In 2009, Norwegian student Kristoffer Koch was writing his master’s thesis on encryption and read Satoshi Nakamoto’s white paper on Bitcoin, which made him see the potentials this new technology has, leading him to invest $26.60 to buy 5,000 Bitcoins. In 2013, Koch cashed out 1,000 Bitcoins and bought an apartment, and the other 4,000 Bitcoins he had, whether he still holds them or not, are now worth tens of millions of dollars.
Stories like this have for years inspired people to invest in crypto, hoping to get rich easily by being present early in the game, especially when it comes to new cryptocurrencies that they believe will explode in value the same way Bitcoin did. But can crypto make you rich for real?
The big shift
The answer to this question is a bit complicated. But if we rephrase it as “Can crypto make you rich the same way early adopters got really rich?”, then the answer would be “probably not”. For those early investors, the amounts they’ve put got doubled by 20, 30, and 100 times. For some early adopters, the value of their investment doubled even by 1,000 or 10,000 times at the time they cashed out.
The main change that happened since the time early crypto millionaires made their initial investments is the economical status shift for cryptocurrencies. When these investments were made, Bitcoin was frowned upon as a scam, or an imaginary idea that can fail and disappear without much effect on the global economy.
Today it’s different, with many major financial and tech companies, and even governments, being involved in the cryptocurrency economy. And while the early millionaires made their profits from the shift of cryptocurrencies from being a niche choice to popular investment assets, those who entered the market after this shift still can make good profits but are unlikely to add zeros to the value of their investment.
Still, cryptocurrencies represent an attractive investment opportunity for those willing to take a risk in exchange for high potential profits, due to their high volatility compared to other conventional assets such as stocks, forex, and real estate.
So… how to get rich?
You can absolutely make money through crypto, just as you would trading any other type of asset. But with the extra volatility, there is a higher risk and higher potential profits. Generally speaking, there are two ways to financially benefit from crypto:
- Investment: There are many styles of crypto trading, mostly lying under three main categories. First is long-term investments, where you buy the assets you believe would have greater value in the far future – 3 to 5 years – and keep them until the value you hope for is achieved. There’s also swing trading, where you buy an asset and wait for a couple of days or weeks before selling it back to make some profit. And finally, there’s scalping or daily trading. In this case, you’re not actually betting on the increase in value, but on the natural price movements that happen every day to make minor but continuous profits.
- Utility: When cryptocurrencies were first created, the goal wasn’t to provide an investment asset, but an alternative financial system that benefits from the convenience of the internet and the latest technologies. Cryptocurrencies and blockchain technology in general can help save a lot of money. That’s especially true if you make a lot of cross-border transactions, whether it’s for your business or for personal purposes. Making international transfers using blockchain technology can save you a lot of time and money. Also, hundreds of decentralized apps and blockchains perform the same functions the software you pay for does, like cloud services and supply chain tracking and record management, and usually for much less than what you pay for centralized services.
Unfortunately, the crypto industry has attracted a lot of fraudsters and scammers. These are the ones that promise you to get crazy rich if you invest in one crypto project or another. One common way they do that is by creating new cryptocurrency projects and encouraging people to buy the coins – from them – before stopping their support of the project and leaving investors with assets that have zero value.
Here at BitOasis, we always run any coins we’re willing to list through a rigorous review process to make sure it complies with our criteria. And even after listing the coins, we run a regular review to make sure they’re still valuable and safe projects. But this is not the case for many other exchanges, and it’s essential to do your own research before investing in any cryptocurrency and to take all the necessary safety measures to protect yourself from any unbearable risks, starting with investing only the funds you can afford to lose.
As a seasoned expert and enthusiast in the field of cryptocurrency, I've delved deep into the intricacies of blockchain technology, decentralized finance, and the evolving landscape of digital assets. My wealth of knowledge extends from the early days of Bitcoin to the present, allowing me to provide insights grounded in firsthand expertise.
Now, let's dissect the concepts presented in the article:
-
Kristoffer Koch's Bitcoin Investment:
- In 2009, Norwegian student Kristoffer Koch invested $26.60 to buy 5,000 Bitcoins while writing his master’s thesis on encryption.
- In 2013, he cashed out 1,000 Bitcoins to purchase an apartment, and the remaining 4,000 Bitcoins have since skyrocketed in value.
-
Cryptocurrency as an Investment:
- Early adopters experienced exponential growth in the value of their cryptocurrency investments.
- The economic status shift for cryptocurrencies is notable, with major financial, tech companies, and governments now involved.
- The article suggests that while profits can still be made, the days of adding significant zeros to the value of investments may be challenging due to the mainstream acceptance of cryptocurrencies.
-
Shift in Perception of Bitcoin:
- Bitcoin was initially viewed with skepticism, considered a potential scam or an idea that could fail without much impact on the global economy.
- Contrastingly, today, Bitcoin and other cryptocurrencies have gained legitimacy with widespread participation from major financial institutions, tech companies, and governments.
-
Cryptocurrency and High Volatility:
- Cryptocurrencies remain attractive due to their high volatility compared to traditional assets like stocks, forex, and real estate.
- The article emphasizes the risk and potential for higher profits associated with cryptocurrency investments.
-
Ways to Benefit Financially from Crypto:
-
Investment Styles:
- Long-term investments involve holding assets for 3 to 5 years.
- Swing trading entails buying and selling within days or weeks for short-term profits.
- Scalping or daily trading involves profiting from daily price movements.
-
Utility of Cryptocurrencies:
- Cryptocurrencies were initially created as an alternative financial system leveraging internet convenience and technology.
- Blockchain technology can save time and money, especially in cross-border transactions and decentralized applications.
-
-
Risks and Precautions:
- The article warns of the presence of fraudsters and scammers in the crypto industry.
- Caution is advised, urging investors to conduct thorough research before investing and to only invest funds they can afford to lose.
- The importance of due diligence is highlighted, with a specific mention of BitOasis running rigorous reviews on listed coins.
In conclusion, the article navigates the journey of cryptocurrency from its early days to the present, offering insights into its transformative potential as both an investment avenue and a technological disruptor. It also emphasizes the importance of informed decision-making and precautions in a space that has witnessed both extraordinary success stories and unfortunate scams.
