- First year investing in Crypto
Just now·3 min read
Up 265% without touching bitcoin
Photo by Roger Brown from Pexels
As a new asset class, crypto has certainly disrupted the investment landscape. I have traded stocks, bonds, and options. While I have researched traditional currency trading and commodities, I have never directly invested in those.
My first awareness of bitcoin was in 2012 when my son mentioned he was mining it (he was a high school sophomore). He explained the mining part and the potential payout, but he was not very knowledgable on the blockchain side. In 2014 we had a blockchain day at work; a few people presented the technology from both theoretical and applied viewpoints. It was a good primer, but I am not an expert.
So with some basic knowledge on altcoins and blockchain, I had it in my head that I should look at it for investing. I held off on any crypto investing, though, as I wanted to see how much of a fad it was, and to have some historical data for analysis.
At the beginning of 2020 I came to a conclusion for myself: crypto is not a fad, and there is enough history to evaluate (perhaps not every “coin” or offering, but as an asset class) for potential investing.
On March 18, 2020, I took that step of buying my first crypto asset. Not blindly, and at $2,000, not an all in move.
Portfolio Value over the last year, screen grab by Daemon Littlefield
Over the last year I transferred money to my crypto account, bought assets, sold assets, and transferred money out. For example, that dip in June 2020 is me transferring money out.
Here are the transfers in/out from the viewpoint of my bank account:
Transfers to/from checking account screen grab, by Daemon Littlefield
Again, that is not the the value of the crypto account, those are the transfers to/from my bank account. As of today I have a net spend of $1,191.66 on various crypto assets.
To calculate my return, and to keep it simple, I am comparing my highest dollar amount invested to the value today. That is the most conservative calculation in determining results.
I am using Compound Annual Growth Rate (CAGR) for this, though, at 54 weeks, it is essentially a one year return.
CAGR calculation screen grab, by Daemon Littlefield
That 1.038 is equivalent to 1 year + 2 weeks (2 ÷ 52 ≈ .038). The start value is the peak amount invested at during the year. The end value is the value from today.
Without a doubt, 265% is a win for one year. Will I achieve that every year? Absolutely not, as asset classes are cyclical in their results. Was that gain worth the research time and risk of the investment? Yes.
What the above includes but does not explicitly show is that not every asset has increased in value. There are some down investments in there.
None of this was with bitcoin, as previously mentioned. There were nine assets involved, some I still have holdings in, and some I do not.
I am not giving financial advice and/or recommendations. I list these for context only. Do your own research and come to your own conclusions ahead of buying any asset.
For the naysayers on crypto, I recommend digging deeper into the services behind the assets, the same way you would review a company (what services/products the company provides, the competitive space they are in, their history, etc). There are opportunities to be found in crypto.
That is the high level view of my crypto investments thus far. There is definitely more for me to learn, and opportunities to be found.
- Date of publication:
- Fri, 04/02/2021 - 08:53
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