How’s everybody doing, Smart Money Squad? It’s been a while
since I last checked in on the world of cryptocurrency, so I figured I’d give
you all my thoughts on where the market currently sits. When we last gave you
guys the SMS Ultimate Guide to Bitcoin,
this is where bitcoin (the biggest cryptocurrency) was trending:
HOLY CRAP, that was fun, wasn’t it? I could sit on my high
horse and talk about my crypto gains, why I entered the bitcoin market at $800
and why I thought we were heading for the moon. As many of you know, though,
cryptocurrency & bitcoin has taken a tumble since this day (12/13/17).
Not ideal. Time to eat some crow-even though my initial
investment is still worth more than my initial investment (nearly 8x profit), I’ve given back $11,000 worth of
value/bitcoin in the span of six months. That’s not an insignificant amount of
money by any means & a number that certainly jumps off the page. Although
my losses over the last six months may sting at the moment, I wanted to write
this post to clearly state one thing: Cryptocurrency/Bitcoin
is a LONG-TERM INVESTMENT, not a get-rich-quick scheme.
Be a Smart
Investor, Not A Gambler
When I first got involved in the world of cryptocurrency, I
made the decision that I wasn’t going to sell for 5 years, regardless of the
market action. I’ve seen bitcoin rise from $800 all the way to $20,000 &
back, with peaks and valleys along the way. I’m an early adopter of Litecoin
(first coin purchased at $12-hit $387 this year). Regardless of how much money
I’ve made or lost over my cryptocurrency investments, one thing remains
constant: I hold & don’t sell.
Those that know me know that I enjoy to gamble from time to
time (side note: currently counting down the days until my Vegas bachelor
party!). And while you may find me betting on 12-year-olds over/under on pitch
speed at a Cleveland Indians game, you won’t find me treating investments as a
bet. If I told you that your 401k was down 20% this year, would you immediately
be tempted to take all your money out? NO WAY (if you are a loyal SMS
reader)-and that’s because it’s a long-term investment. Treat cryptocurrency
not as an immediate cash cow but as an investment in the currency of tomorrow.
As long as you don’t have an itchy trigger finger, I believe
that cryptocurrency will bounce back even stronger than where it sat in
December 2017. I’ve been fortunate enough to go through many of these
“catastrophic” drops over the course of my investment, and if there’s one thing
I know, it’s this: CRYPTOCURRENCY IS VOLATILE. One Donald Trump tweet can
affect the value of Bitcoin by $600.
Is that fair? No. But as I look at a 10 years chart and see steady upward growth akin to that of the DOW & NASDAQ, I’m comforted. Be a smart investor, not a gambler; the future you will thank you immensely.
Is that fair? No. But as I look at a 10 years chart and see steady upward growth akin to that of the DOW & NASDAQ, I’m comforted. Be a smart investor, not a gambler; the future you will thank you immensely.
Real-Life Use of My Cryptocurrency
I
also wanted to write this post to explain some of the ways I’ve been utilizing
cryptocurrency to pay for some personal expenses. For those that don’t know,
Kayleigh & I are new homeowners as of this month! Obviously, buying a house
comes with 10,000 signatures & plenty of costs along the way. With my
initial investment in Litecoin, I was able to pay our closing costs on the
house & still hold over 50% of my initial investment. While I’m still very
committed to holding the cryptocurrency I do have, I was excited to realize
some gains I’ve made and ultimately was able to pay for one of life’s biggest
purchases with a cryptocurrency investment. Pretty neat!
When
I decided to withdraw Litecoin, the process was extremely smooth. I transferred
Litecoin to GDAX (an online exchange) and traded Litecoin-USD at a $124 rate.
From there, I simply withdrew to my bank account & I had the money
same-day, faster than a bank-to-bank transfer would take 99% of the time.
Needless to say, I was thrilled with the process.
Another
cool purchase I got to make with cryptocurrency was one of my newfound vices:
bourbon! I’ve committed to try more bourbon in 2018 but the selection around
central Ohio is not great. Luckily for me, a Reddit post alerted me to an
awesome new online liquor store called Blockchain Bottle. The owner of the site, James, also runs a liquor store in New
Jersey & saw the opportunity to take cryptocurrency as a payment option
online. He also had bottles that I have trouble finding anywhere in Central
Ohio, including my personal favorite, Blanton’s!
I splurged a little & bought 5 bottles of bourbon, using one of them as an excuse to get my dad a kick-ass Father’s Day gift. This was the first time I was able to buy product with cryptocurrency & it was a breeze. You could pay with Bitcoin, Ethereum or Litecoin (I chose Litecoin) and the payment went through immediately. It was nearly identical to paying with a credit card & the owner of the store quickly confirmed my order through email. Here’s a quick picture of my haul:
He’ll have a repeat customer in me, that’s for sure.
I splurged a little & bought 5 bottles of bourbon, using one of them as an excuse to get my dad a kick-ass Father’s Day gift. This was the first time I was able to buy product with cryptocurrency & it was a breeze. You could pay with Bitcoin, Ethereum or Litecoin (I chose Litecoin) and the payment went through immediately. It was nearly identical to paying with a credit card & the owner of the store quickly confirmed my order through email. Here’s a quick picture of my haul:
He’ll have a repeat customer in me, that’s for sure.
Final Thoughts
In
the world of cryptocurrency, you have to be prepared for peaks and valleys.
Although we are in a valley right now, I’m confident the market will bounce
back better than ever. This latest valley was yet another reminder that
cryptocurrency is volatile & should be treated as such-don’t put any money
you can’t afford to lose in an investment!
I’m
going to relax on HODL (hold on for dear life) island & hopefully get to
deliver a glowing update on cryptocurrency in a few months. Until then, be
well, Smart Money Squad!
-Ty
Great post Ty. I’m thinking people would also be interested in learning the impact on their taxes if they are trading compared to HODLing. Maybe a future post?
ReplyDeleteExcellent point, happy to write about it in a future post!
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