Cryptocurrency began as a vision of electronic cash that could be sent to one party to another without the need of financial institution. Today, coins like bitcoin have transformed into an investment asset, and that shift has made a lot of people very rich along the way.
Forbes recently put together a ranking of “The Richest People In Cryptocurrency.” Much like the Forbes 400 of the world’s overall richest people, this list attempts to identify the individuals who raked in the most wealth during the advent of cryptocurrency. Going down the list, it’s obvious that most of the people included didn’t simply amass their fortune by trading tokens on exchanges.
Here are the different avenues these cryptocurrency moguls took to get to where they are today and how crypto-enthusiasts could follow in their footsteps.
1. Coin Creators
This is a natural place to start. The people who created some of the world’s leading tokens, like ether or XRP, have propelled cryptocurrency trading to what it is today.
“Altcoin” is a term that refers to an alternative token to bitcoin — the world’s most popular cryptocurrency. Bitcoin started back in 2009 and the first altcoin — Namecoin — debuted in 2011. Today there are more than a thousand altcoins to invest in.
People like Chris Larsen, a cofounder of Ripple, and Vitalik Buterin, the founder of Ethereum, led the push to give investors more options in the sector.
Larsen’s theoretical net worth was as much as roughly $60 billion at the height of the recent cryptocurrency boom, though is actual value is probably closer to $8 billion. Buterin is worth roughly $500 million.
2. Exchange Founders
Cryptocurrency exchanges like GDAX and Binance have actually been around for a while. Back in 2004, three Australian-based businesses started digital currency trading websites, but they were shut down the Australian Securities and Investments Commission (ASIC) because they didn’t have license to provide financial services.
With the exploding popularity of cryptocurrency came the huge demand to buy and sell tokens like stock. Today there are almost 200 exchanges that investors can trade on, according to CoinMarketCap.
Changpeng Zhao, the CEO of Binance, and Brian Armstrong, the CEO of Coinbase, are some of the few that have made buying and selling digital currency identical to the stock market. They have made about $2 billion and $1 billion respectively.
3. Investment Funds
The exploding popularity of the blockchain — the underlying technology of cryptocurrency — has ushered in a new era of investment funds that focus on building businesses around it. Venture capital giants like Tally Capital and Digital Currency Group offer guidance and financial services to young companies looking to make it in the world of cryptocurrency. Their respective CEOs have net worths of approximately $1 billion and $500 million.
4. Individual Investors
This is a side of cryptocurrency where it takes money to make money. Investors that have made a fortune just by trading coins either got involved in the sector early on, or they shelled out a ton of cash to make up for lost time.
The most successful individuals in this category are the Winkelvoss twins, who straddle both categories. They invested $11 million — hardly pocket money — way back in 2013, which became worth more than $1 billion in early December.
Matthew Mellon, an early investor of Ripple’s XRP token, is another perfect example. He’s an heir to one America’s biggest banks and took advantage of his wealth to go out on limb and invest in XRP, despite warnings from family and friends. Mellon now has an estimated net worth of $1 billion.
While Mellon’s story is every cryptocurrency investor’s dream, remember that his success is a result of already being wealthy and investing at the right time.
You’ve read that, now watch this: “How Ripple Works”