How Many Bitcoins Do You Need To Be A Millionaire

No thing what blazon of investor y’all are,
Bitcoin

(BTC
-1.10%
)

has probably caught your attention, thanks to its rapid ascent to over $60,000 a coin in just a few years. It’south natural to wonder if you should add together information technology to your portfolio, especially equally some optimistic investors claim its value could one 24-hour interval exceed $100,000 per money.

Merely if you’re hoping to become a Bitcoin millionaire, you lot can’t put your cart before your horse. Two things need to happen earlier you can brand a fortune off Bitcoin or any other cryptocurrency.

Serious person staring at laptop and writing note.

Image source: Getty Images.

1. You have to invest in Bitcoin

Allow’southward start with the obvious: You’re never going to brand any money off of Bitcoin if you don’t own any tokens. If yous’re merely interested in purchasing a small amount of Bitcoin, that’s not also difficult to do. Most cryptocurrency exchanges enable you to purchase partial coins, so you don’t need thousands of dollars to get started. And you can yet make a handsome little profit, even if yous don’t ain a whole coin.

Let’south say you invest $5,000 in Bitcoin right now. At the fourth dimension of writing, that would purchase you about 0.13 of a Bitcoin. If Bitcoin makes it back to $threescore,000 a money and you sell it, you lot’d pocket about $ii,800 in profits. That’s slap-up, simply it’due south not going to make yous a millionaire.

A single Bitcoin is trading for just under $39,000 while I write this. Even if y’all had a whole coin, you’d just make about $61,000 should Bitcoin make information technology to $100,000 a coin. You’d need to buy over 16 Bitcoins in order to make a $ane million profit if Bitcoin hits $100,000, and that means cough up over $620,000 right at present. That’southward not an easy feat for a lot of people.

You may exist able to make a million-dollar profit with less Bitcoin if information technology ends upward worth more than $100,000 a coin, but now nosotros’re running into our second problem.

2. More companies accept to adopt Bitcoin

Bitcoin’due south current value is largely driven by speculation. Few companies currently allow customers to pay for products with Bitcoin or whatever other cryptocurrency, so its applied value is limited. That could change if cryptocurrency sees more than widespread adoption over the coming years, just in that location’s no way to know if that will really happen.

In that location are some legitimate concerns about widespread cryptocurrency adoption, including:

  • Account access and security:
    People have already lost millions of dollars because they’ve lost access to their crypto wallets and all the coins they contain. Hackers take also stolen billions of dollars worth of crypto tokens from cryptocurrency exchanges.
  • Illegal activities:
    The untraceable nature of cryptocurrency transactions makes them an ideal payment method for criminals, and it can be more hard for governments to figure out where that coin is going.
  • Ecology effects:
    Bitcoin mining requires massive amounts of free energy. A single Bitcoin transaction has the same carbon footprint as 123,963 hours of watching YouTube, co-ordinate to Digiconomist, and the amount of electricity it uses could power a U.Southward. household for nearly 54 days. That problem would only get worse if Bitcoin saw more widespread use.
  • Government oversight:
    Federal governments have largely been sitting back and observing the crypto craze so far, only that probably won’t last forever. Governments could outright ban cryptos, like India is considering, or they could attempt to regulate the crypto market place.

These are some pregnant hurdles to overcome, and if Bitcoin isn’t able to do it, all those coins people are currently buying for $39,000 a pop could become worthless. It’s not impossible that Bitcoin could anytime be worth $100,000 or more, simply it’s far from a sure bet.

Is investing in Bitcoin correct for you?

If all this is making y’all a lilliputian leery of investing in Bitcoin, that’s OK. Information technology’s non for anybody. If yous have some extra cash and you’d similar to invest a little money in the cryptocurrency just to meet what happens, that’s fine. Simply if you’re not willing to have that take chances, in that location are other, safer paths to millionaire status.

You could invest in cryptocurrency stocks rather than cryptocurrencies themselves. These are stocks in companies that stand up to do good if cryptocurrencies become more widely accustomed. But they’re also strong companies in their own right, so they have the potential to make you lot money even if Bitcoin never takes off.

Or you lot could opt for an index fund instead. These instantly give you buying in hundreds of stocks at once, so you tin diversify your portfolio without spending a fortune. There are many index funds out in that location, but some of the most popular are the
S&P 500 index
funds. These contain stocks in all 500 companies in the S&P 500, and they tend to generate returns very similar to the index itself.

No one knows what the futurity holds for Bitcoin. But fifty-fifty if it does alive upwardly to people’s wildest expectations, you lot don’t want all your eggs in one basket. Cryptocurrency prices fluctuate wildly, and that’due south problematic if you need to sell your coins at a certain time. It’s best to spread your money around between several of the investments discussed higher up to requite yourself the best chance of condign — and staying — rich.

Kailey Hagen owns shares of Bitcoin. The Motley Fool owns shares of and recommends Bitcoin. The Motley Fool has a disclosure policy.

Source: https://www.fool.com/investing/2021/06/26/aspiring-bitcoin-millionaire-2-things-must-happen/

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