Can you get rich from cryptocurrency?

by | Aug 4, 2022 | Crypto | 0 comments

One hears many stories about people who turned small amounts into huge sums through cryptocurrency. And that too in a short time! Also, there’s news about crypto millionaires who began with a small investment and ended up with a large bank balance.

So, after hearing such big fat stories, it does seem that it’s time to buy cryptocurrency. Big price rises in virtual currencies often make one wonder if getting rich through investment is possible. Here’s the truth unfolded. Keep reading.

What’s with crypto investment? The truth you should know

Getting lucky with crypto investment can bring home a lot of fortune. That can happen even if the investment is small or even if it’s not been very long. So, that’s the gold of crypto everyone gets attracted to.

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But, how is it possible with cryptocurrencies, after all? One major reason is crypto is very volatile. It may happen that a specific coin would capture the attention of the perfect celebrity. Or the coin could become a social media sensation. So, in that case, the prices of that cryptocurrency will rise dramatically and quickly!

It is more likely that cryptocurrency investors will notice unjustified or rapid price rises. It is in comparison to other assets that may demand investors who stay cautious. But why so?

Here’s the reason. When you buy crypto with a credit card, the prices are often speculative. Virtual coins are a less time-tested and newer asset class. They even appeal to investors willing to take higher risks.

Sounds all good? Time to bear the twist. When it comes to cryptocurrencies, two factors matter the most. “Picking the correct coin and buying at the right time.” So, even if one of these isn’t right, it can all come crashing down.

And that, considering the trends, is often difficult. Of course, some factors drive up the price of a cryptocurrency. But all of these are very unpredictable.

Note that people do not always purchase cryptocurrency because of its technology. Nor is it necessarily because of their adoption as a real-world currency among merchants. But, they do so to earn more!

How to get rich through investing in crypto?

There’s something known as the ‘time-tested approach.’ If one hopes to make a profit through cryptocurrency, follow it. So, what’s it about?

Buy assets (regularly) with proven track records. An example could be an S&P 500 index fund. It tracks the performance of the biggest US companies, in the numbers of more than 500.

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If some cryptocurrencies seem to have growth potential, one may include them in the portfolio. On the other hand, one may want these currencies to become a part of a diversified portfolio.

Also, that would hugely increase the chances of earning generous returns. It would even decrease the risk that any outsized losses may have caused.

The next important point is to research virtual currencies carefully. Before you purchase cryptocurrency, ensure that they offer the right reasons. Further, one should be comfortable holding them for a long period.

The main purpose of investing in crypto is to maximize the chance that it pays. In the long haul, buying these virtual currencies should help build wealth.

Tips for a smart investment in cryptocurrency

Take advantage of airdrops and forks

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Airdrops and forks may not make someone rich overnight, but they are worth it. They are great when it comes to accumulating excess cryptocurrency. Further, that can help one build long-term assets.

Be sure to understand the risks

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Crypto investment is a speculative venture. It is regardless of the risk minimization steps. Also, some billionaires, including Warren Buffett, find no utility in cryptocurrency. Others think that when you buy crypto with a credit card, the asset class will crash to a zero valuation.

Become a crypto miner

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Willing to skyrocket earnings through crypto? One way is to become a miner than direct market speculation. Also, by validating blockchain transactions, crypto miners are rewarded with coins.

Day Trade

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Consider day trading to get rich through cryptocurrency. It is the highest reward/risk option. Also, note that the volatility of cryptocurrency makes one earn significant sums. However, you may also likely lose a huge sum of the investment. So, that’s both the ways.

Conclusion

Digital assets have many advantages over convert cryptocurrencies (fiat). Buying these coins can make someone super-rich in a day, thanks to the high volatility. On the downside, one should be a risk-taker when investing in crypto. The value of the bought coins could crash down to nothing.

So, in a nutshell, getting rich through crypto is possible. With ample luck and some right strategies, people do become millionaires. But goes without saying, crypto isn’t all gold. Be cautious.

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