I first invested in Bitcoin more than seven years ago. Since then, I’ve published more than 20,000 words on crypto, rode two up and down cycles without selling, and pivoted my career to the crypto industry full time.
The ironic thing about a crypto believer working in the regulated crypto industry is you have to be careful about what you say. I can’t give price predictions, or tell you when to buy. I have to give disclaimers: This is not financial advice. Please do your own research or consult your financial adviser before making any investment decisions.
What I can share, is things I’ve personally learned from investing in crypto. I say investing, because I’m not much of a trader. My time horizon is decades. I buy and hold (though I definitely should have sold my shitcoins — more on that later).
I’ll try to keep this short. Everyone’s attracted to the price, but I’ll try not to talk too much about it.
If anything, this is a reminder to myself as we go into another potential bull run. Hopefully you find it helpful.
1. Outperformance = Being Early AND Right
Bitcoin Spot ETFs were finally approved in the USA on Jan. 11, 2024 — after more than 10 years of trying.
I’ve started seeing deep discussions about the fundamentals of Bitcoin on Twitter again. Difficult topics that I’ve made peace with, like: “How come Bitcoin is worth so much when it’s not backed by anything?”
But discussed between influential people now.
It’s great seeing these discussions — especially when minds are open to learning. But looking at the amount of misunderstanding among even really smart people, I believe we’re still early when it comes to Bitcoin as an investment.
This is something powerful I’ve learned (but please treat it with care): To really outperform1, it is not enough to be right. You have to be right early, when a lot of people are still wrong.
Applies to a lot of things. For example, if you were among the first few hundred employees at Google, at their IPO 20 years ago — you’d have become an instant millionaire.
What else are you in, that most people are still wrong about?
2. Tribalism Is Fun, but Might Not Make You Money
An example of Morgan’s tweet: arguments about which is the “best” investment. Someone who’s retiring in five years should obviously invest differently from a 25 year old. But don’t tell that to gurus shilling “X is the BEST investment” courses.
Meanwhile, in the crypto world, tribalism also reigns supreme. Bitcoin maximalists hate any other kind of crypto. Hardcore Ethereum believers and Solana fanbois publicly diss each other’s blockchains on Twitter.
Not gonna lie. It’s entertaining — like watching Love Island for crypto.
But remember — as an investor, you can invest in a mix of assets. No need to blindly tie your identity and money to just one tribe.
Also, you can learn something from anyone — even from the most ardent haters. In fact, they’ll give you plenty of good points on why you might be wrong about your investments. Put your ego aside, and use that to make better decisions.
Don’t marry your bags. Investing is not a religion.
3. Master the Things Nobody Thinks About
Everybody thinks about the price.
“If I’d invested $500 one year ago, it’d be worth $10,000 now. 🤑”
In reality, other important things people miss:
- Liquidity. How easy is it to sell when I need to?
Probably not a problem if you’re investing in Top 100 cryptos, but if you’re buying DickButt69 NFTs, they’re probably not gonna be as easy to sell as you’d imagine. Paper gains don’t mean anything if you can’t get your money out.
- Size. How much should I invest into this?
What’s a reasonable allocation to crypto? 5% of investment assets? 10% of net worth? Extremely valuable to think about + something to discuss with your financial adviser. Are you diversifying your portfolio by buying this, or actually gambling?
- Time frame. How long am I investing for?
Beware of getting influenced by hype from influencers. Buy and sell according to your timing, not anyone else’s. Even if it’s just been six months, and you’ve already hit your targets — remember to take profits. Doesn’t matter if people laugh at you and call you “paper hands.”
4. Instruments Come and Go, Gambling Is Forever
Understand there’s something deep inside you that’ll always lust for the idea of turning $100 into $1,000,000.
And it’ll destroy you if you don’t control it.
I think most religions discourage gambling because it’s so difficult to tame. People get addicted and throw away their lives.
How should a sensible investor manage that “gambling gene”? I’ve seen a couple of ways this plays out:
- You completely avoid any kind of high-risk investments. (Hi Mom.) Keep it extremely simple. Not a bad idea for most people, but if you’re like me, you’d never be able to 100% do this.
- You draw a thick line between the majority of your investing portfolio, and a little bit of fun, experiment money. Author Ben Carlson calls this “sinning a little.” This works for me.
- You let the gambling get out of hand and hurt yourself.
To be clear, I don’t think buying a bit of Bitcoin is gambling. Right now, it’s a lot more like buying a bit of digital gold.
Just understand that depending on your motives and actions, anything could be gambling.
5. Come for the Money, Stay for the… ?
Yes, everyone’s first attracted to the price and making money.
But most of the people who’ve stayed for years in crypto (and made the most money) have discovered something deeper.
For me, it was the tech + philosophy that got me hooked. And then being part of Bitcoin’s miraculous journey into mainstream finance.
Quoting writer Noelle Acheson:
“Bitcoin has undergone what will probably go down in history as one of the most astonishing progressions ever for a new technology.
What’s more, it has done so with no corporation or government entity behind it, no VC money for its operations, no internal PR team.
An asset without jurisdiction, without controller, without issuer other than a strip of code is now accepted in the highest echelons of finance, by the largest fund managers in the largest financial market in the world.
In just 15 years. That is an astonishing progression.”
This goes beyond investing — probably more applicable towards work. But if you’re lucky enough to find something that lights you up with curiosity: Test it. Learn deeply about it. Don’t be afraid to dive down that rabbit hole if you find you’re compatible with it.
Good things will happen.
6. Be Fearful When You Feel Invincible
When you feel euphoric; when you feel you can’t miss; when even shitcoins you’re buying turn to gold in weeks.
That’s probably a sign there’s overexuberance in the market, and a crash is coming?
In crypto, it happened in 2017. Then in 2021. In other markets, it’s been happening for centuries.
Make sure you’re not caught when the market eventually corrects.
So much of investing is not about numbers. It’s about managing your emotions. Being disciplined. Doing sane things when the world is going crazy.
7. A Time To Learn Is Often a Time To Earn
The flavor of the month right now is Bitcoin ETFs.
But narratives change.
Before this, AI coins were getting all the hype. In 2021 it was NFTs. In 2020, it was DeFi.
One interesting thing I’ve repeatedly observed is early adopters in crypto get rewarded. Whether it was buying Ethereum in 2017 or using Uniswap in 2020.
Please don’t dump your life savings into the flavor of the month (refer point #2). Maybe use a bit of experiment money? (refer point #4.) Just understand it pays to get involved early. At least to learn. But often, you earn too.
Looking back at my past two years of investing — where crypto prices were mostly dropping from their peak in Nov 2021: It’s actually been airdrops — getting crypto rewards for testing new crypto projects — that have grown my portfolio.
Of course, one day crypto airdrops might get oversaturated and lose value too. As with any other kind of narrative.
But there’ll always be new things to learn and earn from.
A Time To Move On
With the approval of Bitcoin Spot ETFs in the USA, one thing is clear: Bitcoin is now a mainstream investment. Other cryptocurrencies will follow.
It certainly feels like the changing of the guard. It feels like many more investment advisers will soon be taking up the baton of educating and teaching people about crypto, continuing efforts started by early believers.
With that, it also feels like it’s time for me to say goodbye to writing crypto articles here. For better or for worse, I try to keep my day job and blog separate. It’s easier that way. My first article about Bitcoin was back in 2017, but I also don’t wanna be accused of only showing up when crypto prices are spiking. Not sharing any promo codes today.
As my writing’s evolved, I’ve realized I like to write about principles in money and life. Not detailed posts about “How to invest in X.” (Feel free to check out some of my older posts for that.)
This probably won’t be my last ever post about crypto, but the last one for a while. It’s been a pleasure — thanks so much for reading my thoughts on crypto over the years.
I suspect things are about to get crazy in the markets.
Stay safe and good luck.
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Footnotes:
- Counterpoint: Most people don’t need to outperform. You can follow widely-accepted good practice and still do very well e.g. buying an S&P 500 passive index fund. Also, maybe you missed out on Google’s IPO, but if you get a job there today — it’ll both be widely accepted as good and good.
Pic from Pexels: JESHOOTS.com
