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 $US20, 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 cryptocrash, and the Bitcoin dropped to low of about 5,000 euros, corresponding to just over $US6,000.
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 $US48,000
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 $US963, meaning a total investment of about $US47,938.
When the cryptocurrency peaked in price on December 17 and was worth about $US20,089, 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 $US47,938 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 $US400,000 of virtual value left as of February 9, 2018. Not bad, but a virtual loss of $US600,000 in less than two months.
Get the latest Bitcoin price here.>>
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