Comment by sillysaurus2 | Hacker News Reader

Comment by sillysaurus2 | Hacker News Reader

Can I catch a break?

http://news.ycombinator.com/item?id=6926472

http://news.ycombinator.com/item?id=7195024

http://i.imgur.com/5TAwopR.png

There are few times in my adult life I've felt like crying actual tears, but this is one of them.

Four times since that first comment, the bitcoin price has recovered to $1,000, then dipped back down again. Four times I didn't sell.

The silver lining is that Gox's explanation is correct on a technical level. There is every reason to believe this explanation to be true. This isn't (just) me being hopeful; this is because if you investigate whether it's true, you'll find out it is true.) For further details see https://news.ycombinator.com/item?id=7203544

Since I've only been able to withdraw 3.4 bitcoin, I'm at the mercy of Gox. It's entirely possible that I'll wind up with less than $1,000, from $11,000. An expensive life lesson, but at least it's recoverable.

EDIT: I apologize if this comment didn't contribute anything. I sometimes use HN for moral support. I'm just shocked at what's happened.

EDIT2: This surely shouldn't be the top comment... it's important to get information out to people in a crisis situation like this. This was just me being sad and gathering information from those more experienced. Thank you though.

You clearly do not have the heart for asset speculation. I am not trying to be mean here, but the emotional reactions you show in these comments and the fact that they utterly destroy your ability to stick to the rational decisions you've made, is comprimising your investment decisions.

So there's two paths from here: Either this is the experience that hardens you and makes you stop thinking "oh shit, I just lost two months' salary in six hours" (this happens all the time when you have a significant amount invested in a volatile asset), or you realize that things won't change and you can't live with the risk of losing your investment.

If you choose the latter option, you will also need to stop kicking yourself if three years from now, the asset you sold has trippled in value. In fact, you should stop kicking yourself right now. The problem here is your emotional reaction, not Bitcoin's volatility. I know how you feel; I've been up and down $30,000 this year over the course of a few weeks in the stock market, but second-guessing yourself only serves to waste your attention. Make a plan, know the consequences and stick to it.

Thank you for your insight. How do you decide when to sell? I had four opportunities and let them all pass by, because I was hoping "this time I'll recover my initial investment." That's greed, of course, but how do you make a plan and stick to it in these circumstances? Do you decide ahead of time that you're willing to walk away with a 20% loss, rather than wait a year and see what happens?

You are stuck in classic gambler's conceit[0]

(Essentially: when you are behind you believe that you can quit while you're ahead, but when you are ahead you feel confident and prefer to press your luck)

In general, if you are investing some place that makes you feel anxious or emotional about the consequences, it's far too volatile and you should cut your investment down.

The best way to escape from this situation is to make an exact plan and stick to it. Would you rather walk away now, or risk a worse loss later? Then, at what value will you cash out? I understand you are attached to your initial investment cost, but really 100% is the valuation now, since the rest is sunk costs. Decide how you like, but firmly - take the emotion out of your decision making.

[0]https://en.wikipedia.org/wiki/Gambler%27s_conceit

I think speculating in Bitcoin is definitely not for the faint of heart :)

The only solution to this problem is exactly that one. Make the plan BEFORE EVEN BUYING the assets AND commit to it, as tightly as possible. If you can get a machine or an unemotional third party to execute the plan, even better.

Else you'll be stuck in an infinite loop of second guessing yourself and what-ifs that do not contribute to either your financial stability or your sanity.

If the plan sucked, you can revisit it on a later round, and if not completely sure about your plan, you can do mini runs of it to test, but the important part is to stick to deadlines/commitments so the anguish stops.

First off, you are a short-term speculator. This is a subject I don't know very much about. For all practical purposes, you are gambling. The answer to your "should I see what happens" question is equivalent to "should I roll the dice with what's left of my money"? You don't have an investment thesis, i.e. a theory of what will happen next. If you did, your decisions would be easier (although you would still be exposed to risk).

But in general terms: Don't invest more money than you can stand to lose. Have an investment thesis. As long as this thesis holds, don't sell and don't even check the value of the asset you are holding. Don't invest in volatile assets with money that you will need in the near future (within five years or so).

Forget the price at which you bought your asset. Always keeping this in mind leaves you horrendously exposed to the "sunk cost fallacy". Ask yourself instead: If I had nothing invested, would I buy at this price? If the answer is no, that is a strong indication that you should just take the loss, or even sell if the price has increased.

You could also have a plan beforehand, i.e. sell if it's down more than 30% or if it's up more than 60%. And if you make such a plan, you need to stick to it.

Taking a 20% loss on an asset like Bitcoin, which has appreciated >10,000% in a few years is really not a big deal. This is the king of volatile assets. If you are consciously investing in such an asset, you should be able to shrug at either a 50% loss or a 100% gain. Most people would (perhaps rightly) call you crazy for keeping a significant part of your investment portfolio in such an asset.

Here's my gameplan.

Ultimate Goal: Produce 300k+ from 7k. Insanely unlikely, I know. But if things unfold like I'm hoping, this will nearly close out my mortgage; a life-changing event for a family man such as myself.

Disclaimer: Don't play with money you cannot afford to lose. I have 7k that I can burn on crypto. I won't be happy to lose it all suddenly, but it won't put me in the poor house or ruin my daughter's college fund. My true family funds are in e-trade.com collecting dividends 'n such.

Overriding-rule: Never be 100% fiat or 100% coins. Be ready to make a buy or sell at any moment.

Back in Nov 2013 I put in 1k and the market promptly crashed afterwards so I have 26 litecoins(at $40 each) I can't sell for a long while. I knew my luck from experience on e-trade, so this didn't phase me - it always starts this way. The next 1k I sent into crypto-coin world is at btc-e.com where I day-trade. At first I bought and sold quickly, simply making 4 to 5 dollars. Just getting use to how btc-e.com works and its transaction speed. Then I started to make bigger and more long-term bets as I observed the big swings. It appeared to me after a few months of watching that Litecoin biggest swings are between $18 - $29. So when MtGox had its recent issues and "Russia banned bitcoin" pulled the price down, I bought in. I'll make about $600 when Litecoin reaches $29 again. But on the other hand, if the price of bitcoin goes below $500, I will put in 1k for the 3rd time. If bitcoin falls below to single digit numbers[1], then I'll buy 3k more. This brings me to my limit of having 7k in the crypto-coin world. I will now sit back and wait.

If we ever see $1,000/BTC after the events I describe above, I will sell everything I have - producing at least 300k. I'm done. Or, BTC will simply fall into oblivion and I've lost 7k. I'm "fine" with that, but I'll always make sure to have copies of my private-keys for the rest of my life... just in case.

1. http://www.businessinsider.com/williams-bitcoin-meltdown-10-... ...very unlikely, but if it happens I'll have USD waiting.

So let me get this right, all you need to make 300k is for bitcoin to drop to single digits, then go back to 4 digits.

That's not a plan.

http://arstechnica.com/tech-policy/2011/10/bitcoin-implodes-...

Well, whatever you want to call it "plan"/"strategy"/"hope"/"insane dreaming". About this time last year, if I executed on my "plan" I'd have reached my goal in Nov 2013. Bottom line is I think bitcoin still has a disaster or 2 or 3 ahead of it that'll tank the price; only to recover a month or 2 later. With all this MtGox drama happening + "Russia banning bitcoin", I'm poised to move. Also, this list[1] was front-page of HN at one time. If #9 actually happens, combined with a disaster that makes the price tank - say, MtGox shutting down & "USA bans Bitcoin!!", then I'd be set.

I know my "plan" depends on 2 unlikely events. Probably won't happen, but this is bitcoin we're talking about. Nobody knows what will happen yet. This is my "plan" based on the craziness I see of bitcoin. Nothing really that special; buy low & sell high. Call me crazy but I say coins still has a few huge swings coming up in 2014. MtGox is already causing one right now. Even if these extremes don't happen, I got 1k that I'm day trading with under smaller swings that I'll at least earn back the 2k I've put in so far if not more.

1. http://lightspeedindia.wordpress.com/2014/01/13/bitcoin-2014...

Bonus: Reddit is doing a good job of getting people all riled up to cause these big swings... http://www.reddit.com/r/Bitcoin/comments/1xitx4/im_giving_1_...

I'm talking out my ass here, being personally allergic to asset speculation, but I'd like to make a suggestion purely on the basis of psychology and rational decision making.

I think you're too hung up on the fact that you used to have $X in BTC and now you have $Y. Instead, just start from the premise that you have $Y. Your goal isn't to recover your old $X, it is to grow your $Y as much as possible.

What is currently the best investment you see available to you? Is it Bitcoin, or any other cryptocurrency? Are you better off with cash or a low risk CD? Maybe a mutual or index fund, or is there a country whose debt is currently going for a good price?

Once you know where you're going, it's a lot easier to get there. If you think Bitcoin has the most potential at a level of risk you're willing to accept, leave your money there. If you think something else has a better combination of risk and reward, move your money there.

No, you are still learning the lesson, it's not been learned at all.

You are being illogical about your investment. Go back to the moment you bought the Bitcoin. You apparently thought they were worth $1000 per Bitcoin at that moment, there is nothing wrong with that.

That you invested in Bitcoin means you expected them to rise, do you remember how much you expected them to rise? In what timespan? Does the price going down for now affect that estimation? In what way? Why would you sell your Bitcoin?

There's answers to all those questions that go in every direction, but they lie in the future, so the only thing you can do is make a reasonable prediction, and hope it was realistic enough.

Some people think Bitcoin will go to $10k, some people think Bitcoin will prove useless and die out. Decide in which camp you are.

About MtGox: If MtGox would somehow mess up bad enough that your money/btc is not safe there, that would hit the BTC so bad that its value would at least half, if not more, at every exchange. Trying to withdraw your bitcoin now is madness, you're just risking getting it stuck.

Be careful with your panicking. I myself am too afraid to go long on Bitcoin, if I had I'd have over 10x my original investment now, instead I just speculate and profit from panic sellers, it's fun and pretty low risk. I sell whenever Bitcoin is stable, and buy whenever there's panic.

I don't believe in Bitcoin being worth $1000 right now, but I do believe that the technology and ideas are solid enough, that whenever there's a panic the price will recuperate fairly quickly as people realize not actually all that much changed.

Did you not understand what you were getting into? Did you imagine it would rise forever? Did you think that an unregulated exchange in a foreign country designed for a different purpose was a safe bet? Did you ignore the rising tide of complaints about Gox?

http://www.shareprice.co.uk/pages/risk-warning-trading : "You may not necessarily get back any of the amount you invested."

Why did you use MtGox. You should of done research before investing that much money. If you'd done rudimentary research, you would of immediately seen that MtGox was a very risky exchange to use... even just for very short term transactions. I'm lost as to why anyone actually still used MtGox over the last 6 months or so.

Secondly if you can't stomach the swings in Bitcoin, it's not the speculatory investment for you. You need to have a plan and stick to it. Buy and hold for 5 years is a reasonable plan.

I'm sorry if this isn't sympathetic, but you need to learn from your mistake.

Having gotten in when they were so (relatively) "cheap", it's hard to imagine pay > $1000/each. I certainly can't complain, as I bought $10k BTC at $7/ea and sold 'em when it hit $30 (c. June 2011), but I sure wish I had held onto 'em!

I suppose it is viscerally obvious to you at this point, but putting money into something like Bitcoin should be considered one step up from putting it all on 31 and letting it ride: don't do it with money you consider important.

Indeed. I was young and dumb, as so many before me. Lesson learned.

I don't get why people who don't trust banks go and deposit money to the first BS "service" that's a guy and his dog, implemented in 2 weeks, full of holes and bugs, and with nothing much as financial assurances and security that you'll even get your money out.

Because banks are "the Man", while bitcoin is "one weird trick .. bankers hate it!" Social proof by negative.

The crypto also triggers a geeky faith in technology. Because the crypto is sound, it's just the way it's being used is problematic. And the institutions around it are very flaky, but geeks hate institutional politics and dream of eliminating it by technological fiat.

Who said they don't trust banks? I think what you are really asking is, "Why would people who see a get-rich-quick opportunity put their money in such an operation?"

Don't panic, the way I see it, is that this is another temporary crash in the price of bitcoin, caused by bad news. Once the mtGox problem is out of the way, bitcoin may resume it's rise. May is the operative word there, of course, but I think it's likely.

Don't expect sympathy from us. It's not like you did a load of hard work and then got taken advantage of. Depending how you look at it you put a bunch of money either into a gamble, or betting on your own judgement (which, if bitcoin loses its value, will have proven to be wrong).

Someone just sold for $102 on btc-e. Be careful out there!

On the other hand someone bought on btc-e for $102. Good price...assuming the current spiral downward on the Mt Gox news reverses.

If Bitcoin is here to stay, the MtGox debacle won't have any lasting effect regardless.

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