My Crypto journey from 2011 to 2018

journey

#1


via good audience

I have written plenty of articles this past year on how to enter the crypto markets, the basics of Bitcoin and blockchain investing as I understand it, as well as price analysis that went from extremely bullish in Q3 2017 to very bearish towards the end of Q4 2017. You can find all those articles in my profile and I need to stress once again that all of it is merely opinion, never advice.

Today however I want to share my own journey into crypto and a few notable events on the road as I enjoy reading such personal accounts myself (I would love to read more), so I thought you might as well.

The early days — 2011 or 2013?

They say the internet does not forget things. Well, I can tell you that the email accounts I have used over the years certainly do forget things. I am almost positive that I bought my first bitcoin at some point in 2011, but as I was extremely interested to know what price I may have paid exactly I tried to find evidence of my earliest bitcoin adventures. Alas, the only thing I found in my old email inboxes and archives was the below email from May 2011. Probably should ask Facebook. I am sure they know the exact date and have the missing emails somewhere on their servers.

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The only reason that email above was interesting in regards to my search is of course that it was sent from bitmarket.eu, which suggests this is a service for bitcoin news and if I signed up for it back then, I presume I must have been invested. It makes sense too, as the price that I remembered for some reason was $18 per bitcoin. However, when I look at the earliest preserved Mt.Gox emails that I was able to find, those suggest a date closer to February 2013 and prices don’t really help my memory here as $18 was a popular price at the beginning of 2013 as well. In any case, the earliest transaction records that I was able to unearth actually say $47 and stem from Mt.Gox confirmations. Given these were sell orders, I am going to go with the idea that I bought bitcoin some time around the beginning of 2013 for $18 or so and sold some of my first stack when the price more than doubled a few months later.

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So how did I get into bitcoin? It was an IT-savvy friend playing on the same hockey team as myself who mentioned that another friend of his was mining these internet coins. He said his friend believes it would be a future payment method, but that this friend also basically tries everything and usually is not very persistent in his efforts. I wonder if he was persistent this time — if he was, I would estimate his fortunes in the $10s of millions. I don’t know though and neither does my friend.

I am not particularly technologically inclined. I would describe myself as half-way between a geek and a grandpa in regards to technology, meaning I did actually experiment with some basic HTML and Pascal coding, at some point even designing websites for people when I was in high school, but I never really took this much further. The reason bitcoin caught my attention was a different one: making money. That was a topic I had always been fascinated by. So much so that I traded my first stock still in high school in 2000, at the height of the .com bubble (my learnings from that bubble are well documented here on medium), studied business and started an equities fund in 2012, which is where I still work today.

So from day 1 I admit that the main motivator for me has always been trading bitcoin and not so much the technology behind it. Over the years I have read up a lot on that aspect as well and can by now claim to be a half-literate blockchain enthusiast with the utmost respect for Andreas M. Antonopoulos, whose book I was only able to comprehend in small parts. The aspect that will always be my main domain is trading as that is where my expertise and passion lie.

I remember well that when bitcoin crossed $150 and I had 10x my initial investment (it was much less than you probably make it out to be now; I had just started my new business and was very much cash strapped, we are talking mid three digits), I had a discussion with my parents about it. The takeaway from it was that my dad thought I was childish and naive to play with this internet money and I still know that I sold the majority of my holdings a few days later at a price of around $150.

Mt.Gox — 2014/15

Being a trader and keeping my Mt.Gox account intact, I never did sell every bitcoin (fraction) I owned. I had kept some on a wallet that was somewhere on my old Mac (which luckily I still found). Obviously, I watched in envy as my “childish” internet money went from $150 (where I sold most) to more than $800 over the course of the year and while I was able to sit out most of that rally and just watch (one of my best qualities), I did dabble a little in bitcoin trading around the mark of $650/700 towards the beginning of 2014, having moved my (not so) cold storage coins to the exchange. I can still remember that my balance on Mt.Gox in US Dollars was somewhere around the mark of $4,500.

And then it happened. Despite all the precautions (yes, yes, never keep bitcoin on an exchange…) with yubikey 2FA and all, when I wanted to log into my account there was nothing. Not only was I unable to log in, it seemed that the website was gone. The rest is history of course. So I lost almost all my remaining bitcoin in the Mt.Gox bankruptcy.

I then used bitcoin for the first time to pay someone for an option in a company participation in 2015 when bitcoin was worth around $400. Those were my last 2.5 bitcoin as far as I can remember and I then became what would be called a nocoiner today for quite some time.

Ethereum and The Dao — 2016

For the better part of two years crypto did not take up much of my mind space. Then I stumbled upon Ethereum on Twitter. I don’t exactly know when that happened or what was the first message that caught my eye, which is a bit sad in retrospect. Ethereum was different to me in that this was the first time that I was actually fascinated by the technology behind crypto.

Call me unimaginative, but the simple application of moving and storing money (which is what I understood bitcoin to be; I know now it can do much more) did not really create any kind of fascination with me technologically back then. After all, I am not part of the “unbanked” and last time I checked, while it might not be possible to send money within 10 minutes on a bank account, I was able to comfortably send SWIFT payments within an hour or so at no cost. Sure, bitcoin takes it one step further, but that was a bit thin as a value proposition to keep me interested in the story for years. Ethereum (to technologically half-literate me) on the other hand seemed like a quantum leap. The story that “did it” for me was nicely summarized by “angelomilan” in the graphic below.

This opened my eyes: the blockchain would be able to power decentralized applications (dApps) and I could easily see that those would be unhackable and probably allow individual users to finally control all of their data and avoid corporations milking said data for free. I was hooked.

Once I read up a little bit, I immediately purchased bitcoin on some exchange and shapeshifted it into ether. I can remember very few other trades I made which paid off as well as this one would. First of course, there was considerable drama. I bought my first ether at around $11 per coin and was watching happily as the price went above $18 over the summer of 2016.

Then The DAO hack happened. The DAO was of course the first real ICO (yes I know Ethereum was an ICO and there were some even before, but what I mean is an ICO with mass participation that jump started the current movement) and while I did not take part in the actual ICO and was actually ignorant to the reason my ethers had so nicely appreciated in value, I became acutely aware of what the DAO was when those ethers tanked. Apparently a hacker had managed to drain the DAO smart contract of all the contributed ethers. I researched a lot on it and as I had learned numerous times in my life that it is not sensible to sell out of a good asset at the time of maximum stress, I held on to my ether coins. At the end, I was able to profit from the debacle as the Ethereum community seemed to move in favor of a fork to repair the damage. This meant there was an arbitrage opportunity in buying the asset that nobody wanted — so I added a stack of DAOs to my holdings, given that they would likely be re-converted at their issue price, which was much higher than where they traded during the debate about the fork. I did not wait for the re-conversion but instead shapeshifted it all back into ether when the market had realized that the described arbitrage existed. I probably came out of the DAO debacle slightly “richer” than I entered it and did not touch my coins for the rest of the year. Nor did I dabble any further into crypto.

What I did do however was check the price of my ether stack reasonably often, waiting for my small “lottery ticket” to explode.

The bubble — 2017

And explode it did. By the end of the first quarter, despite all the issues with The DAO, Ethereum had become established as a network for token to trade on and while the computing power it can provide was meant to be used for DApps, its first use case became an ICO craze that rivaled the heyday of the .com bubble (when IPOs were similarly sought after).

Ever since the .com bubble days (when I lost a lot of money), I had one secret wish: be part of another bubble at least once again in my life. I promised myself that I would do it right this time and apply everything I had learned during my first experience in the 2000s, when I was a late entrant.

The first thing I remember from back then is that the Nasdaq formed what I call a “bubble roof” towards the end of the move on its chart. What I mean is a move leaving a previous trend channel to the upside and then rising close to 100% in very short order before collapsing (depicted below).

No such move was evident in bitcoin at the time (Q1 2017), but I also did not want to just invest. I was waiting for the opportune moment. To me, the March 2017 deadline for the SEC to decide on a bitcoin ETF was the perfect setup. Firstly, I know that most hyped events do not actually end up to be quite as glorious as people think (“buy the rumor, sell the news”), but secondly I was also reasonably confident that, given the numerous issues around custody, the SEC was never going to allow an ETF at the time. So with bitcoin trading at c. $1,200 I put in buy limits just below $1,000 in anticipation of a sharp drop on a negative SEC decision. Luckily, my limits were (just) filled and I was back in the bitcoin game.

I certainly did not anticipate the move that happened next. As we all know, bitcoin rose steadily from the March 2017 “low”. I was tempted to sell out completely quite a few times, but what kept me in check was that I kept looking for the described “bubble roof” to appear and it never did. Bitcoin remained below the upper channel line for almost all of 2017. I was determined not to make the same mistakes again, so I also managed to hold on to the small stack of ether I had bought the year prior through almost all of 2017. I need to be clear that this is not entirely true in the sense that when I trade an asset that I am convinced of, I always sell a little on every larger move up, while I always buy a little on every larger move down. I have written about this (beating your greed and fear monkey) in another article linked below.

Of course, there were other things I remembered from the .com bubble. One thing was that the earliest IPOs at the time were extremely profitable for people who invested in them prior to their listing. So of course I wanted to take part in the ICO craze. I thought that I was still early to the game, but I think I actually did my first ICO around the height of the profitability of “flipping” the coins (ie buying in the ICO and selling directly after receipt of the coins), so I was part of the “early majority“ in reality. My first ICO was Monaco (which ended up being a very profitable investment) and I then dabbled a bit in Status, InsureX, 0x and of course Tezos (those are the better ones…). Most of the ICOs I took part in lost me money vs just holding bitcoin or ethereum, so I soon stopped.

I caught my share of scams by the way. I invested some money in Monkey Capital (I cannot believe Daniel Harrison is still not in jail) and while too experienced to buy into something like Bitconnect, I did have a few other duds, some of which might still have a chance to work out but which I have written off. That brings me to Tezos.

Tezos is an interesting example because without the mainnet launch, I am forced to “hodl”. As you can gather from a lot of the articles I wrote on Medium, I am not exactly a fan of doing that once the bubble roof appears. So I watched the entire journey from having bought each “Tezzie” at around $1.20 during the ICO to watching the pre-launch version trade as high as $12.00 to it now coming back to earth to around $4.50, marginally outpacing the gains I would have had from simply holding on to my bitcoin, but quite sobering given I sold out of most of my other crypto at a time when I would have gotten about $10.00 per Tezzie. I kind of feel Tezos is the one that will get away for me. The whole story of this ICO is so unlucky that the likelihood the mainnet comes live literally on the day that tether implodes (meaning all of crypto will trade much closer to zero) or the SEC rules tezos an unlawful security sale is quite high. The future will tell.

Among the trades I remember more fondly was riding Raiblocks from a price of $4.40 to over $22.00 at the tip of a friend and a short read of their value proposition (ie due to pure luck) as well as of course not selling any major parts of my Ethereum holdings below $350.

Granted, I could have made even more on ether, but once the bubble roof appeared in bitcoin I was certain that things would not end well. I did not know how high prices would still go, but I actually published an article here in which I said end of November that they could go up more than 100% from there before they come crashing down. So I sold out practically my entire crypto holdings between December 2017 and February 2018.

My best trades in crypto ended up being Ethereum, Raiblocks, Lisk, Veritasaeum (a scam whose ICO traded up 17x and then rose even further) and Monaco, while my worst were Coeval (Monkey Capital), Enigma (due to my own stupidity, I sent my token to the main contract address by accident) and Zcoin. And no, I never risked the bank. My invested sums were always very small as this is merely a hobby to me.

2018

It is a new world now. Crypto is not in its infancy anymore, at least from an investment standpoint. I am sure bitcoin will at some point reach new all time highs if it survives (which it will), but nobody who invests today is still an early investor. The people telling you so are telling you the same lies (by accident or by design) that people were told at the height of the internet bubble and my opinion on the current generation of ICO token is not exactly a secret. So for now I am still waiting on the elusive Tezos launch as well as some other misguided ICO investments of mine to materialize and I dabble in short term trading of bitcoin when my work schedule allows (ie mostly on weekends). I treat token investments like security investments now, so I do not invest personally anymore in any kind of these.


#2

your loss :slight_smile: lasdf lökasd fadslfk


#3

he seems a bit like a sad person. too bad.


#4

A great article. I enjoyed reading his ups and downs.


#5

I agree with this. It’s a mantra that’s often repeated but doesn’t ring true to me. Guys who were in Bitcoin in 2010-11 are the early investors.


#6

People say that Satoshi has 1million btc and he never sell.
Does anyone know which wallets are his?

Based from Bitcoin Rich List, the top wallet belong to Bitfinex and only have 172,236K BTCs.