Are Crypto Millionaires At Risk of Losing Their Wealth?Posted by Michael Cao on December 13th, 2019 Investing in digital currencies is like investing in the stock market in one way. In both asset classes, you make an educated guess that the price will go up. You make a profit when that happens. The crucial part is timing – know when to buy.
The new crypto millionaires weren’t shy at all. They flaunted about their success on social media which enticed others to jump on the wagon. The term “Lambo”, short for Lamborghini, referred to someone who was getting rich from crypto. The thought is that they have so much money that they are going to buy a sports car. People invested in crypto for “FOMO”, an acronym for fear of missing out, in the next price increase. Speaking of price increase, the term used to describe a major positive price movement is “Moon”. For example, “FOMO because Bitcoin is mooning.”. In 2017, Bitcoin rose from 0 to over ,000. Crypto investors who bought Bitcoin at much lower prices sold their coins when the price mooned. That was two years ago and the price of Bitcoin has gone down. Those who read the cryptocurrency market correctly made money and those who did not lose. I’ve heard of people who bought Bitcoins during its high in December 2017. They were devastated when the price of Bitcoin fell sharply. Cryptocurrencies are volatile but they remain attractive investment vehicles. The Changing Fortunes of Crypto’s Richest Cryptocurrency made such an impact that Forbes compiled Crypto’s richest list in 2018. According to Forbes, the average age of cryptocurrency’s richest people was 42. You have to be worth at least 0 million to make it to the Forbes’ list of cryptocurrency’s wealthiest people. You can be sure that those on the Forbes list lost money too when the value of cryptocurrency plummeted. So far only Coinbase’s CEO, Brian Armstrong is on track to make it to Forbes 2019 list. Not everyone lost it all when the market crashed. For instance, Brock Pierce had previously told Forbes in 2018 that he plans to donate his billion-dollar crypto fortune. He did not appear on the list in either 2018 or 2019. Other notables like, Binance’s Changpeng Zhao, and crypto investor Matthew Mellon and Ethereum’s Anthony Di Iorio were all previously identified by Forbes as billionaires. They are further down the list now, but not out. Despite 2018 being a challenging year for investors, many of the proponents of cryptocurrency looked at the sharp price drop as a correction. But let’s step back and look at what cryptocurrency has achieved in ten years. Companies are adopting Blockchain, the underlying technology of cryptocurrency. Cryptocurrencies are becoming a popular medium of payment. Government and Institutional regulations are clamping down on fraud. Even countries and major corporations are thinking of launching their digital coins. Disruptive technologies like cryptocurrencies have their ups and downs. The Investors of Bitcoin It is difficult to pinpoint who owns the most Bitcoin. The wealth of traditional investors can be measured in dollars. Generally, individuals who own cryptocurrency are quiet about how much they own unless they voluntarily disclose their assets. The value of cryptocurrency fluctuates daily. However, crypto millionaires will have to disclose their assets to buy a property or pay taxes. You can go to BitInfoCharts to look at the top hundred addresses, who own Bitcoin, Ethereum and Litecoin. We can divide the crypto millionaires into three categories:
In whatever category a crypto millionaire falls, it is safe to say that they have seen the good and the bad times of cryptocurrency. Success can make you heady and careless, witnessing the market fall has a sobering effect. Most of the crypto millionaires say that 2018 was a wake-up call. A valuable lesson they learned is that a successful investment means choosing the right digital coin at the right time. Cryptocurrency supporters estimate that the market capitalization of cryptocurrencies could rise to -10 trillion in the next five years. On the hand, cryptocurrency prices are not expected to reclaim their 2017 highs. Investing in cryptocurrency nowadays will require patience. Getting a good return on investment can be longer than expected especially you buy into today’s prices. It’s been observed that a big portion of the largest Bitcoin addresses has remained dormant for years. Long-term investors and early adopters probably own the addresses. The Millionaires Will Get Richer The bursting of the speculative bubble is a good thing. The cryptocurrency community is focused on creating long term projects that will impact society as a whole. Blockchain-based companies may become new favorites for investors. When the cryptocurrency market crashed, blockchain did crash with it. An industry that is ripe for blockchain is online gaming. Cryptocurrency and blockchain is a step up. The rising popularity of e-sports makes it great for new blockchain capabilities. Sony plans to release a blockchain-based video game on its popular PlayStation 4. Epic Games, who created Fortnite, is looking at ways to incorporate blockchain. Industries from finance and energy are researching new ways to deploy blockchain technology. Another growth area is retail. Startups like OpenBazaar are developing blockchains to connect buyers and sellers, minus the middleman. Customers can use 50 cryptocurrencies and sellers are paid in Bitcoin. Fortunes were made during the bubble days of cryptocurrency. But they are more opportunities than ever before. The crypto millionaires are working with or investing in blockchain. They’ve made their money. Now it is time to put them into good use. Source:https://michaelcao.net/are-crypto-millionaires-at-risk-of-losing-their-wealth/ Like it? Share it! More by this author |