The Crypto Skeptic Scores Big

The first lesson: Money begets arrogance, and arrogance leads to a fall.

You remember me — I’m the guy who thinks that cryptocurrency is glorified financial scam, and yet spent over two years in the market as part of an exercise in endurance. I was trying to learn how to lose money with grace, and instead I ended up making some.

That was about six weeks ago — what’s happened since?

Once fortune turned in my favor, I had a plan as to what to do with that crypto account. You see, a certain payment processor (I won’t name names, but they rhyme with “Gray Gal” and they have one star on the BBB) stole some money from me and are refusing to return it. It’s not a lot, but it’s mine — I earned it by selling science fiction, and believe me, that is not an easy way to make a buck.

So the plan was to stay in the market until I’d made enough money to replace what was taken from me. The idea was to follow a pretty conservative strategy, leaving the money in Etherium with an occasional jump into a smaller coin when the price dipped low enough.

Yesterday, though, an opportunity presented itself. Several new coins landed on Coinbase, and that is tempting. Playing those new coins has made me money before, so I picked one and bought in.

And when I checked this morning, I…oh dear.

This was the result of buying in to Alchemy Pay (ACH). I bought at $0.03, it peaked at $0.09 about twelve hours later, and I jumped out at $0.075 for a 150% gain. That’s unquestionably big — prior to this, my biggest overnight gain was maybe 50%. And, a late addition: ACH went up again after this, so I had the potential to make even more if I just let it ride.

Doubling your money in hours is the kind of return that crypto prophets use to entice people into buying dodgy products and services, but it’s worth remember the amount of luck that goes into a gain like this. I benefited twice from serendipity:

• First, I bought in on a low-cap coin within hours of its appearance on Coinbase, before the whales bought in — all but guaranteeing a profit.
• Second, I sold those coins before all of the whales had gotten out so that the price was still very favorable.

That’s just not the kind of thing you can rely on. In any speculative market there’s always a chance that one can double, triple, quadruple his money in short order, but there’s no reliable way to predict when that’s going to happen. Going for the big score means taking a lot of big risks, and anyone telling you otherwise is trying to find easy money in your wallet.

A big score can also become a terrible curse if it makes one arrogant. Look at a chart like that and it’s easy to think that you have the magic touch, leading you to take bigger risks as you seek out that same outcome. The financial history books are full of people who chased big money with ever bigger losses. The lucky ones still get out with a profit, albeit one that’s lower than they would have enjoyed if they’d played it smart. The unlucky ones lose it all.

As for me? I’ve successfully replaced the money that the ol’ Gray Gal took from me. In fact, I have enough in that account now that I actually care what happens to it. So will I keep winning, or is a fall on its way? I guess we’ll find out together.