Cryptocurrency, at least until recently, has been largely viewed as a money-making machine, especially by outsiders. This is due to how a few people who make it big in the industry flaunt their money and wealth on social media. However, a new report by London-based firm Henley & Partners points to a different trend.
According to the report, there are 88,200 crypto-millionaires globally. However, that is a tiny fraction of the total number of the 425 million total crypto users all over the world.
Examining those numbers, it could be deduced that cryptocurrencies are not only limited to the ‘wealthy’ and that not everyone in the crypto space is rich.
More on the Wealth report
According to Henley & Partners which worked with South African wealth intelligence firm New World Wealth to collect data for the Crypto Wealth Report 2023, crypto-millionaires are people owning at least $1 million in crypto assets.
Specifically, the world has at least 88,200 crypto-millionaires. This means that at least 88,200 people have $1 million or more in cryptocurrencies. But disappointingly, that represents just 0.02% of the total 425 million who trade or own cryptocurrencies.
Also, the report says just 182 users have cryptocurrencies worth more than $100 million and a mere 22 users own at least $1 billion worth of cryptocurrencies each.
In the broader sense, the 88,200 crypto-millionaires constitute just a minute fraction of the world population of millionaires, which runs well over 20 million.
Nevertheless, the bright side to this is that this exclusive class of crypto-millionaires are now outnumbering wealthy individuals in top countries like Russia (65,000 millionaires) and Saudi Arabia ( 52,000 millionaires), according to Andrew Amoils, head of research at New World Wealth.
The report further states that a significant proportion of these crypto-millionaires hit the jackpot due to strategic investments in cryptocurrencies.
Crypto is not a quick money-making scheme
In recent years, cryptocurrency has gained widespread attention, with tales of overnight millionaires capturing headlines and fueling the belief that it’s a quick path to financial prosperity.
While it’s true that some individuals have struck it rich in the crypto space, the reality is far more nuanced, and the odds of achieving such success are slim for most. Cryptocurrency is not a guaranteed ticket to wealth; instead, it demands patience, knowledge, and a prudent approach.
First and foremost, it’s essential to acknowledge the stark truth that only a tiny fraction of crypto enthusiasts become millionaires, exemplified by the Crypto Wealth Report. For the majority, replicating such success is challenging, if not improbable.
Cryptocurrency markets are incredibly volatile, subject to wild price swings driven by a myriad of factors, including regulatory changes, market sentiment, and technological developments. These fluctuations can lead to substantial financial losses for those who don’t thoroughly understand the market dynamics or lack a long-term investment strategy.
To navigate the cryptocurrency landscape responsibly, one must invest time in research and education. Understanding blockchain technology, the fundamentals of different cryptocurrencies, and market trends is essential. Developing a diversified portfolio and adopting a long-term investment horizon can mitigate risks and improve the chances of financial success.
In conclusion, while the allure of quick riches through cryptocurrency is enticing, it’s crucial to recognize the reality. Crypto is not a guaranteed path to wealth, and only a select few achieve millionaire status. Prudent investors approach the crypto market with knowledge, patience, and a willingness to weather the inevitable ups and downs, understanding that the road to financial success is more of a marathon than a sprint.
Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!