The sky's the limit when you decide investing in cryptocurrency and here is what it takes to become the next crypto millionaire!
Becoming a crypto millionaire is THE big story this year…and I am sooo over it!
OK, I get it. You were smart while the big dummies like myself waited to start investing.
But is it too late to start now? Can cryptocurrency still make you a millionaire and how much would you need to invest?
In this video, I’ll show you two strategies for when to buy cryptocurrency along with which five coins to buy, price forecasts in each and how much you need to become a crypto millionaire. Stick around because I’ll then reveal my own $400,000 cryptocurrency portfolio and which I’m buying for those get rich dreams!
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I’m partnering with BlockFi for the video I use the platform to earn up to 4% interest on my bitcoin and Ethereum and up to 8% on stablecoins. There are no fees to buy or sell bitcoin on BlockFi and it takes less than five minutes to get started. I’ll leave a link to BlockFi in the description below. Click through and get a bonus of up to $250 when you open an account plus earn interest on your crypto.
Before we get to which cryptocurrencies to buy and how much to reach that million-dollar payday, I want to cover when to buy your crypto because it’s one of the most common questions I get.
I’ve got two strategies here for when to buy crypto that work really well. First is just a simple dollar-cost average every month like with a stock portfolio. Now whether you call this dollar-cost averaging or simply monthly investing really doesn’t matter. The important point is, you’re saving a little from each check or each month to invest in crypto and stocks. That means, no matter where prices go, you’re benefitting from having that investment as well as if prices fall then you’re getting those new, lower prices.
I know this isn’t what you want to hear. You want to hear some secret insight into when cryptocurrencies will have another characteristic selloff, how far prices will fall and that you should wait to get the very bottom of the market.
Sorry but it just doesn’t happen that way. It does work into my second strategy but trying to guess at when prices will selloff or when they’ve hit a bottom is going to mean you miss out if they keep running higher. This monthly strategy is the best I’ve found for not having to time the market and benefiting from the long-term upside. It may seem like prices are high now, especially after the run we’ve had over the last year with bitcoin up 326% and other altcoins up even more. But on price forecasts I’ll reveal later in the video, even the current price is going to seem like a bargain.
Beyond that consistent monthly investment though, I am also taking advantage of the moments of max fear in the market, buying when others are panicking. Looking through five years of daily bitcoin prices, that’s 1872 glorious days of data from the Gemini database. Over that period, the price of BTC has fallen 9% in a single day on 19 occasions, those big daily scares, but has gone on to rebound for an average return of 10% over the next two weeks.
Now, I’m not selling on that two-week rebound but it is nice to pick up an extra initial return being able to take advantage of the short-term fear in the market.
As for which to buy, there are thousands of cryptocurrencies and I wouldn’t touch most of them with a ten-foot pole and a shot of penicillin.
Hey, you may want more risk in your portfolio and far be it for me to question this guy’s obvious skill in picking investments…but I want the cryptocurrencies that serve a purpose, that have real investment value and a fundamental reasoning behind them. With that in mind, I want to highlight five cryptocurrencies I think have the strongest investment case, expected returns and how much you’d need to invest to become a millionaire.
5 Cryptocurrencies for a Strong Crypto Portfolio
And while bitcoin is very much different from the other cryptos I’ll highlight, I still think it deserves a part in your portfolio. Even as some of the other coins take the headlines, bitcoin is still $850 billion market cap or about 41% of the total cryptocurrency market. With that leadership and the longevity, it’s clear that institutional investors and corporations have a level of comfort with bitcoin…at least on the investment side that you just don’t see in other tokens.
That’s going to mean we continue to see most institutional investing and corporate cash go into bitcoin which is a big part of the price forecast we’ll look at.
So even though I like the blockchain use case we’ll see in the other coins, bitcoin still leads the crypto universe. Think of bitcoin as the United States of the global economy. The saying used to go, when the U.S. economy sneezes, the rest of the world catches a cold because the U.S. economy was such a powerful driver. It’s a lot like that with bitcoin and the other altcoins and why I still think you need bitcoin in your portfolio.
Now bitcoin’s existing size at $850 billion probably means we won’t see the kind of returns we could in other cryptocurrencies but returns could still easily be on the order of three and five-times your money. We’ll look at some price forecasts next but think about it like this, there will never be more than 21 million bitcoins…ever, and there are already more than 22 million millionaires in the world. So even if every crypto millionaire, and only the millionaires, wanted to buy just one bitcoin, there just aren’t enough to go around and that supply-demand imbalance is going to push prices higher.
Even with the recent selloff, bitcoin is still up 326% over the last year. As for price forecasts, I like to use an average approach from different predictions.
Our first price estimate is from venture capital investor Tim Draper, who has made billions as an early investor in Twitter, Skype and Tesla, Draper points to that limited supply of bitcoins, and says that bitcoin is “sort of like Microsoft in software or Amazon is for the e-commerce world” That bitcoin will be the center of financial activity for the next two or three decades and that will drive the price.
In fact, Draper estimates bitcoin could reach $250,000 by the end of next year which would be more than a 5-fold return, and beyond from there.
The big news over the last year for bitcoin’s price has been that momentum for institutional investors in the space as well as companies holding some of their cash reserves in bitcoin.
ARK estimates that if companies in the S&P 500 allocated just 1% of their cash reserves to Bitcoin, something we’ve already seen from Square, Salesforce.com and Tesla, that alone would add another $40,000 to the price of Bitcoin. And a 10% allocation would take it $400,000 higher!
The value of the US dollar against a basket of currencies lost 12% last year and inflation is rising at over 5% a year. As more corporations hedge their dollar risk by putting cash reserves in Bitcoin, that alone takes our valuation between $90,000 to $450,000 per Bitcoin.
And that’s just corporate investment. Ark estimates that institutional investment from pension funds, sovereign wealth and private investors could add between $100,000 to half a million more to the price. Here we see just a 1% allocation from high net worth individuals, pension funds and other institutional investors adds $100,000 to the price.
ARK Invest CEO Cathie Wood estimates bitcoin could reach $500,000 when all this happens, an increase of more than 10-times on the current price.
My own price forecast I shared in a previous video is between $94,000 to $190,000 over the next three years but in averaging these out, I want to stay conservative for a price forecast of $280,000 through 2025.
That would be a 515% return over the next four years which would be amazing but would still mean you’d need to invest $162,000 to become a crypto millionaire so let’s look at some of these other cryptocurrencies which I think will produce higher returns.
Ethereum, the second largest crypto token at a market cap of $386 billion has produced a 773% return over the past year and is my top holding among five cryptos I own. Now that’s not necessarily because I think it will produce the highest return but because it’s the best balance between return and safety.
You see, a lot of these other coins coming out are being created to be an ‘ethereum killer’ trying to do what ETH does but better. And yet, we still see the vast majority of applications being built on the Ethereum blockchain. So, I like some of these other coins and we’ll look at the pros and cons of each, but Ethereum will remain the king when it comes to DeFi and other blockchain uses. These other coins may produce higher returns but also with more risk that any individual one won’t reach the critical use case to survive, so I want to balance that risk-reward with a larger investment in ETH.
And talking about the potential for Ethereum prices, when we look at that intrinsic value created by DeFi applications like we did a few weeks ago, DeFi originated on Ethereum and it’s where the biggest applications are running. The total locked value on the Ethereum blockchain alone is more than $65 billion, more than two-thirds of the total and the token price has jumped over 700% just in the last year…that’s almost nine-times your money in a single year!
So even if that return slows only produce that 773% return over the next five years, that would still mean turning $114,547 into a million. That’s an Ethereum price target of just under $29,000 which would still be under the $35,000 price forecast by Standard Charter. If Ethereum went to $39K from here, just $94,073 would make you a crypto millionaire.
The big story this year has been Cardano and its ADA token with a 2,486% return over the past twelve months! That makes it the third largest crypto by market cap but still less than a tenth the size of bitcoin at just $77 billion.
Cardano was the original Ethereum killer. Launched in 2017 by a co-founder of Ethereum in an answer to the flaws in that coin and bitcoin. Cardano adopted a proof-of-stake model which is a greener alternative to the proof-of-work model of mining which both bitcoin and Ethereum use though ETH is transitioning that way this year.
Like bitcoin, the supply of ADA is limited to 45 billion tokens of which about 32 billion are in circulation now, so you get that supply-demand argument. The main selling point for Cardano though is the ability to store any asset digitally, like stocks, money and NFTs which are built into smart contracts. In fact, a lot of the recent price surge was on anticipation of the upgrade that would allow Cardano to introduce those smart contracts, something it did mid-September.
Now price forecasts are actually more bearish on ADA with a target on Wallet Investor of just $13.97 for 2025. That would still be a 482% return but it’s definitely not the upside optimism we see in the other tokens and would mean you need to invest $171,821 to reach your million-dollar payday.
Even on these lower return forecasts though, I still like Cardano because it’s so versatile that I think we haven’t seen a fraction of the projects or contracts that can be used on the chain. That’s going to surprise people on the price just like it has over the last year.
One of the least well-known cryptos I own is the Polygon Matic with an $8.4 billion market cap making it the 21st largest cryptocurrency.
Like Cardano, Polygon was created to solve the major problems in Ethereum like scalability and transaction fees and it’s seeing a wave of application growth. As more gets put on the Ethereum blockchain, we’ve seen those fees and processing times increase. So Polygon is a blockchain built on top of Ethereum, called a layer-2 blockchain, to process transactions faster. Besides the benefit in speed, transaction fees on MATIC are as low as one-thousand what they are on the larger blockchain.
As a result, hundreds of applications have been built on the chain and the token price has increased by over 8,300% over the last year. In fact, Coinbase, the world’s second largest crypto exchange has announced it will start using MATIC’s scaling solution as a way to reduce fees and settlement times, taking advantage of that layer-2 solution.
Obviously a lot of that quadruple-digit return has been a function of the low starting point, from just $100 million last year, but we could still see a strong rise in demand for this one. Forecasts range as high as $12.08 by 2025 which would still only put it at $77 billion market cap or about where Cardano is now. That would be an 822% return on your money and turn $108,459 into a million in four years.
And understand, I’m trying to stay conservative on these price forecasts and only carrying them out to 2025. Give these tokens a little more time though, say five to ten years, and I think you can cut in half the amount you need to invest to become a millionaire.
Another big mover this year, the AAVE, is the smallest crypto of the five with a market cap of $4.3 billion making it the 39th largest.
Aave is an open-source DeFi platform and one of the first, introduced in 2017 as a match-making system to connect lenders and borrowers with a stunning 1,086% return over the past year.
Lending and borrowing is easily the most popular use in DeFi right now. Think about this, Wells Fargo alone made almost $9 billion in just the last three months by paying 0.03% on your deposits then loaning the money out at an average 2% rate.
As the leading DeFi exchange for lending, AAVE will continue to capitalize on that growth. It was as high as $660 each just this year with price forecasts as high as $2,000 for 2023 and $4,700 by the end of 2025 by GOV Capital. That target of $4,700 would be a 1,342% return over the next four years, turning just $69,396 into one million dollars!
Those are the five cryptocurrencies I’m watching and in full transparency, I wanted to reveal my own portfolio and the strategy I’m using. Nation, there are a lot of channels here on YouTube that are talking up certain stocks or crypto but aren’t actually investing their own money. I think the days are numbered before we have some kind of SEC or government oversight on this because there just isn’t the transparency you need on Youtube or other social media.
You see here, I’ve got two cryptocurrency wallets on BlockFi and Coinbase. Since it’s not yet possible to add my Iowa bank account on BlockFi, I make my purchases on Coinbase and transfer to BlockFi to earn interest.
I’m focusing my investment on those five cryptocurrencies with just under $400,000 total in crypto. On Coinbase, you see I’ve got Ethereum, Bitcoin, Polygon Matic, Cardano and Aave.
Here in my BlockFi account, I’m holding the bulk of my bitcoin and Ethereum to earn interest as well as my stablecoins PAX and USDC to earn up to 8% interest on those.
The rough breakdown goes like this. I’ve got 45% of that total investment in Ethereum and 32% in bitcoin. The rest is spread among those altcoins; Matic, AAVE and Cardano and these are off my target percentages just because I just started investing in some of the altcoins. I’ll probably end up with about 20% in bitcoin, 40% in Ethereum and maybe 15% in Cardano, so a very top-coin heavy portfolio and then the remaining 25% in the altcoins like Matic and Aave.
I like this percentage breakdown to focus on the coins with the most certainty in upside, even if the returns might be slightly lower, while taking a little more diversified risk in the up-and-coming altcoins to reach that million-dollar portfolio.
Read the Entire Investing in Cryptocurrency Series