Despite all of the traders telling everyone to ‘HODL’, the bubble burst on Cryptocurrency and it’s hard to underestimate how many people lost massive fortunes. Thinking back to the peak of crypto trading, it seemed like once a day I’d read an article about some person who took out a loan, or liquidated their assets, or sold their house and put all of their savings into crypto.
I find myself thinking about those people a lot and pondering whatever happened to their investments. Did they get out in time? Are they back at the normal 9-to-5 grind? Are they holding those long-term positions in hopes it will all be worth it one day just like Beanie Babies????
Most people got crushed by the Cryptocurrency market tanking but not everybody took a hit. According to a recent article in The Hustle, Dan Conway was ‘a former middle-management cog in a Silicon Valley firm’s wheel’ making around $150,000 a year with three kids and a wife to support. His story sounds very similar to a LOT of the ones I heard from people who got deep into crypto:
As a disenfranchised suit-and-tie, I was enraptured by the possibility of a decentralized future. As a greedy speculative investor, it gave me a rush. In short order, I developed an Ethereum obsession. I listened to Ethereum podcasts while walking the dog. I read about Ethereum during every spare minute I had at work. I rejiggered my Twitter feed to follow mostly Ethereum-related accounts. I absorbed hours of Ethereum commentary on YouTube.
He describes his burning desire to invest in Ethereum as if it were some sort of midlife crisis. Instead of going out and buying a Porsche he found himself cashing in the money he and his wife had saved for college their three children and he threw ALL OF IT into crypto.
He initially took a loss but that didn’t deter him and holy hell did it all pay off.
He became so smitten with the potential, that he embarked on a wild ride — he used that $100,000 to buy 6,933 ETH at an average price of $14.
Soon thereafter, he was served a heaping spoonful of crypto volatility and watched his initial investment drop below $40,000. “In the midst of a particularly volatile week, I found myself in the emergency room, struggling to breathe,” he explained. “The doctor diagnosed me with a panic event.”
Undeterred, Conway doubled down by tapping into his home equity line. He borrowed another $200,000 and ended up with a total of 26,750 ETH at an average cost of $11.21 each. This had all the makings of serious disaster, but, no, the investing gods had other plans.
“Something miraculous happened: It kept going up… and up… and up. Between February and March of 2017, ETH shot from $15 to $50 per coin. By April, it was at $70; by May, $230,” Conway wrote in The Hustle. “In a span of four months, my $300,000 investment ballooned to $6 million.” (via Market Watch)
I remember looking at the various currencies at the height of their volatility and thinking that it would require an iron stomach to take those swings each day and from the way he tells it, the fluctuations would legitimately make him sick:
I’d seen a story at some point about someone who had spontaneous orgasms at random times throughout the day. That’s the best way I can describe the feeling. When I checked my phone, I’d be up another 6 figures since the last time I looked. I couldn’t resist stopping whatever I was doing to pump my fist and shout, “YEESSSS!”
But other times, ETH would dip, and the value of my stack would plummet by more than $1m in less than an hour. The “orgasms” were replaced by brutal withdrawals. The volatility was a narcotic, shooting up my brain with boosts of dopamine and serotonin.
The coins consumed me and changed my entire persona. (via TheHustle)
Around the beginning of last year (2018), Ethereum had quickly doubled in price and that’s when he realized it was time to get out. So he sold at the perfect time and made an absolute fortune before everything dissolved faster than anyone could keep up with.
In the course of 2 weeks in December 2017, ETH nearly doubled in price from $430 to $830. On January 3, 2018, it hit $900; 3 days later, it passed $1k.
It was an unprecedented burst — so monumental in scope that it temporarily froze the exchanges. It was like a 9.0 earthquake with an infinite number of aftershocks.
If I didn’t sell and ETH tanked, I’d lose it all. I’d have to tell Eileen and the kids that dad had dropped the golden goose egg, that I’d squandered my lottery ticket.
Watching the greedy masses pile into ETH reminded me of the famous battle scene from Braveheart: While the hordes rush forward in full sprint, lances atilt, the defenders sit still, unflinching and calm, waiting for the signal to attack.
I watched the price climb to $915. Then, over the course of two hours, I sold 11k ETH, the majority of my remaining stack, for $10m. (via TheHustle)
$10 million. He turned that initial investment into $10 million and walked away with all of his money. From January’s high of $1,396 it dropped to $385 in April and finished the year below $100/coin.
These days, he’s living the dream, traveling the world, and owns multiple homes:
Eileen and I paid off our $950k mortgage. We booked a trip to Africa we’d always dreamed of. Hell, we even bought a second home in Ireland.
Nearly 2 years later, it’s still surreal looking at our bank account and seeing high 7-figures, post-tax. It all happened so quickly that it feels like a dream.
He does have some advice for would-be crypto traders but if you’re thinking about throwing all of your money in now, that’s not what he suggests. He thinks the impact is ‘decades ahead’ with another market pop at some point in that distant future.
I’ll save you the fine details of my cryptocurrency experience with a quick summary: I bought in on the day one of the various currency creators announced he was selling off everything. I made my purchase a few hours before, which immediately tanked on that news. Then another competing currency was announced later that day or the following day and within 24 hours I was looking at 70% losses that never recovered. Thankfully, I never committed more money than I was able to lose unlike some people out there who lost fortunes.
To read his full article on The Hustle you can click here.