Here’s the hard truth about investing:

You always hear about the guy who made $100K by betting $100. You never hear about those who put in thousands and are left with nothing.

All of us have at least once wished we had made a similar play to the one that turned $17 into ~6M. More than 2.1 million people right now are trying to find the next crypto moonshot. Even the CEO of Coinbase is touting how if someone had bought $100 Bitcoin when Coinbase was founded, it would be worth $1.5 million today.

With all that’s going on, what’s the actual probability of getting a 100x return on your investment in the crypto world?

What are the odds that you will lose 100% of your investment?

Of the more than 40,000 coins that traded in an exchange at least once in the last 10 years, only 38% are still alive. So forget about making a profit — the probability that the coin you buy will survive over the long run is only ~ 1 in 3.

Total number of coins: 40,399 | Source: Market Sentiment Research, CoinGecko

What about 100’xing your investment?

While there are probably hundreds (even thousands) of coins that might have 100’xed in value during their brief existence (like the Hawk Tuah coin), it’s unrealistic to expect to find them and invest in them before someone rug pulls them out of existence.

To get a more realistic scenario, we kept a minimum market cap limit of $10 Million and required the coin to be present in the top 100 coins based on market cap.

The backtest is simple — At the beginning of every month (starting in 2014), we check what the top 100 most popular coins were and the probability that you would have 100’xed your investment if you held on to that coin (data here).

In the last 10 years, there were a total of 9,502 coins that fit our criteria. Out of these, only 442 (4.6%) grew more than 100x. This assumes that you sold at the very top. If you had held on to these coins to date, the number drops to 160.

So, over the holding period, the chance that you 100’xed your investment on a coin is only 1.7%.

If you remove the duplicates (as the same coin can come up in our filter in different months), of the 460 cryptocurrencies that made it into the list, only 38 (8%) grew more than 100x. If you held on till 2024, only 8 coins (1.7%) provided you with a 100x return.

If you are calculating the expected value and think that you will come out ahead (given you have a ~2% chance of 100x returns), you must read our research on Kelly Criterion.

For those who are determined to try to win, here are a few things to consider:

1. Be aware of the odds — The chance of you hitting a 100x return on your meme coin investment is less than 1 in 50. To put this in perspective, it’s like picking a specific card out of a shuffled deck of cards on your first try!
2. Spread your bets — The best way to improve your odds of winning is to survive. You can reduce your risk and improve your returns by diversifying and making smart bet sizes.