According to the latest Crypto Wealth Report from Henley & Partners, there were 40,500 Bitcoin (BTC 0.34%) millionaires in the world at the end of last year. That’s more than any other cryptocurrency, and it’s not even close. So we know that Bitcoin definitely has a track record of creating crypto millionaires.

But that was then, this is now. Nearly a decade ago, some investors became millionaires by investing when Bitcoin was still trading for less than $1,000. Today, Bitcoin is trading at around $63,000, so the task of becoming a millionaire is much more daunting. Does Bitcoin still have the power to turn you into a millionaire?

Bitcoin’s upside potential

The starting point for answering that question, of course, is sifting through the various Wall Street price predictions for Bitcoin and finding one that you feel comfortable using. Obviously, the higher the price estimate you use, the easier it is to forecast becoming a millionaire one day.

As for me, the one price estimate that I’m using is the $1 million price forecast from Cathie Wood of Ark Invest. She made that forecast in 2022, well before the arrival of the spot Bitcoin ETFs or the recent Bitcoin halving. Since then, she has raised that future price estimate to $1.48 million and then $3.8 million.

In order to come up with her initial $1 million price estimate, Wood looked at eight primary use cases for Bitcoin, and then made a few projections about the growth rate for each. So, for example, she projected that institutional investors would eventually boost their allocations to Bitcoin to 6.5% by the year 2030.

Given that Wood made this prediction before the arrival of the new spot Bitcoin ETFs, it actually looks fairly clever today. But it’s still a relatively aggressive prediction, given that Bitcoin portfolio allocations today are typically closer to 1%.

Dollar-cost averaging into Bitcoin

Once you have a price estimate that you feel comfortable using, it’s time to work backwards and figure out how much effort needs to go into becoming a crypto millionaire. If you have $63,000 to invest today, almost zero effort is required. You could simply invest all of your money (yikes!) in Bitcoin now, hold on for dear life, and by 2030, you might wake up a crypto millionaire.

But that’s not practical for two reasons. For one, it ignores the concept of portfolio diversification. Sure, you might have $63,000 to invest right now, but you’d probably want to spread that money out into a few diversified investments. Never put all your eggs into one basket, right?

Second, unless you’re already a member of the Top 1%, you may not have $63,000 to invest in crypto right now. So you’d have to come up with a strategy for building a $63,000 “starter” nest egg first. And you’ll probably need much more than that, because Bitcoin will have likely increased in price at the same time as you’re scrambling to come up with that initial $63,000.

One way to solve this problem is by using a strategy of dollar-cost averaging. Simply stated, you would commit to investing a set amount into Bitcoin, every month, like clockwork, until you reach your $63,000 goal. So, for example, you might decide to invest $1,000 per month, every month, for the next five years. That would get you close to your $63,000 goal.

Do you have a millionaire mindset?

But, alas, being a patient, long-term investor is not the only part of becoming a Bitcoin millionaire. That’s because Bitcoin is a very volatile asset, and price swings can be dramatic. Yes, Bitcoin has the potential to skyrocket in value, but it also has the potential to go on some epic portfolio-deflating losing streaks.

In fact, Cathie Wood has documented at least four different “Bitcoin drawdowns” in which the price of Bitcoin fell by more than 77%. That includes the nightmare “crypto winter” of 2022, when Bitcoin absolutely cratered in value.

So imagine a hypothetical scenario in which you had finally amassed $500,000 in Bitcoin holdings, well on your way to millionaire status. But what if the next year turns out to be a stinker, and you lose 77% (or more) of your investment? You’d be back to square one, trying to put together all the pieces of your shattered Bitcoin nest egg.

That being said, I do think Bitcoin still has millionaire-maker potential. But the table stakes have increased markedly since Bitcoin first launched in 2009. Back then, you might have been able to become a millionaire with just a tiny investment of $1,000 or less. But now, given the elevated price of Bitcoin, you might need $63,000 or more to hit that mythical milestone.