- Cryptocurrency is subject to extreme price fluctuation.
- Some people were made millionaires in only a year after purchasing Bitcoin in early 2017.
- To have a million dollars’ worth of Bitcoin at the end of 2017, you would have had to invest about $48,000 early in the year.
- This type of investment is not advisable for people who can’t afford to lose that cash completely.
Speculating with cryptocurrency leads to such extreme fluctuations in price that it resembles gambling in a casino.
Some early adopters of the bitcoin, who bought the cryptocurrency about five years ago for about $20, have become millionaires. But those who ventured a gamble in 2017, the year of crypto-hype, had to take on much more risk.
Six years ago, at the age of 12, 19-year-old bitcoin billionaire Erik Finman received a 1,000-euro check from his grandmother and put in right into bitcoin. At the time, a bitcoin was worth about 10 euros. Since then, the cryptocurrency rose to over 17,000 euros in December 2017. Finman thus became a multi-millionaire.
However, the start of 2018 showed a real crypto-crash, and the bitcoin dropped to low of about 5,000 euros, corresponding to just over $6,000.
In January, Finman told Business Insider Deutschland: “If you are smart about cryptocurrency over the next 10 years, you can make a fortune. The area is still relatively small; the market capitalization is just over half a trillion dollars. I do not want to be misunderstood: This is, of course, a very high amount, but in comparison to other asset classes, it’s small. Therefore, I say if you do not become a millionaire in the next 10 years, then it’s your own fault.”
That is easy to say, of course, but it is certainly no longer so easy to become a millionaire through bitcoin speculation. At least, not in a short time.
What it would have taken to become a bitcoin millionaire: about $48,000
Let’s start with a simple question: How much money would you have needed to invest in early 2017 to earn a million dollars worth of bitcoin in that same year?
The answer is that on January 1, 2017, you would have had to buy 49.78 bitcoin at the then-price of $963, meaning a total investment of about $47,938.
When the cryptocurrency peaked in price on December 17 and was worth about $20,089, the 49.78 bitcoin investment would have been worth a million dollars.
Please note: Since investing in cryptocurrency with money you need as a savings buffer is not advisable, the majority of the population is actually excluded by the above calculation. Only people who see $47,938 as ‘pocket change’ can afford to take such a risk.
But this story continues. If you, as a bitcoin-millionaire in December 2017, had not immediately sold your coins, you would have just over $400,000 of virtual value left as of February 9, 2018. Not bad, but a virtual loss of $600,000 in less than two months.
Get the latest Bitcoin price here.>>
Read the original article on Business Insider Nederland. Copyright 2018. Follow Business Insider Nederland on Twitter.