My Crypto Journey

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3 years ago (Last updated: 2 years ago)
Topics: Bitcoin, Dai, Investing, Stocks, Crypto, ...

I had heard about Bitcoin way back in 2011 when the hack of the Mt. Gox exchange made headlines. Sure this was a terrible thing for everyone who lost their assets of course, though it did make people more aware of cryptocurrency.

Over the next few years, the value of Bitcoin increased and the whole ecosystem became stronger, more exchanges opened up and it gave people more choice about where to hold their assets, aside from their own paper wallets they had the option to hold their crypto in a number of different exchanges. Whether it is best practice to keep your crypto on an exchange or not is a matter for debate, anyway we will leave that topic for another occasion.

I made my first investment in Bitcoin in June 2017 when the price of a whole Bitcoin was around $2,700. Before I made my investment I read a lot of articles to give myself more of an understanding of what Bitcoin was all about, I did not just want to invest without learning a bit more. I think it is important to always do your own research and not just blindly follow the crowd or pile in because of the fear of missing out.

I invested £250 (around $350 USD) with XBT provider on an investment platform in an ETN (Exchange Traded Note)

The price of Bitcoin took off over the next six months! it was all over the news, everyone seemed to be talking about it. I decided that I would not get carried away I understood that assets do not always go up in a straight line and wanted to manage my risk to a downturn. I believe that Bitcoin and cryptocurrencies have a bright future, though I realise that they are highly speclulative and volatile.

As the price went up to a high of $20,000 I took profits along the way, maybe I would have done better by just holding my inital investment but I don't regret taking profits along the way, when the price of Bitcoin reached $20,000 I had already taken out £500 ($700) which had doubled my original investment and the amount I had invested was £250 ($350) so I could afford to lose that all in the worst case scenario. (Though I can't see Bitcoin ever going to zero) besides, the profits which I took I decided to invest in an ETF which is heavily invested in tech stocks, which has since grown by around 95% itself.

After the euphoria and rapid rise of Bitcoin to $20,000 in December 2017 the price began to fall rapidly. I continued to learn more and read about crypto, I opened up an account with Coinbase and brought a little more from time to time over the next couple of years, learnt more about crypto and also read more about stablecoins, coins which are tied to the value of the USD.

One good thing that I like about Coinbase is the ability to use their built in exchange to convert any of the cryptocurrencies they support for another.

During the most recent extrodinary rally to a high of $58,000, I have again been taking profits along the way, but this time instead of reinvesting them in the stock market I have been using Coinbase to convert my Bitcoin into DAI (a stablecoin tied to the USD). This is possible on Coinbase without paying gas fees! which is a good thing at the moment with the high ETH gas fees.

You can also stake the DAI coins in your Coinbase account and receive 2% apy. (Not much, but something in the current climate of low interest rates)

I believe that Bitcoin has a good long term potential for growth, the whole ecosystem has moved on and developed, big institutions are investing heavily now, but I prefer to limit my exposure to the wild swings by keeping some of my crypto in a stable asset like DAI. I wonder how many people have just piled into crypto without understanding the philosphy of it all, how it all works, gas fees, transaction fees, mining and so on, that still concerns me somewhat.

Maybe I would have done better by just holding my original investment, but it has been a learning curve, a journey and have done ok without taking huge risks.

Disclaimer: This is not investment advice, always do your own research.

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3 years ago (Last updated: 2 years ago)
Topics: Bitcoin, Dai, Investing, Stocks, Crypto, ...