Is It Too Late to Become a Bitcoin Millionaire?

Bitcoin can feel like one of those "if only" investments. If only I'd bought it 10 years ago when one Bitcoin cost less than $500. Or in early 2019, at less than $5,000. If only I'd bought shares in Amazon when it was still just an online bookstore.

Unfortunately, investments don't work in hindsight. Many people hadn't even heard of Bitcoin when it launched in 2009. Even if you'd bought Bitcoin 10 years ago, it would have been a much bigger gamble than it is today. Few people saw it as an investment at that stage. Even fewer would have predicted the granddaddy of crypto would top $70,000 in 2024.

If you're considering buying crypto, don't get lost in "if onlys." The more important question is what it might do next and how it compares with other potential investments.

Is it too late to buy Bitcoin?

Even the biggest crypto skeptic can't deny that Bitcoin's price performance to date has been extraordinary. It has gained over 15,000% in the past 10 years.

If you're wondering if you've missed the boat, the short answer is you're unlikely to see another 15,000% gain in the next decade. Equally, it's never too late to buy an asset if you think it will perform well and it fits with your investment goals.

There are some caveats. First, cryptocurrency is volatile. It's a relatively new asset and there's not much in the way of investor protections. Riskier investments can generate outsized returns, but they can also sink to nothing. Make sure you understand the risks and are ready to ride out some extreme price swings.

Another consideration is how you buy Bitcoin (and store it). As we've seen in recent years, hacking and platform collapse are both real dangers. Look for reputable exchanges and crypto brokerages, such as Robinhood, that will keep your assets offline in what's known as cold storage.

Can Bitcoin still make you a millionaire?

Reaching millionaire status depends on many factors. These include how much -- and how often -- you invest, how long you leave your money invested, and how your investments perform. If you're investing $500,000, it's easier to reach $1 million than if you invest $1,000.

For the sake of simplicity, let's say you bought $10,000 worth of Bitcoin. Let's also assume you aren't able to earn any interest on it. You'd need the price to increase 100-fold to get to $1 million. As I write this, BTC is trading at around $65,000. So we're talking about the price reaching $6.5 million. That's a tall order.

A lot rides on what you think makes Bitcoin valuable now and what it could do in the future. Some see it as a type of digital gold -- a hedge against inflation. Others think it could be the future currency of the internet. ARK Invest believes Bitcoin could be worth $1 million or more by 2030. That's partly because its analysts predict it will take a chunk out of the global money transfer industry. Some 15 years after its launch, optimists insist Bitcoin is here to stay.

On the other hand, Bitcoin still has plenty of critics. They argue that it has no intrinsic value and that it's too volatile to work as a store of value like gold. One concern is that it is a speculative bubble just waiting to burst. Another is that it is used for illicit activities.

Single investments aren't the way to build wealth

Whatever you make of the arguments above, there's a broader question of diversification. If you want to retire with $1 million or more in your portfolio, it would be a huge gamble to try to do it through crypto alone. Or any other single asset, for that matter.

Sure, Bitcoin's price might skyrocket again. If you're all in on crypto, you'd be free to quit your job and take that cruise you've always dreamed of. Equally, it might drop by 80% six months before you're due to retire, leaving you with a fraction of what you need. That feels like a very risky way to build wealth.

If you want to become a millionaire, building a diversified portfolio is a safer route. You might include a small amount of Bitcoin, depending on your financial situation and risk tolerance. That way you'd still benefit from any big gains, but you'd also be insulated against losses.

The great thing about the slow-and-steady approach is that you don't have to take huge risks. History shows us that the average annual return of the S&P 500 since 1928 is around 8%. The market will have good and bad years. Even so, once compound interest gets to work, that 8% return can be powerful: If you invested $500 a month for 35 years, you could retire as a millionaire.

Bottom line

A recent report by Henley & Partners showed there are over 85,000 Bitcoin millionaires -- people who own over $1 million in BTC -- right now. But it doesn't give any clues as to how many made their millions in crypto.

There are many routes to millionaire status. Some people have got there by buying Bitcoin. A few won the lottery or inherited large fortunes. Many more took the slow-and-steady approach of investing a proportion of their paycheck every month. There are never any guarantees, but that last route is more certain and more achievable for the majority of us.