Buying and holding is the method you’re probably most familiar with when it comes to investing and making money with traditional stocks and shares.
You purchase some sort of asset, you let it increase in price and then you eventually cash out.
It’s the same idea when buying and holding (or hodling) with crypto. You are waiting for the price of your chosen cryptocurrency to rise so you can sell at a price pointhigher than when you bought.
This is one of the best and easiest ways to focus on when making money from cryptocurrency.
The simplest place to do this is Coinbase. Using this link, you’ll get $10 in bitcoin when you buy or sell $100 or more on Coinbase
While there are MANY different coins out there, we recommend you stick to the most well-known coins such as Bitcoin, Litecoin, Ripple and Ethereum. These are the safest and have been around for a while. If you invest in a new coin, it may be cheap to buy lots of them, but there’s a very high chance the coin could just disappear.
Coins that have been around a while don’t have that same commercial risk.
The most difficult way to become a millionaire from cryptocurrency — day trading
Day trading is more advanced and involves looking for patterns in financial trading charts. It’s a full-time job for many! Because cryptocurrency is very volatile in that the price can change drastically over a day, someone who constantly tracks the price over a day, and takes positions within the day, can make a large return on their trades.
We wouldn’t recommend this if you’re a beginner or if you don’t have the time and energy to follow charts every single day. If this sounds like you, it would be better to consider other options.
But if you have experience in trading or previous knowledge in crypto, this could be THE way for you to use cryptocurrency to your benefit!
Just find yourself a reputable and safe cryptocurrency exchange and let trading battle commence.
The dumbest ways to TRY and get rich from cryptocurrencies — well, there’s a lot!
If you read ‘can cryptocurrency make you rich’ or ‘how to get rich from cryptocurrencies’ posts on the web, many of them will regale you with ways to get rich from cryptocurrencies. Let’s save ourselves some time and quickly dispel some of the worst ways.
Gone are the days of mining on home-based rigs. If you live next to a source of free electricity such as a hydro-electric dam, then this may work out for you.
Platforms such as Bituro, Latium and Bitcoin Rewards provide a space to complete tasks for cryptocurrency payments.
Plan to be old, grey and poor from expending energy on this method.
These websites or apps are known as bitcoin faucets and there are thousands of them online. The only catch is that the amount of bitcoins they give is very small, and it varies from circa 100 Satoshis (0.000001 BTC) to 10,000 Satoshis (0.0001 BTC).
Tasks include watching ads or filling out surveys. Plan to be even older, greyer and poorer from expending energy on this method.
Working for cryptocurrencies
This isn’t a bad idea at all and is a viable source of income. Many employers are happy to pay for work in cryptocurrency. If you work online or have a job that allows you to do so, this is a viable way to make an income with cryptocurrency.
Platforms that are specifically dedicated to cryptocurrency such as our very own crypto blog coinesper.com are also happy to pay writers who want to work in crypto as well!
People who have become rich from cryptocurrencies
It’s always an inspiration to see social proof when it comes to wondering if we can follow in the footsteps of others. Here are some people who make a killing from bitcoin and other cryptocurrencies.
When each Bitcoin was worth $12 in 2011, Erik Fineman borrowed $1000 from his grandmother. With the help of his brother, at just the age of 11, he invested in bitcoin. At the end of 2013, when the value of Bitcoin became $1200, he made a fortune!
By January 2015, Fineman had his own education company. He sold his education company and was given the choice of accepting $100,000 or 300 Bitcoins. He took the Bitcoins. Fineman also achieved his goal of becoming an 18-year-old millionaire and won’t be going to college. Eric answered the question ‘can cryptocurrencies make you a millionaire’ emphatically.
Charlie ran a lucrative computer-repair service with his friends in high school and, in college, he co-founded BitInstant, an e-commerce website that helped people convert dollars into bitcoin.
At one point, according to a report on Bitcoin.com, BitInstant accounted for almost 30 per cent of all bitcoin transactions and even received investment capital from investors like Roger Ver!
Can cryptocurrency make you a millionaire — wrapped up
That’s our guide to getting rich from cryptocurrencies. Fortunes can be made and lost when dealing with cryptocurrencies like in any other asset class. We’d recommend starting small on whatever you do. Test it out. Does it work for you? Are you making returns on energy expended? Cryptocurrency is a hugely exciting area of financial technology and making it work for you could open up doors to great opportunities. If you like our post, feel free to give it a share on your favourite social media channel below.