November 27, 2022

My crypto travel from 2011 to 2019

I wrote a lot about how to enter the crypto market, about the basics of investing in Bitcoin and blockchain, and about analysis prices. Today I want to talk about my personal journey into the world of cryptocurrencies and some noteworthy events that I met along the way, since I myself like to read such stories.

Early days - 2011 or 2013?

They say that the Internet does not forget anything. But my electronic mailboxes, which I used in different years, seem to forget something. I am pretty sure that I bought my first bitcoin in 2011, but since I was very interested in how much I paid then, I tried to find evidence of my earliest adventures with this relatively young phenomenon. Unfortunately, in my old e-mail accounts I managed to find only a letter confirming registration on bitmarket.eu in May 2011. Perhaps you need to ask Facebook. I am sure they know the exact date, and they will have the missing letters on the servers.

: Medium

Letter from bitmarket.eu is interesting in that it is a Bitcoin news service, and if I registered on it then, we can assume that I already invested at that time. It also makes sense, because for some reason I remember the price of $ 18 per BTC. But the earliest letters from Mt.Gox that I managed to find date back to February 2013, and the price of $ 18 was also popular at the beginning of 2013. Be that as it may, in the earliest transaction certificate I managed to dig up - confirmation from Mt.Gox - $ 47 is mentioned. Given that there were applications for sale, you can stop at the thought that I bought bitcoins somewhere in early 2013 for $ 18 and sold part a few months later, when the price more than doubled.

The earliest evidence of transactions I managed to dig up is confirmation from Mt.Gox. : Medium

How did I come to Bitcoin? One IT specialist who played with me on an amateur hockey team once mentioned that his friend is mining digital coins. He said that his friend is convinced that this is the future payment method, but also added that he tries almost everything in a row and usually does not show much perseverance. I wonder if he showed perseverance in this case - if so, then now his fortune could be estimated at tens of millions of dollars. However, neither me nor my friend knows anything about this.

I'm not very tech savvy. I would describe myself as something between a geek and grandfather regarding technology, since I once experimented with programming in HTML and Pascal and even developed websites in high school, but this did not go beyond this. Bitcoin attracted my attention for another reason: earnings. This topic has always fascinated me. So much so that I started trading stocks in high school, in 2000, at the peak of the dot-com bubble, then I studied business and in 2012 founded an investment fund, where I work today.

Thus, it is worth recognizing that the mainThe motivation for me has always been bitcoin trading, not the technology behind it. I also read a lot about the technological aspect, and I can say that I am a little versed in the blockchain and really respect Andreas Antonopoulos, whose book, however, I managed to understand only partially. But in the first place for me there will always be trade, as this is what I am fond of and what I am well versed in.

I remember very well how I discussed this with my parents when the price of Bitcoin exceeded $ 150 and my initial investment grew 10 times (although I didn’t have as many as you might think, since I just opened a new business and I had little cash, so this is only a three-digit number). My father thought that playing with Internet money was childishly naive, and a few days later I sold most of my reserves for about $ 150.

Mt.Gox - 2014-2015

However, as a trader, I did not close myMt.Gox account and sold not all of its bitcoins. I kept the part on the wallet on my old computer. Of course, I watched with envy how my "children's" Internet money grows in price from $ 150 during the year (when I sold most) up to $ 800. And although during that rally I basically managed to sit quietly and watch (one of my best qualities), I still traded bitcoin a bit at a price of $ 650-700 closer to the beginning of 2014, transferring coins from my wallet to the exchange. I remember that my balance on Mt.Gox in dollars was approximately $ 4,500.

And just then it happened. Despite all the precautions (yes, yes, never keep bitcoins on the exchange ...) with two-factor authentication with Yubikeyetc., when I wanted to enter my account, there was nothing there. Not only could I not enter, but the site seemed to disappear altogether. The rest, of course, is known to all. Thus, due to the bankruptcy of Mt.Gox, I lost almost all the bitcoins that I had left.

Then, in 2015, when bitcoin cost about $ 400, I first used coins to buy options. As far as I remember, these were my last 2.5 bitcoins, after which I was for some time “Knowcoiner”as they would say today.

Ethereum and The Dao - 2016

Almost two years I was not too interestedcryptocurrency. Then I tweeted about Ethereum. Unfortunately, I don’t know when exactly it was or what message first caught my attention. Then I first became interested in the technology behind the cryptocurrency.

Images: BitNews

You can consider me foolish, but a simple application for sending and storing money (as I understood Bitcoin then; now I know that it can do much more) did not cause me much charm at that timein technological terms. In the end, I do not belong to those who do not have access to banks, and although it is probably not possible to send money through the bank in 10 minutes, the last time I tried it, I sent payments through SWIFT without problems for an hour and without extra costs . Of course, Bitcoin goes further, but this was not enough to hold my interest for a long time. Ethereum on the other hand (for a technically semi-literate person like me)seemed a quantum leap in this regard.

Decisive for me was met meinfographics, where it was explained that the blockchain can be used for decentralized applications (dApp). I realized that such applications cannot be hacked and that they are likely to allow users to control all their data and not give them free to corporations. I was excited.

After reading a little about this topic, I immediately bought onsome exchange of bitcoins and exchanged them for broadcast. Not many of my deals paid off as well as this one. But at first, of course, a fair amount of drama unfolded. I bought my first broadcast for about $ 11 per coin and happily watched how in the summer of 2016 the price exceeded $ 18.

Then the DAO hacked. The DAO, of course, was the first real ICO (yes, I know that Ethereum had ICOs and even had some even earlier, but I mean ICOs with mass participation, which laid the foundation for further movement). And although I did not participate in this ICO and did not knowwhy my ether is so beautifully growing in price, I well learned what The DAO is when the price of ether has fallen. As it turned out, some hacker managed to deduce the broadcast contained in him from the smart contract The DAO. I studied the situation a bit and, since I was repeatedly convinced that it was unreasonable to sell a good asset during maximum stress, I did not get rid of my ether. Ultimately, I managed to gain from this disaster, when the Ethereum community began to lean towards the fork to repair the damage. This meant an arbitrage opportunity to buy an asset that no one wants. Therefore, I added a few DAO coins to my reserves, given the likelihood of reconversion at the issue price, which was much higher than the one at which they traded during the discussion about fork. I did not wait for the conversion, but switched back to the air when the market realized that there was a described arbitrage opportunity. After the troubles with The DAO, I, perhaps, turned out to be a little “richer” than before, after which I did not touch my coins until the end of the year. I also did not go deeper into cryptocurrencies.

However, I often checked the price of the broadcast, waiting for my "lottery ticket" to shoot.

Bubble - 2017

And he really shot. By the end of the first quarter of 2017, despite problems with The DAO, Ethereum became a well-established network in which tokens were traded. Although the computing power provided by this network was intended for dApp, its first real application was the hype of ICO, which defied the best days of the dotcom bubble (when IPOs were similarly popular).

Since the dotcom bubble (when I lost a lot of money) I had one secret desire: at least once in my life to participate in some kind of bubble. I promised myself that this time I will do everything right and apply everything that my first experience taught me in the 2000s, when I joined the game too late.

The first thing that I remember from those days is how what I call on the NASDAQ chart formed "Bubble roof". That is, there was an exit from the previous channel of the trend up, then a very quick jump to a maximum, followed by a fall.

: Medium

In the 1st quarter of 2017 a similar picture was not observed in Bitcoin, but I did not want to just invest. I was waiting for a favorable moment. The deadline set by the Securities and Exchange Commission (SEC) for deciding on an ETF for Bitcoin in March 2017 seemed to me to be a perfect fit. Firstly, I know that the most sensational events in the end turn out to be not as magnificent as it seemed (“Buy on rumors, sell on the news”). Secondly, I was also almost sure that,given the many trust storage issues, the SEC at that time would not give permission for ETFs. Thus, when Bitcoin was trading at around $ 1,200, I set a purchase threshold of just below $ 1,000 in anticipation of a sharp drop in the event of a negative decision by the SEC. I was lucky and my threshold just worked, so I returned to the game of Bitcoin.

But I definitely did not expect what happenedfurther. As we all know, after the “minimum” of March 2017, Bitcoin began to grow steadily. I was tempted several times to sell everything, but I was restrained by the fact that the “bubble roof” described above did not appear. For almost the entire 2017, Bitcoin remained below the channel’s top line. I decided not to repeat the previous mistakes, therefore, for almost the whole of 2017, I also continued to keep a small reserve of ether purchased a year earlier. True, it is necessary to clarify that when I trade an asset, of which I am sure, I always sell a little with every big move up and buy a little with every move down.

Of course, the dot-com bubble taught me something else. For example, the fact that the earliest IPOs were then extremely profitable for those who invested in them before the stock market quotes. So, of course, I wanted to participate in the hype of the ICO. I thought I managed to get into the game at an early stage, but I think I actually invested in the first ICO at about the peak of the profitability of speculation with coins (when invested in ICOs and sold coins immediately after receipt), so in reality I was part of the "early majority". My first ICO was Monaco (which turned out to be a very profitable investment)after which I also played a little with Status,InsureX, 0x and, of course, Tezos (these are the best ...). Most of the ICOs in which I participated turned out to be losers compared to just keeping bitcoins or ether, so I soon got involved with them.

I also happened to encounter a scam. I invested in Monkey Capital (can't believe Daniel Harrison is still not in jail), and although I'm too experienced to buy onsomething like Bitconnect, I still had a few other misses. And although some of them may still have some hope, I wrote them off. And here we come to Tezos.

Tezos is an interesting example, because before launchMainnet, I was forced to "walk." I am not a fan of doing this when a bubble roof appears. So I watched the whole journey, starting from my purchase of coins during the ICO for about $ 1.20 until rising to $ 12.00 before launch and then falling to $ 4.50, which is slightly higher than the increase that I could get if just kept bitcoins, but quite sobering, given that I sold most of the other cryptocurrencies when Tezos cost about $ 10.00.

I have warmer memories of how I bought Raiblocks on the advice of a friend and after a quick reading of promotional materials (i.e., by pure chance) and watched the price increase from $ 4.40 to more than $ 22.00, and also, of course, that I did not sell my air reserves below $ 350.

Of course, I could make more money on the air,but when Bitcoin got a bubble roof, I was sure that it would end badly. I did not know how high the prices would go up yet, but once I thought that they could go up by more than 100%, after which they would collapse. Therefore, from December 2017 to February 2018, I sold almost all of my cryptocurrency reserves.

My best cryptocurrency bets turned out to beEthereum, Raiblocks, Lisk and Monaco, and the worst are Coeval (Monkey Capital), Enigma (due to my own stupidity, I accidentally sent my tokens to the address of the main contract) and Zcoin. And no, I never went all-in. The sums of my investments have always been very small, since this is just a hobby for me.

2018-2019

Then it seemed that we were facing a new world. Cryptocurrencies are no longer in their infancy, at least from an investment point of view. I was sure that Bitcoin will someday reach new historical highs if it survives (and it survives), but those who invest today are no longer early investors. Those who say so repeat the same lie that was said at the peak of the Internet bubble, and my opinion about the current generation of ICO (IEO, STO, substitute any name ...) it's not a secret to anybody. So while I'm still waiting for the outcome of some of my less successful investments, and in my free time (mainly on weekends) Engaged in short-term trading of BTC. Now I am considering investing in tokens by analogy with investing in securities, and therefore I do not invest in them anymore.