Is it still possible to become a millionaire with crypto? | The Motley Fool

Over the past two years, the cryptocurrency has been famous for its sky-high returns.

Ethereum (ETH -5.52%)for example, has seen its price soar nearly 800% in the past three years. Solana (FLOOR -5.92%) is up more than 3,600% since its inception, and shiba inus (SHIB -6.55%) has soared 23,600,000% since its lowest point in 2020.

It’s often tempting to think about how much you could have earned if you had invested early. But crypto prices have fallen since late last year, and many investors may be wondering if it’s worth investing.

Is it still possible to make big money – and potentially reach millionaire status – with crypto? It depends on your strategy.

Why Crypto Could Still Be Lucrative

The most important thing to remember when investing in cryptocurrency is that it is a long-term strategy. While it’s possible to make a lot of money in a relatively short time, that shouldn’t be the goal.

Volatility is extremely common in the crypto industry, and sometimes these downturns are severe. If you are aiming to become a millionaire overnight, this volatility will make things extremely difficult. However, despite these declines, it is possible to see significant long-term gains.

Case in point: In 2018, the price of Ethereum fell nearly 95% over the year. But if you had invested at the bottom, you would have seen returns of nearly 1,900% by then.

Although the crypto market as a whole has been struggling for the past few months, that doesn’t mean you can’t make a lot of money over time. There is no guarantee that you will become a millionaire, but if you invest in the right places and hold these investments for the long term, it is always possible to see significant returns.

The key to a successful investment

To be clear, no one knows for sure how crypto will perform over time. The whole industry is still speculative at this point, so even the strongest investments are not guaranteed to succeed. However, the right strategy can improve your chances of making money over time.

In addition to keeping a long-term perspective, it’s also important to choose your investments wisely. While no one can say for sure which cryptocurrencies will thrive over time, those with the most real-world utility are the most likely to succeed.

Cryptocurrencies like Bitcoin (BTC -3.46%) and Ethereum, for example, are somewhat more secure options simply because they are the most popular and widely used. Again, this doesn’t necessarily mean they’ll be successful, but since they have more real-world utility than many other smaller tokens, they’re more likely to stick around for the long haul.

On the other hand, cryptocurrencies like Shiba Inu carry more risk. Shiba Inu’s rise to fame was based largely on the substance hype, and while it has made strides toward improving its usefulness, it still lacks a strong competitive edge in the game. sector. While nothing is impossible in the crypto world, tokens like Shiba Inu will face an uphill battle.

When the entire crypto market is in crisis, it’s easy to feel pessimistic about the future. But it is still possible to generate wealth by investing in crypto – as long as you have the right strategy.

No one knows exactly what will happen with the industry, and it’s impossible to say for sure whether investing in crypto will make you a millionaire. But with the right approach, you can give yourself the best chance of winning as much as possible.

Katie Brockman has positions in Bitcoin and Ethereum. The Motley Fool has positions and recommends Bitcoin, Ethereum, and Solana. The Motley Fool has a disclosure policy.