Crypto personality Ben Armstrong, widely known as BitBoy in the crypto community, has revealed his strategy for turning a modest sum into a $1 million fortune.
Armstrong shared this insight in a new video on Tuesday, emphasizing that the path to wealth speeds up dramatically after hitting six figures. He broke down the process using Bitcoin’s historical performance and the power of compound interest to illustrate how investors can scale their portfolios exponentially.
Making the First $100K is the Hardest
Armstrong starts by addressing the challenges of making the first $100,000 in crypto, calling it the hardest step. “Making your first $100K in crypto is hard,” he admits. However, he follows up by suggesting that once investors hit this milestone, reaching $1 million is significantly easier due to the nature of scaling.
Quoting Benjamin Franklin’s adage that “money makes money,” Armstrong explains that the wealth accumulated from the initial investment multiplies faster over time.
He backs up this claim by comparing Bitcoin’s historical annual return of 100.68% to the S&P 500’s average of just under 11%. This data illustrates how Bitcoin investors could double their investment every year simply by holding onto their assets.
Another great Ben once said, “the money you make makes money, and that money makes more money.”
-Benjamin Franklin— BitBoy (@BenArmstrongsX) October 8, 2024
$1K Turns to $1M Faster After First Crossing $100K
Armstrong pointed out that if an investor had started with $1,000 in Bitcoin, they could have grown their investment to $128,000 in seven years. The key insight is that after reaching that point, the next three years could bring the portfolio over $1 million with no additional investment.
Accordingly, BitBoy highlighted the significance of dollar-cost averaging, noting how consistent small investments can accelerate wealth building. However, he warned that the projected result is not straightforward, as it also depends on when one enters the market.
For instance, investors who entered the Bitcoin market in Q4 of 2021 would just be breaking even today, three years later, as the market went bearish after the initial top. Nonetheless, BitBoy noted that by simply holding, an investor could go from $100K to a million dollars much faster than it took to make the first $100K.
“The larger the amount, the faster it compounds, like a snowball rolling downhill—it just gets bigger faster,” he said.
Investors Need Discipline to Accumulate Wealth
Furthermore, BitBoy emphasized that the second reason net worth tends to skyrocket after reaching $100K is experience. He pointed out that an experienced investor has a better grasp of how to react to market fluctuations.
Armstrong illustrated this by discussing a scenario where an investor bought Ethereum in early 2021 for $1,700, only to see it rise to $4,000 by May. When the May crash hit, and the price dipped below $2,000, some investors likely reacted emotionally and panic-sold.
Shortly after, the price rebounded to $2,300, prompting these investors to FOMO-buy back in. As a result, their initial investment of one ETH is now worth only 0.86 ETH.
He used this example to underscore the importance of patience and long-term thinking amid market volatility. Essentially, he stressed that being invested in the market for the long haul is often more beneficial than trying to time the market perfectly.
Ultimately, he said, “The friction of wealth accumulation is all in the beginning,” urging crypto investors to focus on scaling their portfolios.
