On November 20, I bought my first cryptocurrency. It was $25 of Ethereum. Within days it jumped to $30, an astounding 20% jump. It took the S&P 500 all of 2017 to go up 20%. Over the coming weeks, I gradually purchased more and more cryptocurrency. Since Coinbase offered Bitcoin, Ethereum and Litecoin, I figured I should diversify and spread my odds across all three.
Here is a simple Excel chart of the unrealized gains of my cryptocurrency since I started. (I use Cointracking.info to track my coins, but that’s the topic of another post). By Dec 18, I had bought $1200 of cryptocurrencies and was up $985, representing an insane 82% increase. That was the day bitcoin hit $20,000. I knew I was going to be a millionaire in a matter of months. I felt like a genius, and my only regret was that I didn’t put my entire life savings into bitcoin. Of course, I had to stick to my genius strategy of just putting more money into bitcoin and watching it explode. As you can see from the chart, in less than a week, my profit would drop to almost $400, still a respectable 25% profit based on the ~$2000 I had deposited.
However, because this chart only plots the daily profit, it doesn’t show the hour by hour and minute by minute volatility of each day. On Dec 24, my crypto-profit had all but disappeared and I was looking at a $100 loss and expecting my $2000 investment to go to zero within a few hours. Going from being in the black 82% to being in the red in less than a week was shocking. I was this close to getting out of the cryptomarkets altogether. I stuck it out because of my
stubbornness long-term hold strategy. Fortunately, it has bounced back and has stabilized to a still awesome-but-not-amazing-as-82-percent 25% gain. I’m going to hold off putting too much more $$ into bitcoin until I can figure out a good crypto investment strategy and gain a better sense of the market cycles. But I’m glad that I was able to experience a crypto-market correction and still be invested. That’s not to say I won’t pull all my money out if/when it crashes again though!
How did you handle the recent market correction?