I admit I was late to cryptocurrency investing.
I heard about it years ago but never gave it much thought until this year. Everyone was saying it was too late at that point but I had some extra cash I was willing to lose. Therefore, like any investor with a high risk tolerance, I threw caution to the wind and said;
I opened a Coinbase account and bought some coins. The three offered there were Bitcoin(BTC), Ethereum(ETH) and Litecoin(LTC). My “portfolio” was about an even split between the three.
I didn’t have a specific strategy or a timetable for investing. I just knew I didn’t want to make it a big investment due to the potential for loss. It was $200 here, $200 there and it continued until December. All told, I threw about $3300 into this thing.
I didn’t expect much but I did see a this potential new asset class and wanted to see how it played out. There was no harm beyond total loss in putting a tiny bit of my money out there and spinning the roulette wheel.
Beyond my random purchases, I didn’t check the prices nor did I care much about returns. That changed a few weeks ago when I checked my total during a routine purchase of ETH.
The account was worth $15,000.
That means I had a 4.5x return in less than half a year. That return was had with almost no thought to what I was buying. It all seemed pretty silly to me. I decided to pull out my original investment and let the rest keep going.
I opened an account on binance to buy some alt coins and now own a variety of other coins. High quality coins like REQ, XLM, QSP, LINK, VEN, XRP, MOD, ARK, WTC and others.
How do I know these coins are high quality? I don’t because they were initially bought after 10 minutes of research via reddit.
What was the result? Some of these coins have gone up 500% since I bought them.
The account that was worth ~11k after I pulled out my money a week or so ago is now up to 15k again. That includes a large price drop in the market today due to the Korean government’s potential plans to impact trading in that country. When you consider my initial outlay that’s out of this total, my return is 5.5x.
That’s the kind of return that can lull an investor into a fall sense of security and make one think that you know what you’re doing. It’s the kind of return that can make someone like me think; “hmm, maybe I should have put more money into this” and do something risky. Continue reading “Investing in cryptocurrency seems too easy – the risks and allure of bitcoin and altcoins”