What it is like to trade cryptocurrency

Published in El Pais, 24 February 2021.

Those who have read my articles regularly know that I have been a big advocate of cryptocurrency and blockchain technology. The past three years I have been trading crypto on the side and recently I have found a lot of success. It has been quite the learning experience from my first $100 investment to a recent trade I made last month where I invested $750 on one coin which is now worth roughly $54,000. Investing in cryptocurrency is new but many would assume it is similar to tradition investments but there are many differences, some for the better some for the worst. Below are some of my experiences as a crypto trader.

1. 24 Hour Trading. The 10-4 clock meant for traditional stocks does not exist in the crypto world. Since cryptocurrency is bought and sold on the blockchain, trading is done nonstop. You want to buy Bitcoin at 3 in the morning? Go ahead. While many see this as a pro at times it can add stress to the process. There is nothing like waking up to find out your net worth dropped several thousand dollars while you sleep. Want to enjoy your weekend? If your crypto portfolio is being volatile it can cause your eyes being glued to your phone while you watch the ticker.  While certainly convenient. Sometimes it can be hard to catch a break.
2. Handling Money. This is similar to traditional investments. At first you start with a small amount and you panic after your $100 investment is worth $98 2 hours later, but as you become more experienced you invest larger amounts and keep the faith in your process. Of course, as the amount gets larger you must get used to the new amount. To be honest I find myself in new territory and I am still getting used to it, but just like I got used to trading a few hundred dollars I have faith I will get used to this new amount as well.
3. Price Watching. Buy low, sell high. A simple strategy but unfortunately easier said than done. Of course, when making investments we would like to buy it super cheap. At first, I would be caught price watching hoping the price would go down before investing. This unfortunately has burned me and now live by a fairly simple philosophy. Do you think the coin is worth more than it is now? If yes than it’s a good time to buy. Many times, I have purchased coins that drop significantly after purchasing, only to rebound and be worth several times what I purchased them at.
4. Volatility. Cryptocurrency is far more volatile than traditional investments, which means that although there is a potential for quick profits, there is a potential for quick losses. To give you an example of the volatility my net worth went up $5,000 since I started writing this article but who knows, by the time you read this it may be way down.

As you might be able to tell this job might not be for everyone. If you do decide to dip your toes, never go all-in and always be prepared to lose what you invest. That being said I do believe crypto investing will become more mainstream and you will be able to trade through brokers like you would normally stocks that will let you have someone more experienced than yourself worry about it.