That One Valentine’s Day I Regret The Most

Why the most proven strategy is always to “HODL”

On February 14, 2013, I had dinner with a girl I liked. We went to this fancy restaurant with a spectacular view of the Bow River. I eventually won her over. But long story short —the relationship didn’t work out because I think we both needed to work on ourselves at the time.

I couldn’t remember the restaurant name, but it had the words “charred” or “char” in it. But what I could remember — with a passion — was the overall money I spent in preparation for that day. I probably spend around $625 US dollars in gifts, clothes, and reservations leading up to that day. I used to be very bright-eyed when I was younger, and when I started liking someone, I had to give it my all. The raging hormones of adolescence also didn’t help in any semblance of frugality.

As I grew older, I began to look up to famous, intelligent, and insanely rich people. Individuals like Elon Musk, Bill Gates, and Jeff Bezos served as the my personal ceiling for human achievement. I would often jokingly refer to them as “The Holy Trinity”. Now it may sound like I’m a really shallow and materialistic person, but the way I see it, these guys had drive, laser-like focus, and were wise enough to lead their respective companies to the top. And that — I think — is commendable by all accounts. My favorite among the three would probably be Elon Musk, the CEO of Tesla. Meanwhile, in the uncharted waters of the deep internet, the cryptocurrency known as Bitcoin has slowly started to gain momentum, and Mr. Elon himself would one day be one of its champions.

The rise of cryptocurrencies

News of Bitcoin erupted around late 2017, where it reached its previous all time high. In just a matter of three months, its price grew exponentially from $2,000 USD to around $20,000 USD. It seems as though that countless people just got suddenly rich overnight. The media suddenly turned its attention to the newest fad, and everyone was talking about how it will revolutionize transactions in the future. Sadly, along with the meteoric rise of Bitcoin, numerous scams, Ponzi, and exit schemes also surfaced around these times.

Because bitcoin was unregulated, it became a reliable substitute for wire money transfers among criminal organizations including drug cartels. Receiving calls and SMS scams claiming to be tax “agents”, police officers, endangered family members, or “Nigerian princes” were very common in these times. These scammers would demand victims to send them money in the form of Bitcoin. Large-scale exit scams who posed as legitimate businesses and services also cashed in on the bitcoin craze. The most notable of these exit scams were Bitconnect, where the service promised massive returns in investment in a manner similar to a Ponzi scheme. In Canada, QuadrigaCX, which at first, operated as a legitimate trading platform for bitcoin, soon revealed itself as a fraud. In a statement, they claimed that their CEO has suddenly “passed away”, and the billions of dollars worth of “keys” that were stored in his computer, that can only be accessed by himself, can no longer be retrieved. Of course, after a thorough investigation from the feds, it was found out that this was all a ruse, and in reality, the heads of the company took all the money for themselves and ran away with it. This has since served as a cautionary tale for traders, that when your coins are on an exchange, your money is technically in their hands. There are numerous accounts of victims who have lost their life’s savings on these types of scams, and there is no shortage of self-published YouTube footage showing their disdain and regrets.

HODL and Tesla

As of February 12, 2021, Tesla has announced that it had bought 1.5 billion dollars worth of Bitcoin over the last 12 months. A move that would essentially have made their investments grew around 350%. This news suddenly drove the price of bitcoin up thousands of dollars in mere minutes. The data also revealed that this move liquidated $1.2 billion-worth of short positions in recent weeks.

I guess one of the better appeals for Bitcoin, and it also goes with any other cryptocurrencies, is that it’s relatively easy to purchase; barely even an inconvenience. Which is why — going back to my story — I wish some crazy guy back then convinced me to buy Bitcoin. There is this meme-like concept called “hodling”, which some would argue has its roots from an early typo in a financial advice to “hold” on to your money, but has now become the anthem of the Cryptosphere. Some have also used it as an acronym for “Hold On for Dear Life”. It basically means to hold on to your cryptocurrencies no matter what happens.

The price of bitcoin on that faithful day of February 14, 2013, was 25 dollars. And I’m no genius by any means but if you do the math, that $625 that I spent could've easily bought me 25 bitcoins at the time.

$625 ÷ $25 per Bitcoin = 25 Bitcoin

Now, if I held on — Hodl on, rather — to those coins, and sold it late December 2017, I would’ve had 500,000 USD by then. Since the price of bitcoin was $20,000 USD. As shown by the chart below.

$20,000 USD for a single bitcoin might sound ludicrous, but it doesn’t end there. Long time investors in bitcoin are fully aware that Bitcoin’s growth is exponential. If I were wise, I’d sell it at the top and accumulate more as the price went down. But by the off chance that I forgot or completely ignored the fact that it reached an all time high in 2017 given that I just held on to my coins, I would still be significantly richer by the time I finished writing this article, because now bitcoin has just reached $ 49,800 USD. Which is the current all time high.

Over A Million Dollars

If I held on to those coins, and sold them now, I would have been a millionaire. In fact, over a million dollars richer.

25 Bitcoins ✕ $ 50,000 USD per Bitcoin = $ 1,250,000 USD

Not bad for a $625 investment. But the hodl strategy, although reliable, isn’t as fool-proof at it seems. Many cryptocurrencies have died throughout the years, if you held on to them, you might have just thrown away your money. The only undisputed king, seems to be Bitcoin. Also, the Hodl strategy is incomplete because it doesn’t give in to account the action of selling or taking your gains. In retrospect, if I had 25 bitcoins in 2017, I should’ve sold them and bought more when it retraced to its lower levels. So, the more appropriate strategy would be to:

• Hodl
• Sell
• Buy low
• and Repeat

The price of bitcoin back in 2017, seems very overwhelming, but comparing it to today’s levels, and it might as well be an infant. It’s very unlikely that bitcoin will hold on to today’s price for very long, so I highly recommend waiting on a dip, before buying.

Bitcoin Follows a Pattern

Although bitcoin is very volatile due to the involvement of retail traders, big investors, and everyday people, the price action of Bitcoin has seemed to always follow the traditional market cycle. The most common “cheat sheet” used and shared endlessly by “coiners” is the Wall Street Cheat Sheet. It provides simplified visuals on the price action of market cycles and bitcoin is no exemption. Early adopters will know how to view bitcoin through logarithmic charts because they focus more on the percentages. There are other more in-depth and downright complicated ways to trade, like technical analysis and fundamental analysis to fully milk some money out of the large scale price actions, but these are hard to follow, and isn’t free of any flaws as well, that’s why it also needs a little bit of risk-management. Trading the markets is a skill, however, there exists super advanced trading bots or “algos” that can quickly react to drastic price changes and can detect multiple indicators at once. This is perhaps my biggest argument as to why I just prefer hodling. Humans cannot keep up with them. Learning to trade is good in itself, you can go that route, or you could just rely on the good ole cheat sheet. So study this chart very religiously, because it’s probably the only chart you’ll need.

Bitcoin Future Forecast

Bitcoin has already been declared dead hundreds of times, however, every single time it does, it goes up in value afterwards and exceeds its previous all-time-highs. Big name financial institutions as well as early adopters both agree that Bitcoin will reach $ 100,000 in the near future. JPMorgan says that it is possible for bitcoin to rally up to $100,000 USD. So look for those good entry points, and don’t get left out.

No Dates, No Worries

If social distancing and lockdowns from Coronavirus is keeping you from having any dates this Valentine’s, then you’re probably not alone. Take solace in the fact that many of us, including myself, just stayed home for Valentine’s. It’s okay that you didn’t have a fancy dinner. Just save that money. Buy some bitcoin, especially when it reaches the bottom cause it will eventually bounce back up to even greater heights. Invest only in the amount that you are willing to lose to save you from all the stress. Use this convenient break from dating as fuel for your future. It may have even saved you from Covid-19.

Happy Valentine’s to you, stay safe, stay healthy

and thanks for reading!