How the rich are getting richer in Crypto Assets

Source: Crypto Unfiltered

Introduction

You don't need to win the lottery or pick the next miracle coin to accumulate wealth in cryptocurrency. Indeed, some people are lucky, like those who bought Bitcoin at $3 and retired early, but relying on luck is a bad strategy.

So, how do the rich continue to get richer in cryptocurrency steadily and sustainably, without relying on gambling-style meme coins?

The Boring Truth: Buy and Hold

The simplest and most effective method, which is also the least stimulating, is to buy Bitcoin, Ethereum, or other top cryptocurrencies and hold them long-term. Since 2012, Bitcoin's average annual return has been around 150%, far exceeding all other asset classes, including stocks, which have fallen nearly 100% compared to Bitcoin during the same period.

Holding may sound boring, but ask yourself: do you want to chase the latest hot tokens for 100x returns (and then likely lose it all), or steadily increase your wealth over time?

Avoid Major Mistakes

The cryptocurrency market is full of temptations and promises of easy money. Most investors make the same mistake:

• Over-leveraging: Borrowing money to invest beyond what one can afford to lose. This never ends well.
• Chasing High Returns: The high yields in decentralized finance (DeFi) are tempting, but often come with hidden risks. Just ask those who lost money in the Luna collapse.
• Investment Concentration: Overly betting on a single cryptocurrency or speculative concept can lead to huge losses when the hype fades.

The rich stay wealthy by avoiding these traps. They diversify their portfolios, manage risks carefully, and understand that the pain of losing money is greater than the pleasure of making money.

How to Manage Your Investment Portfolio

Start simple:

1. Gold Standard Dollar Cost Averaging (DCA): Invest a fixed amount regularly, regardless of price fluctuations. This method smooths out volatility and eliminates emotional decision-making.
2. Invest Wisely in Diversification: Allocate most of your funds to proven assets like Bitcoin and Ethereum, while allocating a small portion to other promising cryptocurrencies.
3. Stay Vigilant: Security is paramount. Use hardware wallets, do not click on suspicious links, and always carefully choose where to store your cryptocurrencies.

Long-term Planning and Patience

In cryptocurrency, the hardest part is not choosing the right coin, but maintaining patience and emotional detachment during extreme market fluctuations. True crypto wealth is not created overnight; it accumulates gradually over market cycles. Those who bought Bitcoin early did not cash out during the first 100% surge. They understood the power of patience.

The Superpowers of Cryptocurrency: Behavioral Incentives

Unlike stocks or bonds, crypto assets come with built-in incentives (token rewards, community governance, etc.) that maintain user engagement and loyalty. This unique attribute ensures long-term user growth and network effects, ultimately driving up value.

Enjoy life, stay positive

Accumulating wealth should not mean sacrificing happiness or quality of life. The cryptocurrency market can be stressful, and constantly monitoring price fluctuations can be exhausting. Enjoy your hobbies, spend quality time with family and friends, and embrace experiences beyond finance.

Stay positive by focusing on what you can control: your actions, your learning, and your growth. Cultivate patience and remember that real, meaningful success takes time. Live in the moment, celebrate your progress, and don’t let market fluctuations dictate your happiness.

Final Thoughts

If you remember only one thing, it is this: cryptocurrency is still in its early stages. The entire crypto market is currently valued at around 4 trillion dollars and could grow to 50-100 trillion dollars in the next decade.

Accumulating wealth in cryptocurrency doesn't require luck or insider information. You just need a wise approach, patience, and disciplined persistence.

Perhaps, we should also resist the impulse to sell our house to buy the next Meme coin.