I Just Lost a Bunch of Money on Bitcoin. Here’s How I’m Dealing
Here's how to survive a bitcoin crash without panic selling it all
Fox Van Allen
The current bitcoin market can only be described as a dumpster fire. And I’m definitely feeling that pain.
Like many of you, I bought into bitcoin for the first time back in December, purchasing my first hundredth of a coin when it was near its all-time high of $19,000 per. As the price continued to drop to its current rate of $7,500, I continued to make small purchases.
All told, I spent $340. That stash is now worth just $200.
That loss is small potatoes in terms of total dollars, but it still represents a 40 percent drop in a couple months. More worrying, the crypto mining rig that I built recently isn’t turning a profit anymore.
I’m drowning in the unholy trinity of crypto investing: fear, uncertainty and doubt. Here’s how I’m surviving in these trying times.
I won't sell. I won't. I won't. I won't.
Yes, panic selling is really tempting to do in an ugly market like this one. It seems like bitcoin keeps carving out new, lower prices every day. I could get out now and save myself some pain.
But I’ve been chased out of markets by ugly charts before. I invested in dot com stocks back in 2001, convinced at what a transformative force the internet would be. I bought high and sold low. And then I never bought back in. I missed out on some really great long-term investments such as Amazon, just because I had weak hands. Had I kept $200 in Amazon circa 2002, it'd be worth over $28,000 today.
I know my bitcoin may -- hell, it probably will -- lose even more in the weeks to come. But I don’t stress about it. I’m in it for the long haul, because I believe bitcoin might be the "next Amazon."
Sure, my fraction of a coin might never be worth $28,000. But based on what some analysts are saying, it definitely could be.
Besides, selling here would only cause me to suffer transaction fees as high as 4 percent. That's just a few bucks, but I've already lost enough. I’m just going to HODL for now… and maybe buy a little more once the price stabilizes. (I just won't buy it at an ATM.)
One trick helps me forget my losses and beat stress
Last month, I transferred my bitcoin from an online Coinbase account to a paper wallet. My motivation was to better protect my coins from hacking.
I realize now that there’s another great benefit to keeping a paper wallet. I still follow bitcoin’s daily price movements, but I no longer have a phone widget that tracks the total value of my coins from minute to minute.
I would never embrace total ignorance. That said, I know that checking my bitcoin balance daily is not good for my sanity right now. A little bit of apathy toward daily movements goes a long way in surviving a nasty bear market like this one without panicking.
I’m mining less and enjoying life more
The drop in crypto prices has also caused me a lot of worry over my mining rig. It’s still making money… for now.
A few weeks ago, I reported that I was making $40 to $70 in profit per month. Today, at current prices, I’m on track to make just $8. And because mining difficulty keeps increasing with time, my rig will likely start losing money in April unless coin prices start to rebound.
The good news, though, is that my crypto rig doubles as a souped-up gaming PC. The opportunity cost of video gaming has dropped, so I’ve been having fun on it more and worrying about mining cryptocurrency less.
Sure, playing Overwatch and Civilization VI doesn’t actually make me money. But it’s a really nice distraction from the daily horrors of this bitcoin bear market.
And when the price of cryptocurrency rebounds, my rig will be right there, ready to take advantage.