Oh what a year it has been, we saw Bitcoin hit $20,000 at the end of 2017 and then subsequently fall over 70% to $6,400, which is the price we see today. Many other projects have faired much worse seeing 80%+ losses.
Investing in cryptocurrency over this past year has taught me many lessons, not only with investing, but in my personal life as well.
My stock portfolio had seen a 27% return in 2017 and I decided it was time to take my profits and shift into Bitcoin. Personally speaking, buying Bitcoin last December was the first time I truly went "all in" on something(stock, bond etc.). I was experiencing feelings I had never felt before, watching people make 1500% returns in a year and upwards drove me to a horrible case of what I now know was FOMO. I wanted the gains all these others had seemingly so easily. Despite initially making my move due to purely greedy financial interests, I fell in love with what crypto stands for fundementally so, even as the major cryptocurrencies saw 50% declines, I continued to invest a portion of my bi-weekly paycheck into Bitcoin, Ethereum and Litecoin. Continuing to invest in these from their peaks to their valley has been a test of myself and my patience. I've lost countless thousands of dollars(although I'm getting close to being back where I started USD$ wise)and each time I take that portion of my check I have to ask myself "...am I ever going to see a return on this money?". Despite that nagging question in the back of my head, I feel really good about investing the money I'm still investing.
The major lessons taken from "The Great Crypto Crash" are:
Never Put All Your Eggs In One Basket~ Remaining diversified in stocks would've hedged against a portion of the losses allowing for a more effective DCA(Dollar Cost Average). In retrospect this seems obvious, but at this time last year, I couldn't bring myself to follow the rules I had established for myself as an investor.
If It Sounds Too Good To Be True...It Probably Is.~Buying into Bitcoin and other cryptocurrencies after they had seen 80x returns, expecting an additional 10x in growth before a pullback, was just stupid, plain stupid..Lol. Buying on a 70% decline is a much more effective way of acquiring the most crypto.
Patience Is Key~ The early-early adopters of crypto(pre-2013) never could've anticipated the growth the space would see from 2011-2017, weak hands during that time were shaken out as they are today, the point is the people who have held for any period of time longer than 3 years have seen sustained profits and higher floors when the corrections come, so must remain patient!
This year has taught all of us new comers a lot, we'll forever be a little more cautious, less speculative and have iron clad HODL'ing muscles. Cryptocurrency, in some form or another will succeed one day and replace the system we currently see in place today, will it be Bitcoin, Ethereum, EOS, Litecoin, Monero or some other unknown yet to be created token? Time will tell.