The million dollar question
Today I got a text from a friend who, like me, has found himself heavily invested in cryptocurrency. He was (understandably) a bit shook up about the sudden dip in the market that is wiping off thousands of dollars from the value in his portfolio each hour. We went back and forth a little bit on text and he asked me the question that prompted this post,
What do you do in times like this?
Before I answer his question I think it's important to understand where my mind is at. Even though you and I may encounter the same challenges or opportunities, the likelihood is that we'll view them with completely different lenses.
May I go back to June?
When I look at the 'value' leaking out of my portfolio in the last few days, I am reminded vividly of events at the beginning of June. On the first of June I had a meeting with my boss. I remember at one point, ahead of the meeting, glancing at the value of my crypto-portfolio on my phone. I remember this because exactly a week later, in another meeting with my boss, I glanced at my portfolio again. It had doubled in a week. In one week, 100% gains. It was the highest value my portfolio had ever been.
I didn't do anything special that week for my investments to reach such lofty heights. Hell, the Crypto market didn't do anything special. For no reason other than speculation the value of crypto holdings doubled. I was sitting on a pretty penny.
No quid pro quo
While it's a fantastic feeling to see an asset go up in value, I find it very difficult to become emotional invested into something to which I've provided very little effort or value in return. Don't get me wrong. I LOVE gains. It is fun to see investments move in the right direction. I also like to think I try as diligently as possible to protect my investments. That I had done something intellectual to deserve my returns. However emotionally, I'm not wedded to the value of my assets. Particularly crypto assets. Because by their very nature, cryptocurrencies are volatile. They swing wildly up and swing just as wildly down.
No stranger to mood swings
I'm used to volatile. As a child I was forced to deal with volatility, real volatility on an almost daily basis. Paper asset volatility is child's play to be honest. My natural response to volatility, is calmness. If I see a volatile person, I'll keep a watching brief while they go on their ride and respond according. Under no circumstances will I be taken along with them. I try to take the same approach to crypto. Watch it move, act accordingly however I try not to internalise the 'gains' or the 'losses'. They are very fickle.
Fun first
I guess part of the reason is that relaxed either way about market volatility is, I'm very clear on why I'm into cryptocurrency. First and foremost, I'm into cryptocurrency because it is fun. A geeky kind of fun. But fun nevertheless. If I can make money while having fun, that's perfect.
However what I don't want to do, is make cryptocurrency 'work'. Stressing over losses feels like work. And I have worked my fair share of jobs for a long time now. I don't want cryptocurrency to be a second job. I want to change that paradigm with cryptocurrency, not re-create it.
Go big or go home
The second reason is... to the extent that I'm into cryptocurrency for the money, I'm in it for life-changing money. Everyone's goal is different. I'm not looking to earn enough for a deposit on a house, then cash out, leave crypto and spend 25 years working to pay off a mortgage.
Whilst I may take small profits, I'm only interested in cashing out substantial amounts of money, if those sums will radically change my life. Else, I'll stick with investing and re-investing in a technology that could revolutionise the way we live. Because when it comes to crypto, it's all or nothing for me. I want it all... and if I don't get it all I'm already reconciled with the fact I could blow half of it in return for nothing should the volatile crypto-market implode.
Pick your poison
So back to my friend's question,
What do you do in times like this?
My answer is simple. I wait.
I either wait for the market to crash low enough for me to buy more. Or wait for it to rise high enough for me to continue taking small profits or cash out a life-changing amount.
Meanwhile... Play hard!
In the meantime, I eat, drink and be merry... enjoy life! And with these little three to keep me on my toes - it's hard not to!
