Finally I Succumb to the Crypto Carnage

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I am writing this post just to jot down my dabble into the crypto space, and as a reminder to myself, always only invest in assets that I know, and assets that I have conviction in.  If I want to dabble in "risky gamble" for an opportunity in high risk high reward returns, always keep it to a size that I can afford to lose.  Kindly note that this is more of a journal to myself, and I have no intention to mock anyone, or add salt to anyone's wound.

I started dabbling into cryptocurrencies in September 2021, yup, near their all time high.  I signed up for an account with Gemini, and slowly dollar-cost averaging (DCA) into them with small capital.  Every month, I will inject SGD 200.00 into Bitcoin (BTC), and SGD 200.00 into Ethereum (ETH).  Frankly speaking, my intention for this is a gamble into the crypto hype, with high risk high reward returns as the main intention.  Hence, I would limit my capital into crypto at a mere 1% of my entire portfolio.

I continue to DCA into both BTC and ETH monthly until I have injected a total capital of SGD 3.6K into both, of which SGD 1.8K in 0.03193 BTC and SGD 1.8K in 0.43766 ETH.  However, I stopped injecting capital into BTC and ETH when the Luna crash occurred.  It was turbulent times, and I think the risk is too high for me to bear at that time.  Furthermore, at that juncture, the total capital in cryptocurrencies was about 1% of my portfolio, therefore I decided to pause my DCA, possibly till the dust settles and normalcy returns.

For the next few months, prices of BTC and ETH continue to stabilize at around SGD 28K and SGD 2K respectively.  I just held on to my coins, and I did not transfer any of them into cold wallet, aka ledger.  I just kept my coins with Gemini.  The carnage caused by the Luna crash did not cause much fear in me, because in my opinion (with my limited, or even wrong knowledge), I think BTC and ETH will still be safe, even though their prices are negatively impacted by the event.  My thinking is there is nothing wrong with BTC and ETH, thus they should remain safe, despite their value having quartered from highs.

The final straw came in early November with the fall of FTX.  Similar to the Luna crash, the fall of FTT and FTX happened fast and furious.  In a matter of days, bank-run alike events occurred and before I know what exactly is going on, the next news I heard is FTX and its CEO Sam declaring bankruptcy.  A few days later on 13th November 2022, there were news that Crypto.com had an erroneous transfer of USD 400M worth of ETH, which they have recently recovered.  This event presents another red flag for possible issues which made me worried for whatever contagion effect it may have on Gemini.  Without a ledger at hand, I decided to just call it a day and write off my losses in my "gamble".  I sold all my BTC and ETH in Gemini, and cash out all remaining value at slightly below SGD 1.38K, representing a 62% loss (On 16th November 2022, this news regarding Genesis Global Capital and Gemini Earn was released; On 17th November 2022, this news regarding net outflow from Gemini was released).  

Personally, with limited exposure, I am alright with the loss.  Hopefully, anyone caught in the Luna/ FTX saga will tide through this difficult time, and remember, money is a tool, and not an end.  It can always be earned back.  For me, though painful (the loss is equivalent to 3 overseas trips!) but it is something that I can manage and I just got to work harder next year.  However, after I sold, the prices of BTC and ETH actually bounced back up a little.  Well, this kind of thing always happen to me, so I am quite used to it anyway, what matters is I get a good night sleep and need not worry about not getting a single cent back in the event things turn for the worst.  This serves as a reminder for me, not to dabble in something I don't know, and such "gamble" never work well for me (from the fact I never win any Toto I buy).  It is best I stick to my long term Growth and Dividend investing through US stocks and SG stocks and REITs.  Meanwhile, Barista Fire (though a little further again), here I come...!

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