In 2012 I bought $1,000 worth of Bitcoin at an average price of $5.
Today, those 200 Bitcoins are worth about $360,000.
That’s a lot of money and a tremendous return on my original investment. It’s by far the best return of any investment I’ve ever made.
When I made that first investment, I barely told anyone. I wasn’t keeping a secret or anything, it’s just that at the time Bitcoin was virtually unknown. And if you tried to explain what the cryptocurrency was, you’d just get weird looks.
“So, you’re telling me you spent $1,000 on a currency that is held in a computer and isn’t recognized by any government?” That was the normal question I got when I rarely brought up the idea of using Bitcoin.
“Well, yeah. But, it’s much more than that. You see, Bitcoin is decentralized, so it can’t be manipulated by a government. It’s kind of like gold, but you can transfer it over the internet,” I’d tell people.
“So it’s gold on the internet?” They’d ask.
“Well, kind of. But, really the most important thing is the Blockchain. That’s the future. Bitcoin just uses the Blockchain,” I’d respond.
At this point, I’d get a blank stare. So, then I’d move the conversation onto a different topic.
I was very excited about Bitcoin in 2012. I knew it would have a bright future.
Then, in 2013 I started to trade Bitcoin. When I say “trade,” it’s not like I was trading baseball cards for bubble gum. I was trading Bitcoin on a cryptocurrency brokerage based out of a foreign country.
I did very well. I almost doubled my position.
Today I would have well over $500,000 worth of Bitcoin.
Source: Coindesk
Yes, I would have had.
Remember how I told you that I was trading Bitcoin on a foreign brokerage? Well the US government didn’t like that. Something about me being a US citizen trading cryptocurrencies on a foreign trading platform sounded weird to them.
The brokerage received a ‘notice’ to cease doing business with US citizens. With that threat, the brokerage froze my account which preventing me from making any trades.
Then, the brokerage went under.
I lost it all.
Poof! Gone.
I was devastated.
Keep in mind, this happened when the price of Bitcoin was still under $100. So, I lost a serious amount of money, but it wasn’t anywhere near what it would have been today.
At the time, I just chalked it up as a loss. In reality, I only lost my original $1,000. Little did I know that the price of Bitcoin would soar to over $1,800 and my potential holdings would have been worth over half a million dollars today.
So here is what I learned:
#1 Bitcoin is exciting. However, the Blockchain is even more interesting.
#2 Never put all of your assets into one account. That applies to regular fiat currencies, cryptocurrencies, and any other type of asset you hold. You must diversify where you hold your wealth.
#3 Never underestimate your vulnerability to an outside force. This doesn’t mean you should live in fear, but just be aware that you’re never 100% safe.
#4 Bitcoin is an excellent answer to fiat currencies that are highly controlled and manipulated. But gold, land, art, and collectibles are also great options. Bitcoin is NOT the ultimate solution.
#5 The Blockchain (which Bitcoin is built upon) will have a huge impact in the future. Many companies are developing technologies which utilize the Blockchain, so it’s important to learn about how it works now.
Clearly, I made a lot of mistakes.
However, hindsight is 20/20 and I would have never guessed what that original $1,000 investment could have turned into.
Despite this painful learning experience, there is one thing that I can take away more than anything:
Be open to new ideas and changes.
When I first invested in Bitcoin, a large majority of people assumed Bitcoin was just a big scam. I’d attribute this assumption due to lack of understanding.
Learning about Bitcoin and how the Blockchain works was very difficult in the beginning. But, if you take the time to look at the facts with an open mind, you’ll be amazed.
That’s how I try to approach any new investment.
(And how I try to approach any new idea in life.)
This is some great advice to new traders and investors, thanks for sharing @codyshirk!
BTW, @Philosophy-trail @steemit , How does your comment have more votes than my article have views? You have over 100 votes and my article has under 50 views... how is that possible?
steemtrail runs curation trails and there are followers that vote on the curation accounts comments and posts. I'm still kind of new, but we have several of them and we promote content and positivity in the community. I'm not sure how the voting part works, I just promote content and they handle that part.
Yup, @philosophy-trail ... I think there is a bit of euphoria around cryptos right now. Don't get me wrong, I'm very positive about cryptos, but there are some HUGE traps that people can fall into (like what I did).
Hey great post @codyshirk - as a trader myself this is a very good cautionary tale. But that is truly an incredible return, I missed the boat on Bitcoin even after hearing about it, but you're an early adopter keep us posted on what's the upcoming and let's not miss it this time!
Thanks @mystidark ... it'd be a better story if I still had it all...
Hah onwards & upwards my friend - just keep that eye out for what's next! I don't believe the "real" gains have really even been sighted yet! Gold is in a similar position too I feel, closest thing to a crypto...
Sorry that you lost your money, mate :(.
There you have described the glaring weakness with respect to digital currency, have you not?
Perhaps. But you could draw similar comparisons to the depositors of Cyprian banks.
If I had stored it all in a wallet or printed it out and physically put it in a vault, maybe that would have been better.
But this was more in the 'cowboy' days of cryptos.
I missed out on several opportunities over the past few years. Mostly out of fear, letting my family question my instincts about it. The skepticism was good though, I should be confident in my knowledge and beliefs. It stretched me to explain and justify, which strengthened my standing over the years. My failures led to experience and is now paying off. I finally feel as if I have a real understanding of what I'm doing and why. Not fool proof though and I have my moments! Thanks for the article.
Congratulations @codyshirk! You have completed some achievement on Steemit and have been rewarded with new badge(s) :
Click on any badge to view your own Board of Honnor on SteemitBoard.
For more information about SteemitBoard, click here
If you no longer want to receive notifications, reply to this comment with the word
STOPIf you want to support the SteemitBoard project, your upvote for this notification is welcome!