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Thoughts from a New Crypto Investor via Reddit

So about two weeks ago, I noticed a news article on my phone about crypto currencies. I had known about bitcoin years earlier because my brother at one point had a few thousand bitcoins that he lost his private key to. I remember that at that time they were worth over $100K and to say he was bummed would be an understatement (I haven’t asked him how he feels now that Bitcoins are hovering around $2.5K, now he would be a millionaire lol. Anyways, at that time, cryptos were only being used by people doing illegal stuff on the internet and although the rapid appreciation and insane volatility interested me, I didn’t see the long term utility of such an investment and assumed that it was a passing fad. Flash forward a few years, looking at the charts of bitcoin and all the major altcoins, I got the sneaking suspicion that I had missed out on an amazing opportunity (after reading about it I don’t think missed out is the right word now, although I definitely didn’t get in as early as I should have).
I spent about a week reading everything I could about cryptocurrency. I scoured white papers, news sites, and reddit to find out everything I could so that I could begin to understand this industry. After about a week, I decided that I was going in. I liquidated some of my stocks and wire transfered about $20K to Gemini, an amount that I could afford to lose, but nonetheless would sting a bit. That said, I’m only 31 years old and have a decent job in the finance industry and other investments so it wouldn’t kill me either. I bought some Bitcoin and Ether and then I transferred that out to Bittrex and a couple other changes to make some smaller plays. I made decent bets on Ripple, Antshares, Waves, and Strat ($1K to $3K). I placed smaller bets (around $400-$800 each) on Litecoin, Lisk, Monero, Game Credits, Maidsafe. Then, I threw in between $100 to $300 on about 10 other alts.
I thought that I had bought on a dip because the charts were showing a lot of red the day or two before and within a day my $20K had turned in to $21.5K. However, then things started slipping. I slowly watched my $21K go down to $20K, then $19K, then to just under $18K where it stands right now. I’ll admit that it’s a little bit nerve racking watching your funds slowly evaporate before your eyes (Blockfolio makes it too easy lol). However, going into this I was well aware that I would be in for a wild rollercoaster ride.
I’m a gambler by nature. When I was in college, online poker payed my bills. I read as many books as I could about it and got to understand the game pretty well. I played 20 or more tables at a time utilizing both Poker Tracker (recorded and overlaid a number of stats on every player) and No Limit Foldem (automatically folded all my crappy hands). It eventually got shut down and I lost tens of thousands of dollars on Ultimate Bet and Full Tilt (although a few years later I got my Full Tilt money back). Unfortunately, the majority of my money was on Ultimate Bet, which had been operating like a Ponzi scheme so I never got a cent back. I see parallels between keeping money on a shady poker site and keeping crypto on one of these shady exchanges (although Bittrex seems to be the best bet in terms of security and reliability from everything I have read) so I have transferred most of my funds into various wallets and am waiting for my hardware wallet that I ordered. In any event, being a gambler, I look at crypto in terms of EV (Expected Value). If you believe that an investment/risk/gamble has a positive EV and the loss of your initial investment wouldn’t kill you, then you should strongly consider making the investment.
For me, the way I look at it is like this. This industry is in its infancy. It has the potential to disrupt world financial markets and also hedge against losses from multiple destabilizing fiat currencies. Plus, if you hold crypto, you can go anywhere with your money. You are no longer constrained by borders (try bringing $20K cash when you’re boarding an international flight and you will quickly see what I mean. If your currently holding currencies suffering from hyperinflation or from countries in turmoil like Brazil, Zimbabwe, or many other African or European countries, suddenly the risk of Crypto seems to be far less than holding your countries currency. Plus, blockchain technology is completely game-changing. I’m not even going to get into that in this post because I am already rambling on and on, but I truly believe that we could be at the launching point for a multi-trillion dollar market cap industry. Yes, many governments are not going to be happy about the loss of control and may implement various regulations, but I am confident that the crypto community will survive and thrive throughout all the turmoil and bumps in the road. You can’t roll this snowball back up the hill as there is way too much momentum now.
So back to my comment about EV… I’m going to oversimplify this a bit. Let’s say that you have $20K to invest and you thing that realistically, it has the potential to be worth $1M two years from now. Let’s give it a hypothetical 20% chance that it will be worth $1M and an 80% chance that it will be worth $0 at the end of that period. ($1,000,000x.2) +($0x.8) yields an expected value of $200K. Since that $200K is well over my initial investment of $20K, it is a no brainer to me. And I think that both the 20% chance and the $1M I use in my calculations are very conservative. I believe that there is a substantially higher chance that my funds will be worth well over $1M a couple years from now.
And I think as more people like me who see information about crypto in mainstream news sources and are intrigued by the rapid appreciation and actually do their research on crypto companies, we will see money pour into this space at a rate nobody can imagine causing the market cap to expand to previously unimaginable levels. The naysayers simply don’t understand the potential for this market. Their thinking is one dimensional and they can’t handle the risks involved. Do I believe we are in a bubble that is about to burst, NO, I truly do not. Could it become a bubble at some point, sure it could, but I believe that right now, we are at a launching point for a new industry that is in its infancy. I honestly have never been as excited about an investment opportunity as I am right now (even though I am currently down a couple grand at the moment). Will there be market corrections and selloffs along the way that have people screaming bubble everywhere you look. Of course. But this industry has so much room and potential to grow and it’s going to completely change the way that companies and individuals conduct themselves (on a level not seen since the creation of the internet).
Is it insane that people are pouring their hard earned funds into ICO’s, potentially allowing the founders to walk away with millions if they are unscrupulous. Yes, it’s crazy, but that’s what happens when so much money has been made so easily and people have seen some ICO’s (think Ether) appreciate by 10,000%. It’s a lottery/ gold rush mentality. I like the idea of ICO’s, although there are certainly lots of them that are scammy so definitely do your research before investing. I just invested 1 ETH in a startup called Sun Contract. The ICO just started yesterday and I feel like this company has a lot of potential, plus renewal energy is the way of the future. I know that it probably has a better chance of going bust then succeeding, but the potential to get in on the ground floor of a company that could blow up in an industry I love was just too much to pass up.
In conclusion, do I wish that I waited to buy in? YES, of course. I could potentially have more tokens now buying in at this point due to the dip. Am I going to give in to fear and sell off because the market took a dip which caused me to lose a few thousand dollars? Hell no! I am in this for the long-term. I may buy new assets and reallocate some of my holdings at the future, but I see no reason to sell at this point or really any point. The market could turn just as quickly and I could easily be back in the green next week. Even if my holdings lost 75% of the value, I’m not selling. Hell, I realize this is an insanely risky investment and there could be factors that I am not taking into consideration. But with that said, I truly believe in this industry and when you push out your investment horizon in a volatile industry like this, your risk gets smaller and smaller. All it’s going to take is for one or two of the companies that I have tokens with to take off (hoping Antshares since that is my largest investment at this time) and I will have way more than the $20K I put in! I wish everyone else saw this industry the way I do. Then, we wouldn’t be seeing these massive sell offs and the markets would stabilize. Good luck all. I hope that all you folks who are currently in the industry get rich. I really suspect that if you invest in the right companies, you will.

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Categories:   Tales From The Crypt

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