Lessons Learned in Crypto Investing

I want to share some of the lessons I have learned in the year and a half investing in cryptocurrencies. Though I have made some money investing in this space, I could have made quite a lot more had I adhered to some strategies. Hindsight is truly wonderful and I am sure I have still more lessons to learn investing in crypto assets. I think by discussing these lessons in the form of stories they will resonate more with readers of this post and thus they can learn from my mistakes.

In December of 2016 I had just begun investing in Bitcoin through Coinbase when I noticed that a coin called Ether was also available. I read up on Ether and Ethereum and was drawn to its strategy of being an open blockchain that could be used by other companies and people to run their own projects on the Ethereum blockchain. At the time there was controversy with the Ethereum blockchain as that year they had to fork the Ethereum blockchain in order to recover Ether lost in a DOA funding. Ether traded between $10 and $15 US and given its potential I started by coins. My goal was to buy 100 Ether as I saw that Ether could overtake Bitcoin in that it could have many uses as projects get added to its blockchain.

In didn't take long but Ether started taking off going from $15 to $25 and then bolting to the $60 range. At the time I bought as much as I could which wasn't a lot because my cash flow situation was tight given the significant mortgage I hold. I was able to get 27 Ether before it leaped into the $100s. It was not too long that the price of Ether went to $200 and stayed in that range for a few months. In these times where a coin’s price growth stalls often investors start thinking that growth will be harder to come by and it’s easy to sell these coins inorder to invest in other assets that are growing better or to pay for expenses that come about. In my case my BMW X6 needed new tires costing $2,000 and my property taxes were coming due which for me costs around $5,000 a year in June. So seeing the opportunity to use my Ether coins to pay for these two expenses I began selling my Ether in the $200-$300 range making a good profit of around $6,000.

Now we know what Ether has done since as it continued its appreciation to $900-$1200 US currently. My 27 Ether would be worth $30,000 US approx at today's prices so the tires on my X6 and property taxes are looking like they were very expensive and if I held onto my Ether for just 9 months more I would have enough to pay several years of property taxes and many sets of tires. My lesson learned from my Ether investment is that it is not wise to sell an asset appreciating well to fund lifestyle expenses, I would have been much better off borrowing the funds if needed and paying it off over the year. Given that the cryptocurrency market is still developing there are many opportunities that are going to experience high levels of growth and one should hold onto these assets and ride them out instead of selling too early and leaving lots of money on the table. The coins I currently hold today I plan to hold for several years so I have increased my time horizon with my crypto investments in order to realise the full potential of these investments.

In future posts I will go over other lessons I have learned investing in cryptocurrencies. I hope my Ether lesson is a good reminder to hold on to winning coins in this environment of high growth as appreciating coins have a good chance of continuing their growth and selling too early can leave a person feeling regret regarding their decision.