Is It Too Late to Invest in Crypto?

In 2010 Bitcoin was less than 1 cent per coin.

If you had invested $5 in 2010, you would now have $2.5 million dollars.

That’s a 50 million percent return and there is no shortage of news stories sharing stories of how successful people have become by investing in Bitcoin or other cryptocurrencies.

Because of these stories, cryptocurrencies have exploded. There are approximately 290 million people in the world that hold crypto.

With a current market cap $140 billion the average person has to be holding at least $500 in crypto.

Now, if we give all the current crypto holders a 50 million percent return on their average holding of $500 we get 72.5 quadrillion dollars.

OK, so the average investor is not going to get a 50 million percent return, but what about becoming a millionaire from their average investment of $500?

Is this more reasonable?

Getting from $500 to $1 million dollars is a 200,000% return on your investment.

Is a 200,000% return on investment reasonable?

Are you really sitting there waiting for the answer? It’s $290 trillion dollars or a little more than 3 times all the money in the world.

So if you’re looking to invest a small amount, then to sit back and make it big in crypto, that ship has most definitely sailed.

You can still make it big in this space but it will require some work or you will need to consider expecting more realistic returns.

There are heaps of opportunities in the crypto space and I think if you subscribe to my channel you will get to learn more about these.  

With that said let’s look at crypto as an investment rather than how it’s portrayed as a get rich quick scheme.

Crypto Exchanges such as Kucoin offer their own token, not only do token holders receive dividends from Kucoin’s profits, but they also get discounts on trading fees for holding the token.

It is really the perfect way to build customer loyalty.

Some Cryptocurrencies offer staking where you lock in a set amount of crypto for a set amount of time. The stake gives you a percentage of transactions in the network and the ability to earn the fees from those transactions. You may still have to share some of your fees with master nodes or some of the hardware providers on the network.

Sometimes crypto organisations will do what is called a burn. A burn means that a selected number of coins are disposed of forever. If you are trading in crypto you need to be very wary of what burns will do for market prices. When Synereo burnt $100m of their cryptocurrency AMP (31st March 2018). The price floated around 28 cents (30th March) and then dropped from 31st March to lows of 25 cents and a day later on the first of April it was at a low of 21 cents.

Bitcoin has fluctuated in wild market pricing between 7500-6500 (15% margin) over these days, while also maintaining a horizontal line. While AMP had taken on a 33% loss.

So why might a coin that now has less of it available lose against a fixed supply coin such as Bitcoin?

The reason is a coins value is based off supply and demand. The burn does affect the current supply. Coins that are burnt come from the non-circulating supply that Synereo owns. Traders anticipate a price increase because of the burn announcement and this increases demand up until the burn.    

Hard forks are another type of return when users get coins in both chains. An example of this is B-Cash and Bitcoin. Hard forks occur because of a software update that is not backwards compatible. This means nodes that are not updated run the old software that sees updated nodes as having invalid transactions. Bitcoin is an open source anyone can take the project in any direction they want, for B-Cash it is a larger block size. When projects to this it is important that they use replay projection. B-Cash initially used opt-in replay protection, but now it is required for all transactions.  Without replay protection you could offer someone an above market rate for their B-Cash and then replay the transaction on the Bitcoin network taking two amounts from them. B-Cash’s replay protection works by changing the signature code on the transaction, so if the same transaction is used on the Bitcoin network it is seen to have an invalid signature.

Random airdrop tokens were popular with Bitcoin and Ethereum holders in the early days. This is where organisations would give away a percentage of their tokens in order to generate interest. Less of this is done today because the SEC now has a watchful eye now on the crypto space and legitimate organisations do not want to run into legal hassles.     

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