How to Become a Bitcoin Millionaire
Learn how much you have to invest in bitcoin to become a millionaire. SPOILER: It's less than you think!
I know, I know…what a click bait-y title.
But, I WILL explain to you how you can become a bitcoin millionaire.
And, no. This is not one of those “If you would have bought $1,000 of bitcoin a few years back, you would now be a gazzzillionare” pieces.
Instead, I will show you how much you would have to invest in bitcoin on a regular basis to (potentially) become a millionaire.
There’s a catch though.
The following calculations are based on historic returns (that’s standard in financial modeling) and past returns do not guarantee future performance.
But, with the following investment approach, you could become a millionaire by investing in bitcoin provided the digital currency continues to generate roughly the same performance as it has in the past few years.
So, let’s look at the maths.
Becoming a Bitcoin Millionaire: The Quick Maths
There are essentially two ways to become a bitcoin millionaire:
Make one big lump sum investment and wait
Invest smaller amounts regularly and wait
If you have an easy cheesy $100,000 lying around and want to put it into bitcoin, you need to wait for the price of bitcoin to increase tenfold, and voila, you are a bitcoin millionaire.
However, most of you reading this don’t just have a $100,000 lying around at home that you can put into “magic internet money.”
So, let’s explore the second option.
To become a bitcoin millionaire without investing a substantial one-off sum, you would have to invest smaller amounts regularly over several years. This investment strategy is called dollar-cost averaging.
Dollar-cost averaging involves buying a fixed dollar amount of an asset at regular intervals to “smooth out” market volatility and build a large position in the asset over time.
For example, you could invest $100 into an S&P500 Tracker ETF each week to grow an investment portfolio containing US large-cap stocks.
You can do the same with bitcoin.
So, how much would you need to invest in bitcoin (BTC) to become a bitcoin millionaire?
According to data compiled by DCAbtc.com, you would need to invest $300 in bitcoin each week over the course of 5 years to become a dollar millionaire in bitcoin (provided bitcoin performs the same way it did in the last five years).
Let’s unpack that.
DCAbtc.com’s data looks at bitcoin’s returns in the past five years (which includes two bull markets and a long bear market) and calculates the value of a bitcoin portfolio to which an investor adds $300 worth of BTC every week.
The total dollar amount invested over the five years is only $78,300, while the asset appreciation had turned the invested $78,300 into $1,050,000 in the five-year investment period.
So, what that tells us is that if you invest $300 in bitcoin every week for five years, you could become a bitcoin millionaire if bitcoin has a similar (1,241%+) price performance as in the past five years.
And there you go. It’s as simple as that.
That is (more or less) how much you would have to invest in bitcoin to potentially amass a bitcoin holding worth a million dollars.
But will bitcoin generate the same returns in the next 5 years?
I mean, it could. But I don’t expect it to.
That again, nobody really knows.
What I would like you to take away from this week’s issue of A Little Bit of Anarchy is that investing a small amount in bitcoin (or any other investment asset you believe in) at regular intervals is a great way to build your investment portfolio/savings pot over time.
It may even make you a millionaire (in five to ten years).
Love, peace & anarchy,
Disclaimer: Nothing found in this newsletter constitutes investment advice. Let me say that again: this is not investment advice. The content found in “A Little Bit of Anarchy” is for informational, educational, and entertainment purposes only.