{"id":51324,"date":"2021-12-31T09:55:41","date_gmt":"2021-12-31T01:55:41","guid":{"rendered":"https:\/\/www.imoney.my\/articles\/?p=51324"},"modified":"2021-12-31T17:37:06","modified_gmt":"2021-12-31T09:37:06","slug":"result-5-years-crypto-investments","status":"publish","type":"post","link":"https:\/\/www.imoney.my\/articles\/result-5-years-crypto-investments","title":{"rendered":"If You Invested In Crypto 5 Years Ago, Are You Rich Now?"},"content":{"rendered":"
It has been a record-breaking year for Bitcoin with all-time highs, crossing USD$68,525 on November 9 followed by a recent plunge.<\/p>\n
My first ever investment in crypto was in September 2016. That\u2019s five years ago now, and a >100x gain. (If only I\u2019d invested more! I was scared back then, so I started with just a bit of money.)<\/p>\n
I\u2019m happy, but this isn\u2019t a victory parade. In fact, in the crypto world I\u2019m a boomer with mediocre gains. No kidding \u2014 if you tell a hardcore crypto bro I\u2019ve been in crypto since 2016 and still haven\u2019t reached financial freedom, he might say I\u2019m \u201cngmi.\u201d<\/p>\n
Maybe that\u2019s the story of my life. Taking reasonable risks to get some nice wins, but nothing that\u2019s gonna show up in the news. My lifestyle\u2019s stayed the same \u2014 you\u2019re never gonna see me flexing with a lambo. I was always a fan of getting rich slowly, but somehow crypto found its way into my life and is just speeding it up a little.<\/p>\n
Now if you\u2019ll let this boomer reminisce a bit, here are 10 lessons I\u2019ve learned from crypto investing over the last half-decade.<\/p>\n
Bitcoin Obituaries tracks that Bitcoin has been declared \u201cdead\u201d by notable people 432 times now.<\/p>\n
The oldest death was in 2010, when Bitcoin was USD 0.23. China has also famously \u201cbanned Bitcoin\u201d six times now. The newest obituary was by JPMorgan CEO Jamie Dimon on 12th October 2021, when Bitcoin was USD 57,485.<\/p>\n
At what price will sceptics admit they\u2019re wrong? USD 75K? USD 150K? People have been calling Bitcoin a tulip bubble<\/a> for a decade now.<\/p>\n Of course, it\u2019s not all about the price. Look beyond the hype and here\u2019s what\u2019s been happening over the past couple of months:<\/p>\n It\u2019s been a real privilege to see things we predicted years ago coming true today.<\/p>\n \u201cWhy Bitcoin when I can ride SHIBA INU to the moon bro?\u201d<\/p>\n True, Bitcoin has gone up 340% over the past one year. But that\u2019s nothing compared to something like Solana, which is up >12,000% (not a typo).<\/p>\n I\u2019ve written extensively on \u201cWhy Bitcoin?,\u201d so I won\u2019t go into detail here. But in summary, Bitcoin is still the reserve currency of the crypto world. The king. Other challengers may come and go, but the fate of crypto overall still relies heavily on the fate of Bitcoin.<\/p>\n This hasn\u2019t been obvious over the past year because pretty much everything has been going up, but if\/when a bear market comes \u2014 tons of altcoins are going to get wiped out.<\/p>\n My favourite example comes from the bull run of 2017, when a coin called NXT was the best performing new coin. In the 2018 bear market, NXT crashed 92%. Bitcoin crashed too, but today is >3x its 2017 peak. Meanwhile, NXT has never recovered.<\/p>\n Over the years, I\u2019ve chatted with quite a few Bitcoin sceptics, with lists of objections. Always happy to share my thoughts, only for them to come back and say, \u201cBro, but what do you think about <sh*tcoin> instead?\u201d<\/p>\n That\u2019s not: \u201cBitcoin will fail because <legitimate challenge>\u201d That\u2019s: \u201cI think I missed the boat, so I\u2019m gonna find the next Bitcoin.\u201d<\/p>\n My advice has remained the same: If you\u2019re new, start with Bitcoin, with a small amount of money you\u2019re willing to experiment with. That gives you the best foundation to learn and grow from.<\/p>\n Your reminder that today\u2019s hottest coin might be forgotten one day.<\/p>\n Image source: CoinGecko<\/p><\/div>\n There\u2019s a spectrum of people who invest into crypto.<\/p>\n One on extreme, there are Bitcoin maximalists, who believe only Bitcoin is legit and everything else is sh*t. On the other extreme are baddies who pump and dump shady coins to get rich. Somewhere in the middle are people like me who believe in a multicoin world: Bitcoin remains king, but there will be other princes in our kingdom.<\/p>\n It\u2019s foolish to ignore the innovation that\u2019s happening in many other cryptos. Some of the applications being built on Ethereum and Solana today are astounding. I recently wrote a 2,400-word article on how Play-to-Earn gaming is transforming lives \u2014 people putting food on the table via online games.<\/p>\n So many opportunities to create a better world using crypto. So many cryptos. The real challenge is figuring out which have genuine potential, and which are sh*t.<\/p>\n What\u2019s \u201cright\u201d in the investing world?<\/p>\n Unlike something like gravity \u2014 a physical law \u2014 there\u2019s nothing fixed about the world of money and investing.<\/p>\n Benjamin Graham\u2019s investing formulas might have worked in the 1970s, but probably can\u2019t explain what\u2019s been happening with growth stocks (congrats Tesla holders) from 2010-2021. All the respect in the world to OG investors and books, but Graham himself was constantly adapting.<\/p>\n As Jason Zweig writes: Sometimes when I see people arguing\/flexing about what\u2019s the \u201cbest\u201d investment, it reminds me of this. If even the father of Value Investing was constantly evolving, shouldn\u2019t we be open to changing our minds too?<\/p>\n I\u2019m not interested to declare whether growth investors are better than value investors. Or if crypto investors are better than stock investors. Or if today\u2019s generation of millionaire NFT flippers are better than Bitcoin maximalists.<\/p>\n There\u2019s wisdom in understanding diverging views without irrationally choosing sides. You don\u2019t have to choose a camp and tie your identity to it. You can learn something from anyone.<\/p>\n I care less about being \u201cright\u201d and my ego nowadays. I\u2019ll happily put up my hand and say I don\u2019t understand many things about the world. I\u2019m okay to put a little skin in the game to learn.<\/p>\n Viewing things as experiments allows me to get bigger wins, than if I keep my head buried in the sand and say \u201cI only invest in things that I 1,000% believe in.\u201d<\/p>\n Investing is not a religion.<\/p>\n Take the red pill, try to invest in high-risk stuff, and you\u2019ll be wrong a lot. Here are some of my losses:<\/p>\n I used to think losing money means I did something wrong. But maybe a more realistic mindset is to expect some losses with the high-risk-high-return stuff.<\/p>\n I\u2019m reminded of lessons from Renaissance Technologies and the Medallion Fund \u2014 the most successful hedge fund of all time:<\/p>\n At 40, Jim Simons left a famed math career to launch the most successful hedge fund ever: Renaissance Tech.<\/p>\n Even though it only won 51% of trades, the fund made 66%\/yr for 30yrs (Simons worth = $25B). It’s a story of genius, but also of how hard it is to beat markets.<\/p>\n THREAD\ud83e\uddf5 pic.twitter.com\/2aiv88vrap<\/a><\/p>\n \u2014 Trung Phan \ud83c\udde8\ud83c\udde6 (@TrungTPhan) August 8, 2021<\/a><\/p><\/blockquote>\n\n
<\/span>2. Bitcoin is (still) king<\/span><\/h2>\n
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<\/span>3. Doesn\u2019t mean other cryptocurrencies are worthless<\/span><\/h2>\n
<\/span>4. Being \u201cright\u201d doesn\u2019t mean making money<\/span><\/h2>\n
\n\u201cIn each revised edition of The Intelligent Investor, Graham discarded the formulas he presented in the previous edition and replaced them with new ones, declaring, in effect, that \u2018those do not work anymore\u2026’\u201d<\/em><\/span><\/p>\n<\/span>5. Dealing with losses<\/span><\/h2>\n
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