The title already seems to be quite comprehensive, although this catchy phrase has a lot of underlying content in it. The fact that your $100 could eventually turn into $80 million seems to be against all the rules of economics. “How can this possibly occur?”, “Did it happen to someone?” and the key question “Can you do that again?”. You’ll get the answers to this questions in the following article. If you’re willing to, then lay back and enjoy.
How is that possible?
If you’re new to Bitcoin it is hard to imagine how the exchange rate of a currency can increase more than 800 thousand times in 7 years. Yes, that’s right. The lowest Bitcoin price in 2010 was $0,003 and now it’s about $2600.
The thing is that Bitcoin price is not set by a person, community, company or government. It is an automatically operated process. In lay terms, Bitcoin’s underlying technology is a blockchain. It is a decentralized (no central server) program, distributed among all users. It offers the possibility to conduct transactions and also reward miners (give Bitcoins to those who “validate” transactions). The price is defined by the demand of coins among people and the cost of mining them.
In this way, the title is absolutely true. If you’d choose the right time to buy Bitcoins in 2010 and sell them in 2017 – 80 million dollars is a realistic sum. What’s funny about it is that you can get about 5-10 million dollars more or less, all because of fluctuations in the exchange rate, which is a normal thing for Bitcoin. It blows your mind when you understand that the numbers are so big, you won’t even feel the loss of couple million dollars!
Did it work for someone?
Yes it worked. Of course not at the same scale, but it did:
- The $27 Bitcoin investment in 2009 gave one Norwegian man an opportunity to buy an apartment, by using only one fifth of his money four years later. There is no information as for the fate of his remaining Bitcoins. But if he saved at least one fifth of them until now, not only he can afford another apartment, but he is a millionaire in fact.
- The internet is overwhelmed with a fabulous story that occurred seven years ago. Man bought two pizzas for 10 000 BTC, which is by now almost 30 million dollars. It should have been very tasty, because it is definitely the most expensive pizza ever. No, “the most precious” sounds even better.
- There is also quite a dramatic story about a guy who bought 1400 BTC for $25. At the time it was next to nothing, so he forgot about them and threw away the hard drive that kept all the coins. Now the three and a half million dollars are lost somewhere in the dump. And the guy is like: “I could have gone around the world or bought a yacht”. In fact that’s what he really said about the situation. Note: There is no way someone can restore your lost Bitcoin, just like no one can give back you a lost gold bar.
What if I invest $100 in Bitcoin now?
Well… You can always do that using bitcoin exchanges. However, it is hard to say if you get the same profit in 7 years. In this case, 1 BTC must have been worth more than 2 billion dollars. There is a good chance that the price will continue to increase, but no one can guarantee that it will go that much high.
It is important to note that people who invested in Bitcoin, when it had just emerged, were risking as well. Because no one knew what was it. No one knew the consequences it could bring. Only after years, we realize it was worth it. There is no easy money. In order to gain profits investing in Bitcoin now, you should really work up a sweat. Seven years ago it was a pitifully small amount of money, but a huge risk.
Is there any way to succeed now?
There always is. But times have changed, so on the one hand it is much harder due to the intensified difficulty level of mining and the increased demand, while on the other hand people have gained more experience in the industry. So now you can find more options to raise money. Buying Bitcoins and just waiting they will worth more within time is not the panacea nowadays. There are plenty of other options, here are a couple of them:
- Margin trading is a method of trading Bitcoins. If you study up it enough you will be able to raise your funds no matter if the rate is increasing or dropping. Given the key feature that includes borrowing funds, you have the possibility to trade more money than you really have. Which means that your profits will be much greater.
Take CEX.io, for instance. They offer trading with a risk-preventing system and the highest possible leverage of 1:3. Opening a position with 1:3 leverage means your initial deposit becomes three times larger and so do the potential gains. As of today, CEX.io allows traders to benefit from margin trading on BTC/USD, BTC/EUR, ETH/BTC and ETH/USD with a collateral currency at their own option.
- Bitcoin arbitrage is income-bearing in the times when the exchange rate is leaping. The main idea is to buy Bitcoins at exchange A (where the prices are lower) and sell them at exchange B (where the prices are higher). The difference is your profit. It can sound impractical, but it isn’t. It’s all because of Bitcoin volatility.
Is it worth investing in Altcoins?
Altcoin is any different from Bitcoin cryptocurrency. For now there are hundreds of them. Bitcoin mining is becoming more and more expensive, so in some way there is a sense investing in certain Altcoins. But you should be very accurate choosing one. Ethereum is considered one of the most promising Altcoins. In spring 2017 its exchange rate has leaped from $30 up to almost $400. Of course this is not the primary indicator, but it shows how the demand for this currency has suddenly grown.
Eight years have passed after the origin of the first ever cryptocurrency. Since that time, much has changed. Now cryptocurrency is not a doubtful concept, it is a whole new and a far-reaching industry where billions of dollars are moving around. The one thing each of us must consider is that there is no way to make a quick dollar. But we have the possibility to take advantage of the new and unique crypto sphere. Combined with effort, great enthusiasm and risk appetite it can bring a lot of profits to anyone.