You’ve seen all the news reports about Bitcoin and how it is growing in popularity. You watched in awe as the value of a single Bitcoin soared to $20,000 at one point in 2017. After the crash of 2018 you swore that you would not miss the boat again and began to buy Bitcoin when the price dipped. Now the question that must be answered is, “Can Bitcoin make you rich?”
It all depends. Some people have become very wealthy by investing in Bitcoin. Others have lost their life savings. Which category that you end up in will depend on the manner in which you invest and the risks that you are willing to take. Can you become Bitcoin’s next millionaire? Let’s look at some examples of people who got rich from buying Bitcoin.
The Curious Mr. Smith – Bitcoin Millionaire
Forbes magazine published an article in 2017 about a Bitcoin millionaire known only as Mr. Smith. The anonymous investor wanted his real name and face hidden for obvious reasons. He was traveling the world on roughly $25 million in Bitcoin profits. In the case of Mr. Smith, at least, Bitcoin can indeed make you rich.
Smith first became interested in investing in Bitcoin in 2010. He saw the token jump in value from $0.008 to $0.08 in just five days. This was enough to cause Mr. Smith to take a closer interest in the token. It would be a few more months before he would make his first buy of Bitcoin. In October of 2010 Mr. Smith invested $3,000 in the new digital currency. He received about 20,000 Bitcoin for his investment.
Mr. Smith pretty much forgot about his tokens until 2013 when the value of a Bitcoin reached $800. He sold some of his holdings, and a few weeks later sold a few more. The anonymous Bitcoin millionaire said that he then quit his job and embarked upon an around the world trip. He has not looked back since.
The finest hotels in Hong Kong, Paris, France. 5-star hotels around the globe. Elegant meals and a girlfriend in London. The world was Mr. Smith’s oyster, and he has lived life to the fullest. But one has to wonder what happened to Mr. Smith after 2017 when the article was published? We all know what happened to Bitcoin in 2018? Was Mr. Smith caught in the crossfire of the cryptocurrency crash?
A Million Dollars Made and Lost With Bitcoin
Another good story is that of Peter McCormack. The London advertising agency executive decided to buy some Bitcoin in early 2017 when the token was trading at around $800. He bought seven or eight Bitcoin and a few other cryptocurrencies. Within a very short period of time his original investment of £5,000 turned into £23,000 and McCormack was hooked. As the spring of 2017 rolled around McCormack had a portfolio valued at $300,000 and it was growing.
Somewhere around the end of 2017 Peter McCormack became a Bitcoin millionaire. He gleefully awaited what could happen in 2018 and envisioned perhaps a worth of $1 Billion. What happened was a disaster. Shortly after the new year began the crypto markets began to tumble. When the dust settled almost all of the value that Peter McCormack had accumulated was gone. He was back to being just a regular ad executive.
McCormack told The Guardian that he kept deciding not to sell as the market fell. He just kept holding. Then he eventually sold much of his Bitcoin at a massive loss. Sadly, this type of story is not uncommon. There are plenty of people just like McCormack who became millionaires and then lost much of their money.
A Volatile Bitcoin Market
The cryptocurrency market is one of the most volatile trading environments in all of finance. Prices can rise and fall quickly, sometimes undergoing vast swings in a single day. There is really no way to predict exactly what will move the market, the way some are able to predict the stock market swings. All one can do is stay abreast of news and study technical indicators to make a good speculation.
Can Bitcoin make you rich? The stories we presented above would seem to say so. If we learn anything from these stories, though, it is that Bitcoin giveth and Bitcoin taketh away. While these individuals were smart to get involved in the market when they did, one and perhaps both of them stayed too long. The result was losing everything that was gained.
Bitcoin is a tricky asset to manage. Because it has no physical existence people are more willing to gamble with it in the hopes that they will continue to make money. In many cases this lack of respect for the coin’s value has caused losses to occur.
Are You the Next Person to Get Rich From Bitcoin?
Ask those people who are in tune with the cryptocurrency market and most will tell you that Bitcoin is primed to once again soar in value. There are some naysayers, too, but for the most part the sentiment seems to be positive. This means that you should be thinking about buying the coin now before it once again soars to the moon.
Those who have had the most success investing in Bitcoin are those who show a willingness to buy low and sell high. So it is with all successful investors. You need to have the savvy to know when to get in and when to get out.