A recent report from Henley Global into crypto wealth showed that there are only six Bitcoin (BTC) billionaires in the world. That's just six people who hold over a billion dollars worth of Bitcoin on the entire planet. When you think about the amount of hype around crypto, six Bitcoin billionaires really isn't a lot.

The report also says that the total value of the cryptocurrency market is $1.2 trillion. That's a drop in the ocean when you compare it with other assets. For example, the World Gold Council puts the market cap of the gold market at around $12 trillion. Last year, State Street Global Advisors said the total value of all investable assets was a whopping $179.0 trillion.

Some might argue those figures show the huge potential of crypto -- right now, it accounts for less than 1% of the total investable assets. Just imagine what might happen if it could take even a slightly bigger chunk of that pie. But the opposite could also be true. Perhaps crypto just isn't that big of a deal in the grand scheme of things.

What is a Bitcoin billionaire?

There are different ways you can define a Bitcoin billionaire. The report looks at people who own a billion dollars' worth of Bitcoin. But at one point in 2021, the same label was used for people who made their billions in crypto. The study, which also counts a total of 22 crypto billionaires globally, doesn't say how any of them came by their wealth.

It's certainly true that the net worth of several of the high profile crypto billionaires has significantly diminished since the crypto frenzy we saw a few years ago. In 2022, Forbes said there were 19 billionaires who'd made their money through crypto. That included Sam Bankman-Fried, who has since fallen from both rich lists and popular favor faster than an ice cream melts on a sunny day.

Indeed, according to Forbes, this year, 10 of the 19 are no longer billionaires. And their collective wealth has fallen from $140 billion to $30 billion. That $110 billion drop is partly a reflection of the drop in crypto's value. It's also due to the collapse of several crypto platforms, including Bankman-Fried's empire. Bitcoin has mostly hovered between around $20,000 and $30,000 this year -- significantly down on its high of around $67,000 in November 2021.

Is crypto becoming irrelevant?

It is interesting to look at crypto billionaires. But, for the most part, they can handle losing money on a risky asset like cryptocurrency. It's the ordinary investors like you and me who may not be able to stomach the losses. Given that Henley & Partners report puts the number of crypto users at 425 million, that's a lot of people who could take a significant financial hit if crypto collapses.

The dramatic drop in crypto prices and collapse of several crypto platforms has been accompanied by a significant decline in both consumer interest and confidence. Many investors who had money on now-defunct platforms now await the outcome of what could be lengthy bankruptcy proceedings to see if they will get their money back.

As an investor, the current crisis of confidence is one thing. The bigger question is whether Bitcoin and other cryptocurrencies could perform well in the long term. And, given that cryptocurrencies are extremely risky, the related question is whether there are other, safer, assets that could perform as well or better over time.

For cryptocurrency to stay relevant and reach its potential, it needs to overcome a number of challenges. Putting aside the regulatory and confidence issues, there's still a long way to go with the actual nuts and bolts of crypto. For example, if it's to become more widely adopted, crypto needs to be as easy to use as email or online banking. It needs to become more widely accepted as a payment method. There are also issues of scalability, congestion, and network fees to address.

There are many different investment opportunities

I hold Bitcoin and other cryptocurrencies, and I plan to hold them for the long term. Bitcoin could have significant potential as a digital currency, particularly when it comes to global settlements. I also think smart contract cryptocurrencies could be transformative in a number of ways. However, there are no guarantees and it is still early days. Even if the cryptocurrency industry as a whole succeeds, the coins and tokens that are popular right now may not.

Unless you're a billionaire with money to burn, the biggest takeaway is this: Don't count on crypto to make you wealthy. It can play a part in a wider portfolio, but only a small part. If you want to build up a nest egg for your old age, consider opening a brokerage account. Making consistent investments over time into a balanced portfolio that contains a mix of assets is a proven way to build wealth. If you're not sure where to start, check out The Motley Fool's guide on how to invest in stocks.

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