Another suicide has made its way to media scrutiny, and crypto markets plummeting was promptly highlighted as the ultimate cause. It’s time to consider our mental health as investors in light of bitcoin’s infamous feature – volatility.
Bitcoin’s ”Death” Is Not the End of the World
Dear Reader, perhaps you’re considering a jump into the bitcoin investing pool. The waters, while choppy, seem warm and inviting. They are in a lot of ways. Prior to laying down any significant sums, it’s right and good to help you orient yourself for what’s ahead. First, you’re valued. That’s right. For decentralized currencies to work, we have to have a strange kind of faith in your being rational an actor enough to expand the network, either as an investor, hodler, or through development and mining aspects. You don’t have to be a good person necessarily, but you do have to possess at least slivers of our ethos, finding value in a trustless, borderless, payment system and currency. And that you do makes you valuable.
Contrary to portrayals in the media or government schooling textbooks, freer markets, quasi-anarchic systems such as bitcoin and crypto aren’t looking to gain at your demise. Just the opposite is true, in fact: everyone needs you to thrive, to do well. The more people having a great experience with cryptocurrencies, finding meaning within it in their own ways, the more innovation, growth, and eventual adoption. People feeling used, stupid, sorted as if this were some great Darwinian struggle for financial existence runs counter to literally everything bitcoin is about. That’s Old World thinking. That’s the Ponzi of fiat’s newer money getting into favored hands first, circulating down to the rubes later through inflation or redistribution schemes. That’s not bitcoin. That’s not us. We want you to see bitcoin/crypto as a long term project, and nothing like a get rich quick idea. You need to be very much alive to help us all get there.
The world’s most popular decentralized currency has a large, blunt pimp hand: price volatility. It’s brutal. It slaps down those who swagger into its orbit, hoping to strike it rich. The irony is that its crazy bounces, stair climbs, parabolas are what attracted hordes in the later part of 2017. As we’ve seen, it has since been their undoing. Stories in the popular press around the globe are beginning to emerge about the aftermath, from a Washington Post feature on Kentucky’s heartbreaking community of glossy-eyed, fevered bitcoiners to South Korean news about yet another suicide in relation to crypto losses.
Bitcoin has had a price nearly since its inception, not long after. Tenths of a penny notwithstanding, its balloon in this area has been well documented. Complexity surrounds its value, and while authors such as myself feel the tech is in some ways undervalued, really no one expected the damn thing to be units of magnitude like it is now. Sure, you’ll read a variety of claims, but most of that is marketing hype for media attention. Bitcoin has the hash power. It has the miners. It has user adoption numbers dwarfing all others. It has the brand. Might it continue to be the standout among its asset class is anyone’s guess. No one can say with certainty.
Bitcoin Can Die
Bitcoin can die. It can be taken to near zero a variety of ways. The same is true for all cryptocurrencies, no matter levels of decentralization or other salient factors. If you’re considering investing in bitcoin, or if someone you know is, it’s a great time to take some giant steps back. Chances are you’ve never invested before formally in any financial realm, and cryptocurrencies are an easy way to get onboarded and make you appear to be a genius.
To be emotionally ready for crypto, however, consider the following. Pay down any consumer debt. That interest stacking up automatically eats at whatever perceived gains you’re calculating, almost defeating the purpose. A double whammy of losing at the crypto market and still having a credit card payment adds stress, to say the least. Gather up something like a budget. For three months stick to it, shaving off about twenty percent of your income as savings. By that first quarter, you should have a nice little nut relative to your earnings. During that time, check-in on the bitcoin price weekly. Read a few stories at News.Bitcoin.com every couple of days to get a sense of where the market is heading, possible trends forming. Read up on the technology: is it improving? Is its market share still there? And so on. The combination of financial discipline and crypto literacy will lessen shock and toughen you as a long term investor.
After doing your homework, allocate as much as up to half of your savings, not more, into crypto. Buying a basket of currencies is a nice, conservative way to wet your beak. Give yourself a year to see where the money goes, and during that time continue budgeting and replacing your invested savings, taking profits from crypto gains, assuming there are some, and either place those in fiat or reallocate your basket as information on the ground changes.
And do not assume participating in bitcoin and crypto means always having to spend your own money. Participation comes in a variety of ways: people earn digital dough by selling goods and services online; they also begin to take developer courses, teaching themselves the ins and outs of coding; if you’re handy with words, start a blog to educate others. Again, there are a myriad of ways to be part of bitcoin’s pioneering spirit without trying to be a hotshot investor.
Talk About It
It’s alright to have made financial mistakes. They sting a bit more because of the emphasis we place on money. And money is important. It’s a score keeper of our decision-making ability, all things being equal. It tells us a lot about ourselves. But it doesn’t tell us everything. Stories abound about later successes beginning as failures, and often over and over again. That might be your story too. Realize the best of us is guessing, that literally no one understands exactly where crypto is going, and don’t be so hard on yourself if you do lose.
Feelings of despair are natural during downturns. Just realize you’re not the only one, and that this isn’t the first time something like what’s happening has happened. Gallows humor goes a long way, making fun of yourself and that stupid initial coin offering from a Nigerian prince you sunk too much money into. Chalk it up to experience. And that gets easier to do if you approach crypto investing correctly in the first place. You won’t be completely busted. You’ll instead be wiser for the venture, and hopefully better prepared when the next proposition arises.
Religious counselors, mentors, a good psychologist, friends, and family can all be great sounding boards. Chances are they too have anecdotes about investments going sour. Hear them. Tell them. Don’t isolate yourself. Don’t believe for a second you’re not valued. You are. I need you as a reader, Dear Reader. The broader community needs your story, as maybe your goofs can help someone avoid such a mistake. But abandoning all hope is so 20th century, so analog, so government issued paper money. You’re here with us now, 21st century pioneers at the hinge of financial history, and we need your bravery to succeed.