The Current State of Cryptocurrency - Smart Money Seed

6/26/18

The Current State of Cryptocurrency


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).
Here’s bitcoin’s current value, as of 6/25/2018:



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.
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.
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

2 comments:

  1. 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?

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    1. Excellent point, happy to write about it in a future post!

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