Is it still possible to become a millionaire with crypto?

Over the past couple of years, cryptocurrency has been known for its sky-high returns.

Ethereum (ETH -5.99%)for example, has seen its price rise by almost 800% in the last three years. Solana (SUN -6.10%) is up more than 3600% since inception, and Shiba Inu (SHIB -6.77%) has skyrocketed by a staggering 23,600,000% since its 2020 low.

It is often tempting to think about how much you could have earned if you had invested early. But crypto prices have plummeted since the end of last year, and many investors may be wondering if it’s worth investing at all.

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

Why Crypto Can Still Be Lucrative

The most important thing to remember when investing in cryptocurrency is that it is a long-term strategy. Although it is possible to make a lot of money in a relatively short time, that should not be the goal.

Volatility is extremely common in the crypto sector and sometimes these downturns are severe. If your goal is to become an overnight millionaire, that volatility will make it extremely difficult. Despite these declines, however, it is possible to see significant long-term gains.

Example: Back in 2018, Ethereum’s price fell by close to 95% over the course of the year. But if you had invested at the lowest point, you would have seen a return of close to 1,900% between then and now.

Even though the crypto market as a whole has struggled in recent months, that doesn’t mean you can’t make a lot of money over time. There are no guarantees that you will become a millionaire, but if you invest in the right places and hold those investments for the long term, it is still possible to see significant returns.

The key to successful investing

To be clear, no one knows for sure how crypto will fare over time. The entire sector 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.

Besides having a long-term perspective, it is also important to choose the investments carefully. 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 -2.99%) and Ethereum, for example, are somewhat safer options simply because they are the most popular and widely used. Again, that doesn’t necessarily mean they will succeed, but because they have more real utility than many other smaller tokens, they are more likely to stick around in the long term.

On the other hand, cryptocurrencies like Shiba Inu have more risk. The Shiba Inu’s rise to fame was largely based on hype over substance, and while it has made strides towards improving utility, it still lacks a strong competitive edge in the 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 a slump, 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 to the sector and it is 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 opportunity to earn as much as possible.

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

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