Lost so much $ on cryptocurenecy . what to do
I invested a w 6-figure number on bitcoin and etherum 2 months ago. Watched a profit turn into a large loss. Pretty uh I am paralyzed. Work going downhill. My life feels ruined Any advice
First, completely ignore anyone who says “I think it will go <up|down>, so you should…” or “Sell when the time is right.”
Trying to time a momentum-driven investment and failing is what got you in to this problem. The first step is acknowledging that this was a dumb thing to do and that you don’t have any more skills at reading this market than anyone else (and some random commenter sure doesn’t).
Second, that matters because it lets you reach this conclusion: your current portfolio value is all that matters. You can’t undo the losses, but you have complete control of what happens to the remaining principal. You bought a very expensive lottery ticket, it didn’t win, and now all you can do is decide whether to buy a second very expensive lottery ticket (hold) or learn from your mistake and do something smarter, like actually investing this.
Ask whether, today, you can afford to have X% of your investable assets in a single asset. Based on your post, it sounds like X is a large number, maybe even over 50%.
Assuming you can't afford it, start here: https://www.fidelity.com/viewpoints/guide-to-diversification
Note that you don't need a plan in order to liquidate and hold cash. Don't get hung up on not having a plan; cash is a fine asset.
The other reason acknowledging to yourself that you can’t time the market matters is that, if you sell and then it goes back up, you shouldn’t feel any worse about it than, say, if Google’s stock or some random smallcap stock went way up and you didnt own it. You didn’t “miss out” on anything, you opted for diversification and predictability - that is, market-average returns - ahead of a lottery ticket.
(ObDisc: None of this is a commentary on cryptocurrencies, good or bad, only on taking outsized risks with money one can’t afford to lose without caring. OP’s remaining principal obviously is not that or s/he wouldn’t be here.)
Third, after dealing with the time-sensitive stuff, consider seeing a therapist to see whether some underlying issue led you to take this much risk. Not at all a value judgment, but taking huge risks with money you can’t afford to lose may be a manifestation of self-destructive tendencies or at least a sign that it’s time to make some changes in your normal life. Good luck.
PS in case it makes you feel a little better: many people have spent a larger percentage of their assets self-funding a startup than you lost – and also gave up years of their life and opportunity cost to do it. Life goes on. The important part is to incorporate what you've learned into future decisions (starting now), and to assess what led you to do this in the first place.
Focus your efforts on things in your control. To put your energy and efforts into things outside of your control is not only irrational but it'll bring you paralysis and misery.
I thought this was sound advice.
Take your mistakes as lessons learned. Many lessons learned are extremely tough. Everyone goes through many of these throughout their lives. They're still a lesson nonetheless. This shall pass, you've lost money, but gained in experience. You've tried something. Taking risks is an essential thing in life if you want to grow from your status quo. It's a matter of learning to better assess the risks the next time. Your past and present need not equal your future.
Money is abundant. Skills are more rare. Focus on skills that enable you to grow. Learn to take better risks the next time and you increase the odds to your favor in the future.
All the best to you.
As for now, well you're in a bit of psychological bind. No one knows whether crypto is going to be $6000 tomorrow or $8000 and no one knows what it might be in a month. You can't time the market - whether that makes you hold or sell (or partial sale), that's your own decision but you'll have to live with it so really mull it over. If you do sell I would advise totally cutting any crypto news out of your life, if you sit there and watch the price you'll feel sick, no matter which way it goes and if it does peak over your sale price again you'll constantly think you could have timed it (you couldn't have, that's why you're not sure whether to sell or not now.) Also you need to keep work from going downhill, at this point you need your cashflow. If that means a short vacation to reset that's up to you but no watching crypto prices on vacation!
TLDR: you gambled and you're not a gambler. Don't do it again and keep your job in good order.
1. You can sell now and cut your rather massive losses - I'm guessing that's around 40-50% of your initial investment based on a two month old purchase. Advantage: You save any further losses and have no more continued stress (this is big!).
2. You set a price floor and/or ceiling and sell when it hits that level. Same as above but you gain the ability to define a range for potentially cutting losses at the risk of increasing them. The advantage here is you decide the level of continued risk and lack of peace of mind you're willing to live with.
3. You settle in, accept you can lose every cent you invested, and just hold long term, hoping that eventually (1 year, 5 years, 10 years?) you'll make your money back.
One thing to keep in mind with all this is the opportunity cost of capital i.e. a dollar today is worth more than a dollar tomorrow, 100k in a bank account in 2017 is roughly equivalent to 130k in 2027, so if your investment reaches a value of 100k in 2027 you'll still be operating at a rather large loss.
The average person doesn't need Bitcoin. They need Vanguard.
I think using a catastrophic medical event, like a terminal illness diagnosis, is a good technique when trying to consider if a situation is really that bad. Of course, a terminal illness diagnosis is also something that can be accepted and overcome with stoic resolve, but it is a good yardstick for something like losing a lot of money with an investment.
Gee, almost every day, or multiple times a day, I read mention of Stoicism (usually M Aurelius, occasionally Seneca) on HN. And almost never any other type of philosophy (in the wisdom of life sense).. I guess Ayn Rand a few times. I wonder why that is. It's surprising because I don't think I came across anything about Stoicism more than once every year or two before I came on here.
Please speak with your family and friends, and if you need professionals to help you cope with what you're feeling, give the National Suicide Prevention Hotline a call.
How badly do you need the money? What percentage of your net worth did you put into crypto? I advise keeping less than 10% in speculative assets.
Most crypto behaves like a penny stock, with the same sort of pump-and-dump schemes, relatively low volumes, and many people trading on hype, hoping to get rich quick. Bitcoin swings wildly for almost any reason, or no reason at all.
Yes, you can make money with it, but I wouldn't suggest anyone invest the majority of their cash into it.
Sell now and accept the loss and move on. This will be a hard thing to accept but you will not have lost everything.
Suck it up and wait for it to appreciate further. This may take years or you could lose the lot.
Edit: I am not a financial adviser.
i bought alibaba for 115$/share shortly after its ipo. it sank like a rock almost immediately after. it continued to the 60s I think, but i held onto it because i believed in the story and its worth. I eventually sold at 185$/share about a year later.
not sure if this helps you though, stocks and cryptos are fundamentally different. I didnt look at current numbers, I looked at the story and what I believed was ahead.
There was plenty of time in between to get back in after seeing the uptrend. (Full disclosure: I've been holding since 31.)
Life is a long game. Investing is too. Unless you need the money to live, I'd give yourself a timeframe like 6 months and sell your investment by then when you feel the time is right. Don't panic though as 6 months is an eternity for cryptocurrency.
Unfortunately huge losses and common with volatile investments. I have my money in ETFs. When the cryptocoins are 10xing in value it's hard not to get jealous but I prefer relative safety vs huge swings.
Same thing in life. It might help to check your happiness in 2 weeks, a month, 3 months. It seems like forever when things aren't going well, but it's not that long in terms of a long life.
It also never hurts to find a coach or counselor you can talk to in person. $100-150/hr sounds like a lot but with the right person you can get a lot of value too and hopefully a fresh perspective.
PERSONALLY, if it were me, I would hold on, and I'd bet you will get back to being in the black. That said, you need to understand this is an EXTREMELY risky investment, and it could essentially go to zero just as easily as BTC could go to $50k. If you are not OK watching all that money go to zero, sell. If you are not OK watching BTC go to $50k having sold it ALL, sell most of it, and keep some.
Realize you have gambling tendencies, and make a plan to get out. You sound like the kind of person who will double down when it gets up to $30K/BTC, and then cry again when it crashes even harder.
Don't bet money you can't stomach losing in this space. There are WAY too many failure modes.
Note: I am not financial advisor. Speak to a professional before you light massive piles of money on fire.
(edited for spelling)
My best advice is: no coffee, no booze, no drugs, try to sleep, exercise, See a doctor, physical and mental. Pay a financial advisor and get an impartial ( not on this forum, opinion of what to do. ). Take a low stress vacation, cruises are good, clearing your head is what vacations are for. Science says you need AT LEAST 2 weeks to de-stress, so make it real. Either you take a vacation, or your job takes a permanent one from you.
It's a loss, possibly not permanent, but it was a gamble. I had no gamble, just an 8 figure loss.
I think it comes down to our nature to take $10 today and not $50 next year. It's hard to send 10% of your income to a 401k knowing that that money is locked away for another 40 years. This will, I think, naturally cause people to dump money into stuff like Crypto; the line is going up and stories abound of people turning $1k into $100k. Nobody reads beyond the headline to find out that they held over years.
There is no warning on Coinbase saying "hey. you should not due this to the extreme volatility" for any transaction over $500. And when you hit ok, you are asked again "You realize that there is a good chance that you will lose this money?". Coinbase (and I'm not picking on them, but they are the only ones I know) don't care. They want the commission. Schwab, what I use, has a feature that says "Yo. You got some F Grade stocks. You ... You shouldn't do that unless you really know what you are doing."
FIAT currency, using the greenback as an example, works because we have the Fed making sure the liquidity remains constant to ensure stable value. If I horde USD under my mattress, and I have enough to affect global liquidity, the Fed would release more greenbacks on to the market to make sure the economy keeps moving and the price doesn't fluxuate too much. I start to use my stash, the Fed will soak up some of it to reduce liquidity. Crypto, by its nature, doesn't have this. Crypto is trying to be the new Gold, but Gold doesn't have much place in our global economy any more. Nobody is conducting trades with a volatile mediums anymore. There is a reason that nobody* is on the gold standard. I don't know enough to say why.
I think we might be able to revisit the idea of crypto in a couple of years as a viable currency in a couple of years, but we have to wait a long period of stability or some serious evolution. I have no faith in a currency that doesn't have some banking capabilities.
The communist ideal is a society where inequality doesn't exist. A perfect social paradise, but as you point out, this is not in human nature. Most people will try and hold on to any power that they can get. I like to think that I'm not like this, but that would be naïve of me. We advance because we see that new car and want it.
Disclosure: I have formerly worked in Prime Brokerage Tech at Goldman Sachs and an HFT focused on the US Muni and Corporate Bond market. Currently in wine tech though ;)
1. Because they can. Other countries don't pay as much, so they can get away with increasing their margins in the US market because they can't elsewhere.
2. The R&D is a shitload. With research, they are making educated guesses at stabbing into the dark to find something that works in their lab sample. Once they find a promising lead, they dig into that. If it shows promise, they start to experiment on rats. If that works, they try it in humans (phase 1) to see if it kills or harms people. This is where they see if it actually works in a human. Then, once there is evidence that the drug doesn't kill a person, this dose has shown some results they get more people (phase 2). This shows that the drug is generally effective and what side-affects happen. Then, they give it to a large population (Phase 3). Sometimes the FDA will allow them to skip this step if Phase 2 was an overwhelming success.
That process can cost millions, if not billions. People say that "this drug only costs $0.02 per pill to make, why are you charging $100?" Because they only have 7 to 11 years to recoup the R&D costs before Generics can move in produce the drug. The method of using Universities and Research Institutions helps mitigate some of the initial R&D, which is why you hear "Harvard Scientists discover cure for super-aids." In the lab, they have a drug that in their testing cures super-aids. The next step is for a drug company to buy it and let their R&D department go to work.
And when you are in the trials phase, you have to convince humans humans to be test subjects, which means giving them money, doctors to run the tests, and pay for any healthcare costs that results in side-affects. That costs money. And then add in the costs of making sure literally EVER is documented, numbers add up, and every possible question can be answered. The FDA, for good reason, goes through everything with a fine toothed comb. If something doesn't add up, numbers change from document to another, or something minor was overlooked (like the drug was kept at 10C at Site 1 and 10.5C at Site 2), the FDA will come back and demand an answer. It's all red tape, but for good reason. It's the reason why everyone really freaked out when Trump was floating that crazy dude for the FDA. It's the last place you want lax oversight. AFAIK, most countries deffer to the FDA's recommendations on allowing drugs on the market due to it's strict oversight.
3. As I mentioned, there is only a limited period where they can make money before other manufacturers can start making the drug. Any sunken costs must be recouped by this point, which drives up the cost.
The fluctuation against the USD means little to me. For obvious reasons, the exchange rate means something to me, since I can't buy very many goods with Ethereum. I'm also not relying on crypto as a source of income, so the exchange rate doesn't matter much to me. I don't see crypto as a get rich quick scheme -- it's a fascinating technology with the potential to change the world. I want to be a part of that (just not too much of a part of it :D).
It's going to be hard - but there is someone out there with the same job and same amount of assets as you, who isn't unhappy because they never had the higher amount and lost it. Logically you can be as happy as that guy.
How you got the money in the first place may have a bearing here. If you worked hard for it or it is inherited there could be anger/guilt attached. It's worth thinking about and processing that.
Work is kind of a separate issue and probably totally fixable. A separate ASK HN or StackOverflow question might help there get you in the right direction.
Get a financial adviser is a good point mentioned below. Also if you are in financial difficulty you should get advice about that too (debt consolidation etc.).
Should you hold the coins? I don't know. I've lost a bit of money. Not trivial but not devastating amount. I will probably hold it for a few years. I went in knowing I could lose it though so I thought about "what if this happens" already.
It seems to me the real question here is whether you are in danger or distress, or whether you're treating distress to your profits as distress to yourself. Hence the practical questions.
Check news stories and price charts back few years and see if you notice any patterns.
Buying at wrong time is painful.
Selling at wrong time is double painful.
You've suffered a large loss. You'll have to find some way to draw a line in between your present and your past, and to move on.
Make a decision about cutting your losses on this investment based on the understanding that anything you leave in could plausibly depreciate further.
Enumerate your opportunities. Focus on how you can use and build them in the long term.
Same with every high risk investment, never put in anything you can't afford to lose.
Edit: I am a financial advisor, because this is the internet and I can be what I want. Mom said
Secondly, zoom out and reflect on your life. You have your health, probably a caring family and new opportunities in life. Do something you like, and enjoy your life.
Did you really think you could just get in at any point in the crypto lifecycle and the value would keep rising, and rising, and rising? Especially if you got in when there was a media frenzy?
We seem to be approaching the "despair" phase, as your post clearly implies:
http://www.thegoldandoilguy.com/wp-content/uploads/2012/11/S...
Remember you only take the loss if you sell now. Do with that information what you will. But I think in a year's time you'll regret selling for 2/3 loss. And you'll probably want to get in again after the crypto value has risen another 10x, and all the media talks about it. but with only 1/3 or less of your money. Rinse and repeat.
I would try to paid attention to this first. How can this mistake ruin your life? Or is just many other things accumulating?
The loss of money is a done deal, but the others look like solvable things.
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After taking care of the other more important things, look at the investment and use the advice elsewhere.
Also, you can understand this:
You still have the same value of BTC/ETH, but is the conversion to USD that is suffering. Is like if you get 1 bar of gold, was a US100 now US50.
But you still have the gold.
You HAVE NOT LOSE BTC/ETH. Is the CONVERSION MARKET that is VOLATILE.
Now, some investors are hungry for cheap BTC/ETH. You could turn a minor "profit" for it.
Also, you can FORGET ABOUT THE USD and start trading to increase the amount of BTC/ETh. If the loss is so bad, lose all is acceptable to you? Then after you mind is free of FEAR, you can only get up. And if not, is already a lost cause, cause that you have accepted.
Or just wait.
P.D: I also "lost" the value of my cryptos. I'm not on hurt because I never put my life on risk.