Mindset Shift
3 years ago today, I decided I’d lump some of my hard earned Queen’s golden nuggets into something called Bitcoin. I had heard about it in 2012 from a person I wish I could have spent more time with to find out how to buy it but that’s by-the-by. The fear of missing out as prices started shooting up faster than the Apollo missions to the Moon was a very strong emotion that saw me buy myself what I thought was an early Christmas present!
This is a terrible mindset to get in to crypto with (or in fact any investment) because you’re investing with emotion, not cold logic. I got rinsed on the 2018 bear market where I was down 94% in £ terms although I still had the same amount of tokens that I bought, it was still a stomach turning period!
As time has gone on, I’ve learned about dollar cost averaging and set up ways to automatically buy without me having to even think about it. I like not thinking, especially after a stressful day at work and seeing the daily notifications come in that I’ve got a few more satoshis is some comfort, particularly this year! Seeing the options out there to earn interest on your BTC has meant that I’m pretty much adopting these crypto savings account instead of the measly, non-inflation beating rates offered by the high street bank!
Security
I had done some studying from a pretty useful document that was shared on a Facebook group called “Crypto Watch” and I was trying to absorb all that was shared. The first thing I actually ended up buying was a Ledger Nano S as I’m all about keeping things as secure as possible and had no intention of getting involved with day trading (something I still never got in to). Once this arrived on 26th December 2017, I was ready to lock and load!
I’d recommend a hardware wallet and Ledger is my go to manufacturer – there’s no way I’m storing any coins on exchanges when I read about the biggest Mt Gox hack and experienced first hand what it’s like with Cryptopia shutting down unexpectedly in 2018 (if I remember). Thankfully, I got my tokens out on to the ledger but I can’t get rid of them anywhere. At least those tokens are still mine… even though I don’t want them haha!
Taxes
If you’ve wondered where I’ve been over the last 3 weeks, I’ve basically gone back through all my exchange transactions since 24th December 2017 when I first registered on Coinbase as I fell ignorant to all the tax implications here in the UK and my goodness, there are nearly 1,000 transactions I’ve recorded across 8 exchanges since I got in! Oops!
My advice is to keep a record of each transaction, the £ value and always have this up to date in a spreadsheet. More information is in the link in the paragraph before to a blog I wrote about what to be aware of when getting in to crypto in the UK. You’ll need to look in to the implications in your own country.
Portfolio Tracker
This has been one of my favourite tools to use and I only look at it once every 5 minutes now! I’ve cut my usage down to once every 3 minutes – go me! All those transactions that I made when I first got in to crypto and just bought a few tokens here and there has helped me keep track of where my tokens are (apart from down the digital toilet LOL).
The one I recommend is Blockfolio. Register an account (it’s a bit more secure in case you lose your phone if you’re not checking this app every 5 minutes) and log your transactions to the exact minute. You can put a note in to remind you of why you bought it and you can have multiple portfolios, which is pretty handy.
All Time Highs
Might as well mention this as I joined when the all time high in 2017/2018 was going on. At that time, the price nearly tickled $20k but it was like the power button was switched off and the prices shut down in February 2020. Sad times.
Anyway, I stuck with it, came in and out of crypto in the 3 years since and now we’re reaching new all time highs (for a variety of reasons).
I have to say, sticking through all this time to be in a position where instead of being 94% down, I’m 74% up has been one hell of a roller-coaster but I wouldn’t change it for the world. The learning experience on owning my financial journey and being accountable for what happens has been thrilling really. To experience the highs, you have to go through some stomach churning lows!
Summary
To summarise, my learning experience so far:
- Do your research,
- Spend time in the game and gain experience,
- Play the long game and dollar cost average if you like low stress investing,
- Keep your crypto secure on a hardware wallet,
- Make a note of every transaction for tax and portfolio tracking purposes,
- Never adopt FOMO as a mindset!
How long have you been in crypto for? What are your learning experiences? Let me know in the comments below!
Take care
Nicky
