How to Become a Millionaire with Cryptocurrency – Becoming a millionaire in cryptocurrency is a dream that many people want for themselves.
There are 9 things to understand well in Cryptocurrency.
In the case of blockchain-like BITCOIN, ETHEREUM, POLKADOT, CARDANO, BNB, etc. It is to know the protocol of consensus. Is it Proof Of Work, Proof Of Stake, or Proof Of Authority?
And the important thing is to know how many validators there are because it’s completely different. A blockchain with a few dozen validators or it’s super centralized, which can’t be recommended and a blockchain that has several tens or even hundreds of thousands of validators makes it extremely robust.
Another thing to know is the speed of this Blockchain.
For example, the two things that will define the speed are:
– The number of transactions per second.
-The time to finality.
So these are two things to know if the Blockchain will be easily scalable or if it will be a bit complicated when many people are using it.
2. Its community
Follow the Blockchain and its ecosystem on Facebook, Twitter, Instagram, Discord, and Telegram.
To be able to understand what people are doing on this Blockchain, look at the followings:
– If there is a big craze from developers to create decentralized applications on it.
– If there are great partnerships.
– If there are big companies that have invested in the projects or these blockchains.
– The last thing is the “Tokenomics,” so understand well the location of the Token or Coin of each Crypto.
– Is it very well distributed, which is the best, or are there only a few wallets that concentrate a majority of the Cryptocurrency in the case that these concentrated in just a few wallets.
Any day these Wallets sell, it can make the Cryptocurrency price drop, which is not very good.
And also, understand if it is a Cryptocurrency:
– Deflationary, in which case it’s great, or Inflationary in that case, it’s not so good because it means that more and more Cryptocurrencies are put into circulation, and finally, that can dilute its value a bit and make its price go down in the long run.
3. Compounding Potential
Compounding is an investment principle that means the multiplicative growth of an asset. It is like planting a seed and harvesting hundreds in return.
In crypto, your investment has the potential to compound 10X and even 1000x. This is due to the speed in the adoption of crypto innovations by institutional investors and the growth of the crypto industry.
But, it is not all crypto projects that have compounding potential. The risk is very high, as there is a 100% chance that the project may not succeed. But, good projects like Ethereum (ETH), Solana(SOL), Binance Coin (BNB), Avalanche (AVAX), Cardano (ADA), and Axie Infinity Shard (AXS) will always succeed.
4. Crypto Portfolio
In crypto, a portfolio is a collection of different crypto assets with the goal of growth.
How do you know the digital assets to include in your crypto portfolio?
How do we know the ones that will compound in value after sometimes?
You can research great coins or shit coins on Coinmarketcap.
Let me give you an example of the portfolio.
you have a crypto portfolio worth $2000 and in 1 year it grows to $200, 000. What do you call that?
That’s the compounding nature of crypto.
This was exactly what happened to Bitcoin, Ethereum, and Solana (SOL) investors and holders.
After that, you need a set of skills to manage your portfolio.
5. Basic Skills
It is good to hold crypto assets or digital assets but it is better to hold crypto assets with certain skills.
Here are the basic skills you need to develop.
– Knowledge Skill: You certainly need to know how to use your wallet and manage your crypto assets.
You need to know how to protect your passphrases; you might share them with an untrusted fellow.
– TimingSkill: Holding digital assets or crypto assets is a business of time as investing is time in the market. So, you need to know two things, the time to enter the market and the time to exit the investment.
– Patience Skill: Being patient is a skill. Winning traders are patient. They know how to control their impulses to act decisively at the opportune moment. Rather than acting on a whim, they carefully devise a detailed trading plan, in which precise entry and exit strategies are specified, and strictly follow it. You need to be patient.
– EmotionalSkill: Don’t be influenced by your emotions. Emotional trading is when a trader or investor lets personal feelings and emotions impact their decision-making. Sometimes it can be helpful, but usually bringing emotion into trading is a bad idea. It is vital to control your emotions, rather than let them interfere with your trading decisions.
6. Buy very early Projects
This is how to find the very ‘’Early projects’’.
So you go to the site “CoinMarketCap.com.”
If you want a project with many potentials but has not yet been spotted, the first step is the thing to do will not be on the 1st page. It will be rather on pages 2, 3, 4.
For example, on the 3rd page, we’ll take “Uniswap.”
So the first thing to do is to see if this crypto is a COIN or a TOKEN.
A COIN means that it has its Blockchain, for example, ETH and the COIN of ETHEREUM.
In the case of Uniswap, it is not a COIN but a TOKEN.
It’s great to have either a COIN with its BLOCKCHAIN or a TOKEN on one of the most Blockchain, for example, ETHEREUM.
After looking at whether it was a COIN or a TOKEN, we can now look at which Exchange it is in.
So for that, you have to go to the bottom and look in “‘Market.”
For instance: The price of a cryptocurrency that initially is not going to go up much and evolves very slowly, and there’s a point where it’s going to pick up a little bit its price is going to go up, and then it’s going to go down.
When the prices go up, they do x10, x15, x30 and more. In reality, it’s much more complex than that, and as soon as the prices collapse, it seems impossible.
7. Understand in-depth what you are investing in
They are 2 types of investors who will invest at different times of the price of a cryptocurrency.
Investing in crypto can potentially be lucrative – especially if you invest at the right time. If you had invested $2,000 in Bitcoin a decade ago, you’d have more than $20 million today – assuming you held your investments and didn’t sell during that period.
At the start of May 2011, Bitcoin was said to be trading for approximately $3.50. So, $1,000 would have bought approximately 286 Bitcoins, not counting any transaction costs. As of April 27, 2021, Bitcoin trades for $54,680.
That means 286 Bitcoins would be worth approximately $15.6 million today, assuming you held on to them for the past 10 years.
While it is possible to become a millionaire with cryptocurrency, that doesn’t mean all investors will achieve that goal. So just how likely is it you’ll get rich with crypto?
Here is an analysis of how to make decisions based on market phases.
The market is volatile but over time your investment will compound and not overnight.
But when it does grow, don’t allow greed to keep you longer in the market, the negative side of volatility is loss-making.
It is faster to become a millionaire at this age than it was decades ago.
With Cryptocurrency, the possibility has become a reality. What a generation and a moment to be alive and be active.
Cryptocurrency prices have been reaching new heights in these recent years and many investors are trying to get in on the action.
One of the reasons crypto experiences so much turbulence is that it’s a highly speculative investment. Nobody knows what the future holds for cryptocurrency. Whether it becomes a runaway success or a massive failure. If it succeeds, you could make a lot of money by investing now. But if it crashes and burns, you could lose everything.
8. Your Strategy
Define a strategy to buy and sell your cryptocurrencies.
So, first of all, let’s talk about ‘’Dollar Cost Averaging’’.
Dollar-cost averaging (DCA) is an investment strategy in which an investor divides up the total amount to be invested across periodic purchases of a target asset to reduce the impact of volatility on the overall purchase.
Dollar-cost averaging is a strategy that can help you lower the amount you pay for investments and minimize risk. Instead of purchasing shares at a single price point, with dollar-cost averaging you buy in smaller amounts at regular intervals, regardless of price. Over the long term, dollar-cost averaging can help lower your investment costs and boost your returns.
So this is the programmed investment. It means that you will invest 500 dollars in cryptocurrency every month.
So what’s nice is that when cryptocurrencies are at a very high price, you’re going to buy 500 dollars, but you’re not going to buy a lot.
And when the prices are very low, you’re going to be able to buy a lot more.
And so, as the cryptocurrency market overall goes up, it is a technique that works.
Example: You buy every 1st of the month, you use 500 dollars.
And on the long term, but the long term is at least 3,4 or even 5 years, you have to think about a 5-year investment in cryptocurrency.
It’s still very difficult, it’s possible, but it isn’t easy to make money in a very short period.
There’s a great index too. It’s called R.S.I ‘Relative Strenght Index’.
The RSI index measures momentum and oscillates on a scale between 0 and 100. The calculation is based on the most recent 14 periods, one candle represents one period. The RSI indicator crypto shows when a market is overbought or oversold.
So this is what it looks like.
When the index is in red, it tells you to buy bitcoin.
When the index is in green, it tells you to sell your bitcoins.
So it allows you, in fact, in the idea of detaching yourself from its emotions, to have a very precise method to know when to buy, when to sell, and not to make mistakes.
You can also mix this with Dollar Cost Averaging and say to yourself when the R.S.I. ‘Relative Strength Index’ is low, and you can buy a little bit more coin in periods when the index is still a little bit higher, you can buy less.
In periods when the index starts to get quite high, you can start selling a little bit of bitcoin.
And when the index is very high, you can sell a lot more.
9. Make your crypto trading work
Earning interest on your idle crypto assets is a great way of making your money work for you.
1. The simplest thing is the “‘Staking.”
What is “‘Staking?”
So in the case of a Blockchain type, “‘Proof of Stake” is, CARDANO, or ETHEREUM, etc.
You can stake your crypto-est, so what will happen is that you will block to help secure the network.
And, with the “‘Staking,” you are doing a service to the Blockchain, and you can earn between 5 and 12% per year in interest.
So it’s quite simple to do, you help the Blockchain secure its network, and it gives you money as a reward.
2. The 2nd thing to do is to use the Defi protocols (Lending)
This would be like if you were a bank and you could lend your money to someone. So this person will give you a percentage, and it is paid every second. that’s so easy to do.
3. Liquidity Pools
A liquidity pool is a collection of funds locked in a smart contract. Liquidity pools are used to facilitate decentralized trading, lending, and many more functions we’ll explore later.
Liquidity pools are the backbone of many decentralized exchanges (DEX), such as Uniswap. Users called liquidity providers (LP) add an equal value of two tokens in a pool to create a market. In exchange for providing their funds, they earn trading fees from the trades that happen in their pool, proportional to their share of the total liquidity.
For example, ETH or other and the StableCoin USDS in a liquidity pool you always need a pair of TOKEN.
So every time someone makes a transaction, he will give you a small percentage because, thanks to you, he could exchange TOKEN in a decentralized way.
4. Play To Earn
So, you will buy NFTs, NFTs are often small characters, and thanks to this, you will earn cryptos by playing a video game.
The best thing is to have KuCoin and Binance apps for your cryptocurrency trading. In that case, it’s positive.
Many people have become crypto millionaires because they bought when was low and sold high.
It’s possible to become a millionaire through cryptocurrency, but it’s not so easy.
Remember that cryptocurrency isn’t a get-rich-quick scheme.