First of all, I’m your average Joe. I’m not an entrepreneur, I’m not a trader and I’m not a developer. I’m a guy who was in a job I hated, in a town I wanted to leave and relationship going southward and by a few leaps of blind faith, I found myself stumbling into the right place at the right time.
I had heard of Bitcoin before. I couldn’t tell you when or where but it was a word I was familiar with. For some reason, it had never really turned my head or caught my attention until I took a break from my stagnant career and embarked on a journey across the world.
December 12th, 2016 is a date I’ll never forget. Somehow I had ended up in Brisbane, working a cash-in-hand job for an old Australian woman with a German kid who had asked me to help him out. We talked as we worked and our shared affinity for technology and gaming had steered our conversation towards him uttering, for the first time, the name ‘Bitcoin’. He had a story about a friend who had made thousands of euros investing in the cryptocurrency.
That piqued my curiosity.
After a few days of heavy research, I was well and truly swept up in the enthusiasm of the crypto crowds. It was hard not to be. The technology is a stroke of genius and I have now grown to agree more and more that it will revolutionize the way we spend money and execute transactions. But I can’t lie – what kept me motivated at the time was the profit people made.
Without delay, I was in. I dipped a toe with a couple of hundred dollars. The value went up, I put more in. Up again, I put more in. It wasn’t skyrocketing but it was enough to get me excited.
Then came an “altcoin” called Ethereum. A name I had seen sat beside Bitcoin on the Coinbase app whenever I logged in. By now I knew there were many coins in the crypto space but it was only then that I realised Ethereum must be listed alongside Bitcoin for a reason. SOMEBODY must believe it has potential. A few more heavy research days and I took everything out of Bitcoin and into Eth. Being hailed by certain groups online as the next Bitcoin I saw an opportunity to catch the train before it left the station… And it did exactly that.
Over the next six months, I had made more money than I had ever had in my life. A 3600% gain on my entire life-savings. “This must be what it’s like to earn a seven-figure salary” I was thinking to myself as I watched thousands of dollars roll into my portfolio daily, sometimes hourly. They say money doesn’t buy happiness but I can tell you I was pretty damn happy in those moments.
But suddenly, it all went downhill from there…
Lesson 1 – TRADING
Don’t do it. It’s as simple as that.
Ethereum had plateaued after its rally and the whole period felt like an eternity (in reality it was just a month or so). I had gotten used to my rapid gains and, being greedy, I wanted to keep it up. After watching hours upon hours of Tradingview charts, I was convinced I could trade the ‘obvious’ rises and falls.
The truth is that trading works until it doesn’t. Even if you think you can identify patterns, sooner or later it catches you out and you lose. Granted, it might not be a big loss if you have a stop loss in place but everyone loses at some point.
I actually started well, the patterns were playing out as expected. Until a sudden bout of bad news hit the cryptoverse and everything was thrown out of my neat patterns and lines. My losses got bigger and bigger, and in emotional knee-jerk responses to recoup those losses I made more losses.
I have no doubt that people can, and do, trade successfully and I even think TA has some merit, but I quickly found out that I am an emotional trader. And that is absolutely a recipe for disaster. Especially when crypto swings so violently and so rapidly that you don’t have sufficient time to analyse the charts.
It also never sleeps. I wasn’t working and I still couldn’t keep up with it. I had alarms set for movements that would wake me up in the middle of the night. Holidays were ruined, weekends were gone. It was one of the most stressful times of my life and it cost me half my stack, which, trust me, went very quickly in just a few trades.
My logic was that I could make a living wage off even 5% of the moves if I traded enough coins. But now I realize that was incredibly stupid, no matter how much time, research and analysis you throw at it.
Trading is enticing, I get it. And if you absolutely must try it then just use a small percentage of your stack. But long-term it very rarely pays off. You will hear very contradicting opinions about TA online, as I did. As someone who has personally lost a depressingly large amount of money trying to trade, I can confidently tell you that 99% of people will make more money by just holding onto their coins. I certainly would have. Cryptocurrencies are rising so fast right now that there is absolutely no need to trade. Just be patient.
There’s a reason why this quote gets thrown around the crypto space so often:
“Time in the market beats timing the market.”- Warren Buffet
Lesson 2 – ALTS AND ICOS
I was stubborn so I didn’t want to stop there. In my attempt to recoup my trading losses, I diversified. I invested in altcoins.
This can work if you exercise due diligence and complete a lot of research, but with such hype surrounding the market now, it’s pretty fair to say that a lot of altcoins are massively overvalued off of pure speculation alone. They’re essentially startups that have raised way more money than they actually need to achieve what they have set out to accomplish.
I’ve also had a lot of friends who are new to the world of cryptocurrency telling me that they are going to buy XYZ coin because it’s valued at cents rather than hundreds of dollars. They’re obviously wanting to accumulate a lot of cheaper coins in the hopes that they’ll skyrocket to a similar price to Bitcoin or Ethereum one day and make them their fortune. This is a huge trap to fall into and highlights why research is so important.
XRP (Ripple) is valued at $2.36 as of writing this, but its market cap is actually higher than ETH’s right now because it has a lot more coins in circulation. To put it into perspective – there is literally not enough money in the world to get Ripple to ETH’s current price of $711. It won’t happen.
95% of altcoins will probably fail. When there are some very clear frontrunners in this race, why risk your investment money when the big players are showing no signs of slowing down? As of today, I have made even more losses on my altcoins and missed out on massive gains with Bitcoin and Ethereum.
It’s too easy to let the jealousy get a hold of you. You want to replicate the massive gains that your friends or peers are bragging about, which I understand, but it could cost you dearly if you rush into any off-the-cuff decisions.
Firstly, cryptocurrency is easily manipulated. Obviously, by wealthy investors making waves in the prices but also in social media. Fake accounts are easily created to shill projects or spread doubt online. I’m a frequenter of the FunFair token subreddit and a couple of nights ago, in the space of a few hours, the subscriber count went from around 4,300 to 10,500 followed by a flood of new accounts claiming to have been hacked and subscribed without their knowledge.
Secondly, you could be following your peers way too late into the surge. Remember that they can weather a 50% drop after their 100% rise as it’ll just eat into their profits. Plus it’s well-known that there are pump and dump coordinations going on with the sole aim of suckering naïve money into chasing a climbing coin just to drop it all on them. I witnessed Metal once climb 95% and back down as much within half an hour.
A friend of mine once got in on an altcoin right before it shot up by about 1500%. Somewhere around the top, he had convinced a few other friends to invest and the coin has been going down by large amounts ever since. Now, I’m not saying the coin will fail to eventually hit its high again, or even surpass it, but for the past few weeks, the stress has been very real for them.
I’ve had a lot of family and friends asking me about investing in cryptocurrency since the start of my journey and now, I make it a point to explicitly tell them to not invest and instead, just direct them to the necessary reading materials so they can make their own informed decisions. If they still want to invest then I suggest they throw in money they would have otherwise spent on beer, cigarettes or gambling rather than their entire life-savings. It worked out well for me but I’d never encourage others to do it.
All this reminds me of one word- hold.
Lesson 3 – HOLD (HODL, FOR THE MEMESTERS)
Be patient. If we’re in a dip or a crash or a long-term bear market then try to forget about it. As long as you haven’t invested more than you are comfortable with and you believe in the fundamentals of your chosen coin, then all you need is faith. Focus on something else. If there’s ever a huge crash, my peace of mind comes from knowing that if it can drop this fast then it can rise just as fast. Tomorrow could bring massive gains. Crypto isn’t going anywhere, the technology is too good.
If you are going to hold and you’re pretty confident in your portfolio, then you might also be wise to just treat it like any other investment and only check on it once every few weeks or so. It’s very easy to get sucked into chart-watching with crypto, which can be harmless and even really exciting sometimes, but during downturns, it can really throw you into unnecessary low spirits when the price could climb back to where it was, or even higher, by the same time next week.
FINAL lesson
If you are losing money and you’re getting stressed, anxious or obsessive then please don’t be afraid to take a loss. I’ve been down that road and I can’t tell you how much relief I felt when I finally ‘called it a day’ and accepted my losses. The stress was absolutely consuming me and permeating my everyday life and it was just not worth it and it will definitely pass.
I’ve come to terms with the money I’ve lost and now I just thank God that I stopped and didn’t dig that hole any deeper. Your situation could ALWAYS be worse and there are probably many people out there who are experiencing just that. I still take profit here and there because it dawned on me that it was completely insane for me to be worrying about everyday expenditures when I had crypto gains I wasn’t even enjoying.
You may also experience grief or regret in selling a coin before it “moons” or losing them in a botched transaction or exchange (which is surprisingly common), but you should NEVER regret taking profit when it was the right time for you and you should never mourn the loss of gains you either never had or never cashed out. Hindsight thinking can be toxic.
There’s a lot more to life than crypto and money. Walk away for a while, enjoy the things in life that crypto had been stealing your attention from, and, if nothing else, you can take away a great amount of pride in having the foresight of being an early adopter of such a world-changing scene.
Remember:
Without people like you or me, cryptocurrency would never have been where it is today.
There have been known cases of people feeling deeply depressed or even suicidal from losing money or selling “early”. Please, if you’re struggling, then contact a family member, or someone you know and trust, and talk to them about it. You’ll quickly realize that that person is way more valuable to you than any amount of money would be.
So, I wish you luck on your crypto journey! It really is one of the most exciting investments of our time and the experience is one hell of a ride. I hope this text helped and you can learn something from my mistakes.
I’d be sipping long island iced teas on a yacht right now if I hadn’t been such a greedy ass. Don’t be me!
What do you think about my Bitcoin fortune? How has your experience with Bitcoin been? Leave a comment and let us know!
Feature image by Glenn Thomas