This year as many people know, has been the year of cryptocurrencies. Cryptocurrencies are digital currencies which can be used for many things, but most importantly they are built on blockchain technology which first appeared on Bitcoin the very first cryptocurrency, and this is important because not only are they designed to be secure with cryptographic hashes, but they are also a way of anonymously storing and sending money in a realm completely outside of government control.
This reason + speculation is the reason why Bitcoin went from $900 in the beginning of this year to $16k currently. That’s an insane 1600%+ gain that puts even the best performing stocks to shame. But its quite an interesting time to be alive. This is the first time a new asset class has been introduced to the public in over 100 years. We’ve always had traditional currency and real estate, then we had the introduction of stocks sometime in the 1800s, and now we have digital currencies.
Now, this astounding rise of cryptocurrency prices can perhaps be likened to a bubble, and even though Bitcoin has been called a bubble many times by the media, I think it is less like the Tulip-mania of the 1600s and more like the dot com boom of the 1990s. This bubble accompanies any new introduction of technology or assets. We saw it happen with the stocks in the 1920s, with the internet companies in the 1990s and now in 2017 with bitcoin. At some point it will crash but probably not until a year or two later.
As a result of this rapid gain, a lot of people became millionaires this year. Unfortunately I was not on of them. I first heard about Bitcoin back in 2013, but at that time Bitcoin was associated with shady things like the dark web and drug dealing. In addition you had to wire money in order to buy it and then the biggest exchange at the time Mt Gox was hacked and people lost their money, and Bitcoin crashed down 70%. This caused me to stay away from Bitcoin for the 3 years. That’s why I never thought about buying Bitcoin back in 2014 2015 and 2016 when the price was oh so cheap.
This year due to meeting a friend who was crazy about Bitcoin, I bought 10 of them at $1000 each which I thought was a lot at the time. This was back in January. Come May, BTC had reached $1600 and I sold all of it booking a nice 60% return on investment. Little did I know that it would go up to $2k. Then $3k. Then $4k. then $5k. And so on and now we are at $16k at the moment and still rising. Had I not sold, I would have been sitting on a pile of cash great enough to erase all of my mortgage.
Now looking back on it, I have some regrets but I try not to think about it too much. I could have used my $20k Walmart signing bonus (which went to useless Bittorrent stock) or my $14k Walmart severance paycheck (which went to a bank account in Canada doing nothing and actually lost money from currency exchange) to invest in Bitcoin. I could have sold my house and used some of the profit to invest in Bitcoin (making me a multi-millionaire now).
But now I realized that although I have patience when it comes to holding assets when I’m losing money, I don’t quite have the same level of patience when it comes to making profits. I usually sell too early, this is even true for stocks. So even if I had invested a lot more money into Bitcoin or other cryptocurrencies I probably would not have made as much as I would I have thought. Plus investing that much in a so called ‘imaginary asset’ is risky. Any sound financial person knows that you never invest too much money into one asset. Those people who sold their houses and put their life savings into Bitcoin took a huge gamble, even though it has paid off so far.
But I think the single biggest mistake I made this year was putting the $14k severance paycheck I got from Walmart into a Canadian bank account instead of putting it in Bitcoin. Just for reference BTC was roughly $1200 at the time. Instead I wired it to my Canadian bank where it just sat there doing nothing for 6 months. Why did I do that? Well originally I wanted to move to Vancouver by the end of this year, but plans ended up changing, and I wanted to take advantage of the USD-CAD exchange rate.
By July, Bitcoin had risen past $2000 so I wanted to transfer that money back. I couldn’t wire it back because TD Bank (my bank) only allowed international wire transfers if I physically visited a branch meaning I would have to go back to Canada to do it. I tried to open a Canadian Bitcoin exchange account to buy Bitcoin but that didn’t work; I had to prove my Canadian residency which I couldn’t do. I then tried using Paypal to do it making a Canadian Paypal account and sending it to my US account. But I made a mistake trying to deposit the funds into Paypal so I did a few currency conversions on the TD Bank website trying to get the correct currency for Paypal; neither USD or CAD worked for depositing Paypal gave me some weird error, and I lost $1000 USD converting back and worth. This is still probably the biggest waste of money I ever had. That $1000 was just gone in an instant – even if I had gambled all that money at least I could have a chance of gaining something. Nope this $1k loss was as good as throwing my money in the ocean. And it didn’t even work which was even worse. I tried also Interac debit-ing it to a Visa debit card but those don’t work with my US Visa cards (Interac is Canadian only).
So what was I left to do? I had to go back to Canada to wire it back is my only option. So in Oct I visited my family and my brother anyways and finally wired the money back but by that time Bitcoin had reached $5700 each. And then of course it kept going higher. But I’m the only person I know that instead of potentially making $50k, I *lost* $1k just keeping it in a bank account (which is supposedly the safest way of keeping your money). This is a huge financial blunder that even newbies probably wouldn’t make let alone an 8 year financial veteran like me.
And even if you missed out on BTC getting rich. There’s always millions of opportunities to make money out there at any given point. I can point to just a few I went through personally. just last month, Bitcoin cash (BCH) went from $600 -> $1800 in a few days. Bitcoin doubled in the same month. Ethereum jumped from $360 -> $470 last month. Litecoin went from $60 -> $100 and almost doubled again to now $180 just a few days ago (and now its $340 at time of this second revision). I also invested in this coin called Vertcoin (VTC) which exploded from $6 to $10. And thats just a few coins out of hundreds. That’s not counting the stock opportunities at play of which marijuana stocks / coins exploded as well. Don’t feel bad about missing the Bitcoin train. There’s lots of trains out there, just gotta find the ones that launch the fastest and if you put a little bit of money into each one its almost certain you’ll find at least one that will launch.
And another thing is would becoming a millionaire really change much of my life anyways? Sure I wouldn’t have to work next year, or think about how to live in Korea without working, but I think the important thing is money can’t buy happiness, it can only be a stepping stone to getting there. Back in 2012, I rented a small one room apartment in San Francisco, with no car, no scooter, no TV, one laptop and one phone and I would say that I was happier then than I am now, even though I live in a San Francisco high rise, and have too many electronic gadgets to even count. I don’t think having that much more money would even change me that much. I would probably give away alot to my brother and family.
So all in all, yes I could have had a chance to be a Bitcoin millionaire this year – but even though I’m not, I still managed to make back the losses I had last year from gambling, and I am still financially stable and reasonably satisfied with my financial situation right now and that’s whats important I suppose.