Losing money during the Terra Luna cryptocurrency crash
Cryptocurrency was hyped up to be the new express pass to riches this decade. All you saw online were the success stories of those who traded and got rich through crypto. I was serving my National Service at the time, and the stories I read piqued my curiosity. You mean, I could go from earning $650+/month to suddenly having thousands of dollars?
The number one rule in investing is always DYOR (Do Your Own Research). I did my research and decided to invest heavily into Bitcoin (BTC) and Ethereum (ETH). Of course, I also bought meme currencies like Doge and Shiba just for the heck of it.
At 20 years old, I had an impressive portfolio with massive gains and I never cashed out any of it. All I did with my profits was to reinvest, which was the smart thing to do at that time and my returns were flying off the chart.
In a more conservative society, cryptocurrency was the biggest danger out there. Many people did not understand it. So when they invest in cryptocurrency, they tend to get scared and dump everything once FUD (fear, uncertainty and doubt) starts. Which ends up in them accruing a loss.
I laughed at people being oblivious and just taking losses like that. You see, when enough people go through a FUD phase, the currencies will drop in value due to the large sell-off. This allows investors with strong convictions to buy in at a “cheaper price” to get higher returns.
I had more profit in three months than I would have had in two years of NS. Eventually, I decided to take a step back and liquidated a large amount of my assets to put it into a stablecoin—a cryptocurrency tied to another currency, commodity, or financial instrument. This would have been a good long term investment as it allowed me to not worry about volatility. Think of it as investing in a large successful blue chip company.
Here’s where I f**ked up. I invested 75% of my portfolio into Terra Luna. At the time, it seemed like the smartest thing to do for building my wealth.
Until it crashed to almost nothing. I basically watched my portfolio of $17K depreciate to the price of a single Daiso product.
What losing $17K felt like
When news of the crash first hit me, it felt surreal. I had to make sure I wasn’t dreaming. To watch a large sum of my money disappear in an instant was heartbreaking.
I started questioning myself.
“Did I fail to do enough research?”
“Was everyone else right about crypto being a gamble?”
I never told anyone about my crypto profits and losses, so this was a struggle I had to deal with myself. That being said, things could have been worse for me. Scrolling through Twitter, I read stories about how some people’s lives were destroyed because of the crash. Some people lost millions.
Overnight, the cryptocurrency industry experienced a loss that cost beyond $1 trillion. A loss that’s still felt half a year later. Was this the end for me?
It was merely the beginning. As a self-taught “experienced” trader, I knew how to take losses. I took losses in the beginning and they taught me how to be a better trader. This particular loss may have been on a larger scale but it gave me even more conviction and confidence in other coins.
You may think I’m stupid, but I ventured even further. I started dabbling in other cryptocurrencies and NFTs. Since everything crashed, this meant only one thing—the barrier to entry for crypto is even lower now. I decided to take this as a learning experience and saw things in a more positive light. After all, I could buy my entries at a lower cost.
Lessons from the cryptocurrency crash
DYOR. Always make sure you research what you’re intending to invest in. Don’t blindly follow every other influencer out there. In the long run, you’re on your own and you’re taking the Ls by yourself.
If you’re new into the cryptocurrency market, keep in mind just how volatile it is. Regular tell-tale signs of bullish or bearish seasons that you’d see in regular stock markets may not apply here. Invest carefully.
Since the incident, I’ve stuck to keeping the majority of my portfolio in markets that I believe will have longevity.
For you crypto-bros and crypto-sisters out there, if you’re looking for a time to get into cryptocurrency, do your diligent research and make your own decisions. This market waits for nobody.
Making the most out of crypto
All things considered, I’ve learnt many things from my profits and losses. I still have a strong belief in the cryptocurrency system and that has yet to waver. If you’re attracted by the success stories you’ve seen online, read my story again.
Do not invest in crypto blindly or stupidly. Do your own research and do it for YOU. It will take some work and you will stumble along the way. DO NOT think that cryptocurrency or NFTs are your golden ticket to riches. I’m HODL-ing because I believe it’s the future.