I first learned about Bitcoin in 2012 whilst working in an investment bank and watching Bloomberg all day long. Stupidly, I didn’t buy any and was one of those cynics who was put off by the negative press surrounding the darknet and Silk Road. The price volatility didn’t help.
I’ve made some good investments in my time; and some bad ones. In 1997 I was researching the tech market as the internet started to make headway in our lives. I asked a broker in the UK if I could buy shares in a few little-known US stocks listed on Nasdaq: Amazon, Yahoo, AOL. He bemoaned how difficult it was to invest directly in US stocks at the time. Stupidly, I allowed him to put me off in favour of a few technology mutual funds. When $1000 in 1997 vintage Amazon stock surpassed a million bucks, I could have throttled the guy! Don’t get me wrong - the funds did really well, but I didn’t get to retire early on the gains. If only…
So what did I learn?
- The value of research is never wasted.
- Trust your instinct and the strength of your convictions.
- Invest in the early stages of major developments that you believe are going to change the world.
In mid-2017 I was having a beer with a guy working in the blockchain space. He was telling me how crypto and the blockchain was at a similar stage to the internet in the mid-90s. A light went on in my head straight away (I refer you to my earlier experience with the Dot Com boom). At that point I knew I needed to get into crypto. I started researching everything I could and getting input from a colleague who was trading altcoins. I’ll be honest with you. For a normal person (i.e. not a computer science grad, cryptographer or cypherpunk) it was pretty daunting and complex at first. I spent some time researching prices and price history, wallets, exchanges, different coins and how to on-ramp. As I was doing this research and getting ready to buy in, the rocketship launched. It was December 2017 and the crypto markets went to the moon.
I held off and waited, taking the time to further my knowledge, understanding and confidence while everyone else rode the rollercoaster. Some bought Bitcoin at $20k and got REKD (ouch!), some sold at the top and retired. There were suddenly all these paper millionaires in their twenties, just like there had been in the Dot Com boom. So, the question you’re asking is: had I missed out again? In my opinion – definitely not.
The main factors about crypto that got me interested were the stage of evolution in the cycle and the potential of the underlying technology. I have some strong convictions: that the blockchain and smart contracts will transform banking, insurance and the legal industries; that fintechs, apps and dapps will disrupt the longstanding dominance of the world’s major financial corporations; and that decentralised digital currencies, with global reach and low transaction fees, will rock the financial sector to its core.
It’s not too late. Just like the late nineties, there will be winners (Amazon, Yahoo, Ebay) and losers (Netscape, Lycos, Pets.com). Think about it. Even if you had bought Amazon stock at the peak of the tech bubble in December 1999, you would still be up more than 1,500% on that investment. It's an important lesson. Investors often undervalue fast-growing companies with massive opportunities to expand. Just because a stock (or coin) looks overvalued, doesn't mean it is.
As for my crypto journey, I’m doing okay. I bought the dips and continue to do so. They’re not that hard to spot. I invest what I’m willing to lose and buy in at prices I’m willing to invest at. I take a portfolio approach but believe that Bitcoin is the winner as a store of value. I punt a bit on a few obscure altcoins and I even started mining. I take advantage of free crypto opportunities (see my guide on how to earn free crypto) and I’m learning more each day. I’m passionate about this space and you never know. It may just pay off big time!The Briton Ferryman