How I lost all my money in Crypto
Cocky, overconfident and stupid
In 2017, I invested everything I had into Crypto. I didn’t have much. But I was all in. As you can probably guess from the title, things didn’t go so well.
For the first couple of months I was ecstatic. Prices kept going up. I was making more money in 24 hours that I had ever made in a regular job.
I began watching crypto youtubers “explain” how various coins worked. I bought into the hype completely.
I told my friends to buy Crypto. “You don’t want to tell your grandkids you missed out, do you?”
I’d go onto coinmarketcap several times a day and check the price. Was BTC up in the past 24 hours? Was ETH up in the past 24 hours? What about my Alts? Should I buy the dip?
I threw all caution to the wind.
I began lecturing people on how the blockchain works. I didn’t understand what I was talking about. And yet I would tell people how the distributed ledger system would revolutionise the monetary system.
Somehow I had convinced myself that I knew what I was talking about.
Then it all went to shit. The entire crypto market fell. Sharply first. Then it stabilised for a while. Then it fell faster and faster.
I distinctly remembering logging into my porfolio tracker at one point: I had lost nearly $7000 in 24 hours. That is so much money.
Aside from that number, I don’t remember exact figures and stats. It was all a blur. I remember the prevailing color of red. I would wake up, check my portfolio and see a sea of red.
But for some reason I didn’t sell. I definitely panicked. But I didn’t sell. I continued to HODL.
In my mind I thought I was being smart. But in reality I didn’t want to be proven wrong. By holding on I still had hope. I told myself: “Maybe a year or two from now I’ll be back in the green. Then I’ll show them.”
I didn’t really know who ‘they’ were but I was going to show them anyway.
A year later I sold.
I had lost more than my original investment. But more than that I was very publicly wrong about something. I felt humiliated. I got angry when people would bring up crypto in conversation. I’d desperately try to change the subject.
The market had taught me a valuable lesson. But at the time I was too stubborn to see it.
The reason I write about this is because I think there may be a reckoning coming to Crypto currencies soon. I’m still a believer in them long-term, but I don’t want to see anyone get burned in the same way I did. Please don’t delude yourself.
Very few people really understand what’s going on here. This is still a very nascent space.
You might think you understand ETH, but do you really? Could you explain it to a 5 year old? I’m not judging here. I’ve been researching this for a long time and I still don’t think I get it.
I think Naval puts it best. He said something along the lines of this shouldn’t be more than 2% of your portfolio. And you should try to invest through funds. Holding the crypto yourself is very risky. Exchanges get hacked. Online wallets aren’t that safe. ̶E̶v̶e̶n̶ ̶s̶u̶p̶p̶o̶s̶e̶d̶l̶y̶ ̶”̶s̶a̶f̶e̶”̶ ̶s̶o̶l̶u̶t̶i̶o̶n̶s̶ ̶l̶i̶k̶e̶ ̶L̶e̶d̶g̶e̶r̶ ̶X̶ ̶g̶e̶t̶ ̶h̶a̶c̶k̶e̶d̶.̶
Look, I’m not here to tell you what to do with your money (and this is not financial advice). Just please don’t delude yourself in the same way I did. Because after all:
“The first principle is that you must not fool yourself and you are the easiest person to fool.” — Richard Feynman