Are you thinking about investing into bitcoin? Perhaps you have heard about teens who invested early and became millionaires, or perhaps you have seen an advertisement with people flashing their Lambos and mansions. Well first I have to make a disclaimer and that is that I am not a financial expert or professional trader. Everything written here is based on my own research and personal experiences trading cryptocurrencies. That being said I do believe there is money to be made trading cryptos but I do not believe you can become a millionaire while investing a minimal amount of money. If you want to become a millionaire you would already have to start with a considerable amount of money.
How much money can you make?
Naturally you might be wondering how much money you can make. Unfortunately that question is not so simple to answer and that is because there are various factors that affect how much money you can make. If I told you I doubled the amount of money I originally invested you can’t assume that is what everyone is making. There are many factors that can affect how much you potentially make. Some factors are time, timing, amount invested, and cryptocurrency of choice.
Time is a factor because how long you invest will affect your profits. Do you want to become a day trader or a long-term investor?
Timing is different from time because it has to do with when you start investing rather than how long you invest. If you started in January the amount of money you make will be different than if you started in July and that is because, as you might already know the price of cryptocurrencies fluctuates wildly.
Initial Amount Invested
The amount you initially invest is also a factor because someone who starts with 10 dollars will have different gains than someone who originally invested 1000 dollars.
Currency of Choice
And finally the cryptocurrency of choice will also affect the amount of money you earn because Bitcoin will rise and fall at a different rate than Litecoin for example. So as you can see these factors make it difficult to say with certainty how much you can make.
My Experience with Cryptocurrency
Because it is quite difficult to say how much you can make with cryptos, I will instead tell you how much I have made on my trades and that should maybe give you an idea how much you can potentially make. On November 2017 I made my first purchase of crytocurrency. I bought about $20 worth of Ethereum (ETH), from November to January the following year the price of ETH tripled. Then I took the $60 I made and added about $50 to that and invested in smaller no name coins. At that time I tried my hand at day trading. I would buy and sell as quickly as possible in order to make as many trades as possible in a day but usually this resulted in minuscule profits. Usually I would gain less than 1%, if I was lucky I would gain 3% and on very rare occasions I would gain up to 30% profit.
As soon as I sold I would jump to a different currency and each trade lasted about 4 hours or so. I did this for about 3 months nearly every day. Eventually I made a mistake in investing in a cryptocurrency where the head of the currency announced he was looking for someone to replace him. I didn’t know it at the time but I watched in surprise as the price of the currency (I don’t remember the name of the currency) plummeted. I decided that the price was falling too fast for my liking so I decided to jump ship. I attempted to sell my currency but no one was buying and as the price kept falling I kept attempting to match the price. Eventually I decided that I would just ride out the wave and wait until the price came back up however long that would take. The price never came back up even after that cryptocurrency got a new head and rebranded itself.
I lost over $100 dollars on that trade alone. In november 2018 I decided to try again with $100 dollars worth of ETH the price went up and I made over a 50% profit. It is now January of 2019 Ethereum has hard forked, Bitcoin might go as low as $1260 and no one knows where cryptocurrency is headed.
Should you invest in crypcurrency?
I believe you should invest if:
- You are willing to learn how to read charts and understand algorithms
- Have money that you are comfortable potentially losing
- Are able to keep a “cool head” (i.e not panic selling)
- Don’t expect to become rich overnight
If you would like to learn how to get started trading cryptocurrency check out my other article “Crypto Tips for Beginners“. There I talk about the lessons I learned while trading crypto along with some resources that helped me learn how to trade.