I turned £500 into £10k with these 4 rules – anyone can do it

BITCOIN has smashed astonishing record highs this year making some bold investors very wealthy – but it doesn’t come without risks.

Take dad Ally Spicer, 42, for example – who has turned an original sum of £500 into £10,000 through investing in the cryptocurrency but he nearly lost it all. Twice.

His success comes as Bitcoin has seen its value increase five-fold since the end of 2020 to hit £77,124 ($100,000) at the start of this year.

The cryptocurrency is a relatively new type of investment which was only created in 2008, and some seasoned investors are doubtful it’s anything more than a flash in the pan.

Still, it shows no sign of disappearing from the scene anytime soon with more than 1 in 10 adults now trading Bitcoin in the UK.

The Financial Conduct Authority found that a growing number of adults in the UK hold cryptocurrency, up from 4% in 2020 to 12% in 2024.

For Ally, his investments are now worth more than £10,000 from an initial investment of £500.

He first bought into the investment phenomenon back in 2017.

But while he’s made a tidy profit, it’s not been smooth sailing for the dad of two, who works in digital marketing.

Here Ally reveals the valuable lessons he has learned from investing in the cryptocurrency over the past eight years…

Prepare for the crash

A friend first told Ally about Bitcoin eight years ago, citing it as a way to potentially make some extra cash.

At that point the currency was worth around £3,000 ($4,000) per Bitcoin.

Since then, the value of the cryptocurrency has undergone a series of dramatic highs and crashes.

For example, if you bought at the £77,124 ($100,000 peak) earlier this year, you’d have already lost around 10% as Bitcoin has plunged back down to around £69,400 ($92,483).

I thought I was a financial genius but I didn’t sell and it crashed to less than what I bought it for. At that point, I thought I’d missed my opportunity and forgot about it

Ally Spicer

Ally says that investing has been a white knuckle rollercoaster ride for investors.

He told The Sun: “Back in 2017 I was aware of the technology and I was interested in the chance to make money, so I decided to invest around £500.”

Later that year the cryptocurrency shot up to nearly £15,300 ($20,000).

Ally said: “I thought I was a financial genius but I didn’t sell and by the end of 2018 it crashed to less than what I bought it for.

“At that point, I thought I’d missed my opportunity and forgot about it.”

Ally didn’t think much about the investment for a couple of years.

Then in 2021, he started seeing headlines about new record highs for the cryptocurrency and was ecstatic when he realised that the price had shot back up again to around £52,600 ($69,000).

However, it was not long before it crashed back down again in 2022 to £13,000 ($16,000), and he decided to cash in around half his investment.

In 2023, he started reinvesting what he had sold and added a further £500 but has been selling again this year.

He now plans to use the cash to buy treats for his family, such as holidays.

So far he has sold £1,000 worth of his investments off and used it for a trip away at half term to Disneyland Paris.

‘It’s highly volatile’

It’s important to understand where you’re putting your money with any kind of investment – and Bitcoin is no different.

You’ll need to read up on the risks, as well as potential rewards on offer.

Ally said: “I’ve spent a lot of time reading books and listening to podcasts on crypto.

“It is risky. It’s not an easy way to make money, you need to do your own research, as it’s highly volatile.”

I’ve only put in what I can afford to lose

Ally Spicer

If you don’t understand how an investment works, it’s never a good idea to part with your cash because you could be caught out later down the line.

Speak to a trusted independent financial adviser if you don’t know where to start.

You can ask friends of family if there is someone the would recommend or look on a site such as unbiased.co.uk.

As well as having sound knowledge of Bitcoin, you should also understand your own appetite for risk as this can help you understand whether investing is a good idea for you.

Only invest money you won’t miss

As with any investment, there are no guarantees, and anyone who invests in Bitcoin could find the value falls and they lose money.

The cryptocurrency is particularly volatile which means there are very sharp changes in value.

Ally said: “If the value of Bitcoin crashed to zero tomorrow, I’d be annoyed but it wouldn’t be the end of the world.

“I’ve only put in what I can afford to lose.”

If you feel ready to start investing, start out with small amounts that you could cope without if they were to disappear for ever.

Prioritise your wider finances

Ally was in a good financial position to invest in Bitcoin as it was disposable cash he was using to buy the investment.

He already owned a home with his wife and had enough in cash savings too.

Ally added: “If I was saving for something important or needed every spare penny, I wouldn’t have put it in Bitcoin.”

Any kind of investing should only be done when you have a pot of ‘rainy day’ cash savings in place that you can call upon in an emergency.

As a general rule of thumb, you should have between three to six months worth of income in easily accessible savings.

It’s also a good idea to make sure any debts are paid off before investing cash so that you are not losing cash on costly interest charges.

If you haven’t invested cash previously, you may want to start out on more traditional investments through a stocks and shares ISA.

Although they can fall in value, there is a greater track record of them rising in the long term.

Laith Khalaf, head of investment analysis at AJ Bell, said: “The Bank of International Settlements estimates that around three quarters of Bitcoin buyers between 2015-2022 were likely to have lost money, despite a huge rise in the price of the cryptocurrency.

“This is almost certainly because they got sucked in at precisely the wrong time. ‘FOMO’ (fear of missing out) is not an investor’s friend.

“Bitcoin doesn’t have any earnings and doesn’t pay an income, so price action is largely driven by sentiment.

“If you buy some, you’re relying on someone paying more than you further down the line to turn a profit.”

Watch out for scams

Fraud and scams are also a major problem for the crypto industry.

Ally explains that he’s had fraudsters try to contact him over social media pretending they had opportunities for investing.

In some cases, scam artists can convincingly pose as genuine crypto influencers or investors.

You must also make sure that you protect your crypto wallet.

Ally said he always uses two-step authentication which adds another layer of security to his investments.

A recent ‘mega theft’ of $1.19 billion crypto assets from a wallet held on the Dubai-based Bybit exchange is illustrative of how vulnerable your cash can be.

There is also less regulation in the industry which means if something goes wrong you are unlikely to get any of your money back.

The Financial Conduct Authority is starting to introduce more regulation in this area and is responsible for regulating cryptoasset promotions.

In the year since 2023, the regulator said it had taken down over 900 scam crypto websites and over 50 apps, which gives you a flavour of how rife scams are in the market.

What is Bitcoin?

Bitcoin is a type of cryptocurrency that was created in 2009 by an unknown person or group of people.

There is a finite supply, which has helped it to hold its value among investors – in a similar way to gold.

Bitcoin now ranks within the top ten most valuable assets based on its market value (capitalisation) – above company giants such as Facebook and Netflix.

Cryptocurrencies differ from physical currencies, such as the pound.

They are created using blockchain technology and part of their appeal is that they are not controlled by governments or a central bank, such as the Bank of England.

It means the currency can be used to transfer wealth outside of the traditional banking system, making it easier to cross borders or stay anonymous when moving wealth.

Bitcoin is the leading cryptocurrency but its rise has helped other cryptocurrencies also grow in value, such as Ethereum.

In recent years, more mainstream companies and institutions have invested in cryptocurrency, and part of the recent rise in value is based on President Trump‘s favourable views on cryptocurrency.

What will happen to the price of Bitcoin?

People who have made money from Bitcoin have quite simply sold the currency when the price is higher than what they paid for it.

However, it is impossible to predict exactly when the price will rise and fall.

Wider world events can impact the price of Bitcoin, as well as market changes such as different regulations.

The most recent price increase and subsequent fall has followed the incoming administration of US president Donald Trump.

Susannah Streeter, head of money and markets, at investment platform Hargreaves Lansdown, said: “Crypto mirrors broader investor sentiment which has taken a hit due to Trump’s renewed vows to impose tariffs on trading partners.

“The absence of more regulatory support from the new administration has also been greeted by disappointment.

“While sharp falls in digital coins and tokens aren’t unusual, the losses this year have been painful, and it’s a reminder of the ‘wild west’ nature of the crypto industry.”

In the past, the price of Bitcoin has been pushed up by steps towards greater regulation in the market and signs that crytocurrencies are becoming integrated into the mainstream.

Laith Khalaf from AJ Bell said: “The ultimate outcomes are pretty binary for Bitcoin. Either it becomes an accepted part of the financial furniture and a valuable asset, or it ends up on the rubbish heap.

“The price volatility partly reflects the ongoing battle between these two possible and polarised visions of crypto’s future. It’s impossible to predict with a great degree of confidence which will prevail.”

How do you invest in Bitcoin?

If you feel ready to take the risk there are different ways to own Bitcoin.

You can’t invest directly into Bitcoin funds through stocks and shares ISAs, as you do with other traditional investments, due to regulations in the UK.

Jason Hollands, managing director at platform Bestinvest, said: “It is not currently possible to invest in Bitcoin or other crypto assets directly through tax-efficient accounts like ISAs or pensions.

“The UK regulatory authorities have taken a cautious approach to crypto due to its highly volatile and speculative nature.”

Instead, specialist trading platforms such as Coin Bureau or PlanB allow you to hold Bitcoin, other accounts do not allow spending but give you ownership of the currency as a financial asset.

Jason added: “Potential customers should do their research as to whether and how the provider is regulated and whether their holdings will be ringfenced in the event the firm should go under.”

You can also get some exposure to Bitcoin without investing in the currency directly and instead focusing on companies in this market.

Ed Monk, associate director at investment firm Fidelity International, said: “For those who really want to ride the crypto wave without buying the currency itself there are options.

“You could consider proxies for Bitcoin, such as companies that invest in it or companies that enable trading in cryptos.

“One of the more popular proxy options for UK investors has been to buy shares in MicroStrategy, a US software and data company that has a declared strategy of buying Bitcoin.

“It is a ratcheted play on the biggest cryptocurrency – a riskier way to back a risky asset. Others have chosen Coinbase of the US, a platform for buying and selling cryptocurrencies.”

There are also tax implications of investing in Bitcoin and other crypto currencies which you should be aware of.

You could have to pay Capital Gains Tax when you cash in profits worth more than £3,000 related to investing.

With traditional funds and investments, you can avoid this tax by holding them in a Self Invested Pension Plan (Sipp) or stocks and shares ISA.

Ed added: “It’s a safe bet that HMRC will be more focused on crypto as a growing source of tax revenue this year and in the years ahead.”