Losing Everything in Crypto
For many people invested in crypto, this has been a demoralizing year. If you were lucky your portfolio would have shrunk by nearly 70% in value due to the market quickly turning into a deep cold winter. But there were so many people who had much worse luck and lost everything. They didn’t lose their coins by doing something foolish like trading with leverage or falling for scams offering to send you double the amount of Bitcoin or Ethereum that you initially send them. No. These people were taking a small risk by just lending out their crypto to lending services such as BlockFi, Celsius, Voyager, Gemini earn, Vauld and the list goes on. And then there were people who lost their crypto by doing nothing wrong at all. Just by keeping their coins held on what seemed like one of the most reputable crypto exchanges in the world. The people who had the worst luck this year either had their funds frozen unlikely to see them again, or completely lost them.
In the days, weeks, and months that have passed since these insolvencies have taken place, I have periodically checked the Reddit pages of these various companies. Going through the endless amounts of posts talking about how much money they lost, and how they are trying to somehow cope with it. I can only handle reading their posts a few minutes at a time before I also can’t take it anymore.
People are pleading with the services to unfreeze their funds and give them back their money. Explaining that this was their life savings, and was the money that was going towards a house, or would finally change their lives financially forever. Lives were ruined and futures were destroyed.
I know that was probably depressing to read, but I promise the article will go in a much more positive direction from this point on.
For those of you who lost your crypto in any of those situations above, I know exactly how you feel. The thing about being invested in crypto for the long term is that eventually one of these situations will end up affecting you directly. Naturally, I have had my own share of bad experiences as well.
For the longest time, I was extremely skeptical of the UST staking interest opportunity. After all, being able to earn nearly 20% seemed too good to be true. But enough time passed, and I eventually gave into my temptations and began staking some UST on the Anchor. The next month was when the UST/Luna t took place, sending both of them nearly to zero. I watched the situation closely and sold when UST reached 0.78, but it still cost me quite a bit.
Even further in the past, I decided to take out a loan on Nexo. I was convinced that the crypto market was bound to go up dramatically and thought it would be a great way to increase my BTC holding. As luck would have it, almost immediately after taking out the loan the crypto market had a deep collapse. Since I didn’t have sufficient collateral on Nexo, I was then liquidated. Another painful lesson that I learned.
What this all means is that I have also had 2 of these painful experiences that have set my portfolio back since investing in crypto. But not even these experiences have been able to stop me and my constant grind for crypto accumulation.
This means that if you were heavily affected by the crypto insolvencies this year all is not lost. Yes, your crypto portfolio likely took a large hit that was very painful. I’ll be honest, that will take quite some time to get over emotionally. However, we are very lucky that this situation happened at the complete bottom of the market, rather than at the top. For example, if you lost 1 Bitcoin on one of these services. At the peak of the market that would cost you nearly $70k to replace. An impossible task for most. However, right now it would cost you nearly $17k to replace. While that is still too much money for most, the point is that you will be able to recover more BTC than you would have been at the peak of the market.
As weird as it might seem to hear, the truth is that we are still very early in the lifecycle of crypto. Time is your friend. There will be plenty of time to be able to re-accumulate what you had, and eventually soar to even higher heights. It won’t be easy, however. If you want to do this and do it as quickly as possible. You are going to need to work extremely hard. Grinding with side hustles, selling things around the house, working extra hours, and finding any way possible to be able to accumulate more. By doing all of these things, you will be able to eventually recover and even grow larger.
This is a story as old as time in crypto. Many investors have started with nothing, became rich, lost everything, and gained it all back. Just know that it is possible. No matter how sad or hopeless you may be feeling right now. Know that you aren’t alone, you can recover from this, and you will recover from this!
How about you? Did you get caught in one of the crypto insolvencies this year?
As always, thank you for reading!
