Is Bitcoin Still a Millionaire-Maker?

Over the last 15 years, Bitcoin (CRYPTO:BTC) has arguably been one of the best investments you can make. Bitcoin has outperformed every other asset class for over a decade, with sudden price drops giving way to even greater highs. As a result, even a relatively small investment made a decade ago could easily be worth more than $1 million today.

Of course, some of the investors moving their money into new Bitcoin ETFs are considering Bitcoin’s millionaire-making potential, especially given the new political momentum behind the cryptocurrency. But does Bitcoin still offer millionaire-making potential to today’s investors?

Past performance is no guarantee of future performance

As impressive as Bitcoin’s performance has been over the last 15 years, there’s no reason to think it can continue forever. From 2011 to 2021, Bitcoin was the world’s best-performing asset, and it wasn’t even close. During that period, Bitcoin returned 230% annually. The next closest asset class, tech stocks, returned just 20% annually.

That’s impressive, but for most of that period, Bitcoin was one of just a handful of cryptocurrencies you could invest in. Ethereum (CRYPTO:ETH), for example, didn’t come out until 2015. And many of the biggest gainers in recent years — like Solana (CRYPTO:SOL) — didn’t come out until 2020. So when investors wanted to invest in crypto, they didn’t have many options, and Bitcoin soaked up the influx of new money.

But there are thousands of different cryptocurrencies out there right now, and some of them are likely to deliver returns far superior to Bitcoin over the next decade or more. For this reason, I think it’s a mistake to predict Bitcoin’s future performance based on past performance. The crypto market continues to evolve and change, and Bitcoin will need to evolve and change if it wants to remain a millionaire-making crypto.

In search of 1,000x cryptocurrency

In the crypto investment world, it’s common practice to look at specific cryptocurrencies in terms of their upside potential. The least interesting cryptocurrencies are those with a 10x upside potential. If you’re investing in stocks, that might seem like a stratospheric return, but for crypto investors, a 10x upside is a pittance. The real money is made by finding cryptocurrencies with a 100x or even 1,000x upside potential.

Image source: Getty Images.

Bitcoin once had a 1,000x upside potential. This helped transform Bitcoin from a relatively unknown digital asset into a $70,000 digital asset. If you wanted to be a millionaire, it was time to buy Bitcoin. You could conceivably turn $1,000 into $1 million at a 1,000x return.

But now just do the math. If Bitcoin is still 1,000x crypto, that means a single Bitcoin will eventually be worth $70 million. Sure, you could roll yourself into a bagel to do the math, but that’s unlikely. At $70 million per coin, Bitcoin would have an implied valuation well above the entire S&P 500.

However, there is still a lot to look forward to for Bitcoin investors. The general consensus is that Bitcoin is a surefire lock to break the $100,000 price level in the next 18 months. Several price predictions predict Bitcoin reaching $1 million by 2030. But even if Bitcoin reaches $1 million in a few years, that would still only represent a 15x increase. You would still need to invest around $70,000 to reach $1 million.

Who wants to be a millionaire?

It’s easy to see that if you’re thinking about investing in Bitcoin, you need to have realistic assumptions. The days of becoming a crypto millionaire overnight are long gone. Now, it’s all about playing the long game and being a patient, buy-and-hold investor. That’s how you build real wealth.

Should you invest $1,000 in Bitcoin right now?

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

Is Bitcoin Still a Millionaire Maker? was originally published by The Motley Fool