You might have heard of bitcoin, but do you know what it is? The digital currency gained enormous popularity in 2017, rising from $2,500 to nearly $20,000 per bitcoin in December. But the journey hasn’t been smooth sailing – it’s been dotted with ups and downs over the years, including an outright crash just last year. That’s exactly what happened to me in early 2018 when I became a bitcoin millionaire before losing it all by mid-summer.
How and why did it happen?
Bitcoins, an independent digital currency, are an ideal way to diversify an investment portfolio and take on more risk. I bought bitcoins under $3 per bitcoin (approximately 700), only to see them skyrocket above $19,000 in December 2017. From November to January 2018, my investment grew from about $700 worth of bitcoins to around $350,000. That’s right: I became a bitcoin millionaire without doing anything but investing what I could afford to lose into this new idea.
Why doesn’t everyone become a bitcoin millionaire?
When bitcoin started trading, one coin went for $100. Since then, it’s gone through an amazing roller coaster ride in value. The currency is worth over $10,000 now and is attracting investors by the thousands. There’s even an old cliche about becoming rich off of bitcoin: If you bought $100 worth of bitcoins in 2011 and sold them today, you would have had more than $70 million. But just how easy is it to become a bitcoin millionaire? The answer is that not everyone can take advantage of this opportunity as they might think.
What could be next for Bitcoin?
One bitcoin would buy you a nice flat in London at its highest point. Bitcoin millionaires were born and quickly lost their fortunes when they made bad trades or sold them at the wrong time. It is now struggling to bounce back after reaching as low as $12,500 this week. And experts warn that it could fall even further. It’s unclear what will happen next for Bitcoin, but most traders expect this volatile digital currency to eventually undergo some form of recovery.
Although Bitcoin is now essentially synonymous with cryptocurrencies, there are many more coin options available. There are a few others that are worthwhile taking into account whether you’re considering investing in cryptocurrency or are already doing so. Let’s examine eight cryptocurrencies that are good substitutes for Bitcoin.
But first, a warning: cryptocurrencies are incredibly volatile and are not suggested as an alternative to conventional investment types like equities and bonds. But before we discuss the greatest cryptocurrencies, let’s first take a look at the current state of the cryptocurrency market if you do have the appetite for this type of high-risk investment.
Is this the end of cryptocurrencies?
Now trading at around $5,300, Bitcoin was just over $20,000 in December. But this past week, bitcoin and other cryptocurrencies have been crashing. The craze is dying, and some bitcoin millionaires are losing it all. Why? Two reasons: they don’t understand economics or think bitcoin is a fad and will only go up from here. I used to be a bitcoin millionaire too, and then I saw how wrong I was about my predictions on how much cryptocurrency would trade for in 10 years and saw that this idea wasn’t as powerful as everyone thought.
Advice for crypto investors
Although the Bitcoin market has crashed in recent weeks, a few Bitcoin millionaires are still out there. However, if you’re thinking about investing in Bitcoin or any other cryptocurrency, then it’s wise to have a plan for when things go south. For example, one way to prepare for crashes is to sell some of your Bitcoin and invest in something else before prices plummet.
By spreading your assets around and having various assets that do well during different economic cycles (such as gold), you’ll be less likely to panic during periods of uncertainty. Be sure not to overextend yourself; this strategy only works if you keep adding capital at steady intervals rather than large lump sums at one time.
Just three weeks ago, I was sitting on 1,284 bitcoin. For those unfamiliar with cryptocurrency, that’s worth over $1 million at today’s exchange rate.
Then bitcoin crashed. A little less than two weeks later, my pile of cash turned into barely enough to pay for my rent in New York City for one year. I didn’t even have time to respond since everything occurred so quickly.
Just days before I became what many are calling a bitcoin millionaire, just over one week ago, people in Manhattan were holding up cardboard signs by Union Square asking for help as bitcoin hovered around $10,000 and despair set in for those who had invested their life savings with no return on investment since 2013 when the cryptocurrency went mainstream.