2018 Cryptocurrency Update

Update means update

This will be yet another post where I did something stupid so you don’t have to 🙂

Towards the end of last year I started buying cryptocurrency. I’ve been making regular monthly purchases since.

​This is how that looks:
​

Ooops.

I was originally planning to continue this a bit longer, but decided to pull the plug today and sell for a total loss of 173,500 yen. Double ouch.

Basically the reason I decided to sell is because I don’t understand the ‘investment’, I don’t know what cryptocurrencies are worth or why, and I don’t like the environmental impact they have (requiring huge amounts of electricity for mining/proof).

Of course that was also true back in January when I wrote the first post.

I also want to simplify my holdings and spend less time on my portfolio every month. Getting rid of the cryptocurrencies removes a line from my monthly spreadsheet update, and means one less bank transfer each month.

I’m planning to put the 10,000 yen a month towards my mortgage from now on. Kind of boring, but I made my first overpayment on the mortgage last month and quite enjoyed seeing the numbers go down.

This is another lesson for me on my investing journey. Previous ones have included investing in a hedge fund (2 and 20!), picking hot stocks, buying deep value (garbage) stocks, and buying dividend growth stocks. I’m a slow learner. Presumably at the end of the day I will end up investing in two or three index funds, just like all the books and blogs recommend, after having wasted a bunch of time and money 🙂

How about you? Anyone staying on the cryptocurrency train?

22 Responses

  2. You have my sympathies on this; my own investing disasters are plentiful. The principle of not investing in something you don’t fully understand is a lesson many of us learn repeatedly. Not that I would encourage you to continue (I have no crypto currency investments and no interest in starting) my personal timeline for an investment is longer than the 12 months for your crypto-flirtation. A year is too short a timeline to judge whether an investment will be successful in my experience (although again I wouldn’t encourage anyone in crypto-currency).

  3. I am still investing. About 20,000 yen month. The market crashed yesterday and I made 20,000yen today on the rebound. (But for sure still down overall). Crypto is here to stay. Major investment firms in the USA are opening up crypto trading platforms. Blockchain is being adopted everywhere. Crypto has a loooooong way to go. No moon this decade, that’s for sure. But I feel confident its here to stay. That being said, mentally, this 20,000 a month 100% feels like I am just buying lottery tickets and honestly if crpyto moons and I got out now before the moon, I will be more mad at myself, than loosing yen I have put into crypto so far. If crypto goes back to December 2017 levels, I just made 500%+. Is there any sound economic theory in this? Absolutely not, just playing the lottery. Its a tiny amount, for now, I am still willing to risk, out of my total savings. I want to retire early.

  4. I am also paying down debt these days, and as you say it feels good.
    I have debt at 5%, so it makes no sense to invest too much in a overvalued stock market as long as I have this outstanding
    Unfortunately I also have some Crypto… bettter sell it all before it goes to zero I guess…

  5. Long term I think BTC has a chance but short and mid term and I’m not optimistic. ETH even less. I read a stat yesterday that “84% of cryptos have lost over 92% of their value this year”. Yikes.
    Usually I’m one of the mugs losing money on something like this but fortunately not this time. If it makes you feel any better though, I’ve lost well over 2 million yen on bad investments and trading. Not something to be proud of… but shit happens eh? It’s only money. Learn and move on. And please don’t beat yourself up if they suddenly take off from here without you. Been there done that and it’s immensely destructive.

    1. Ha, ha, indeed. One of my better qualities is that I tend not to regret things. Make a decision, move on for better or for worse.
      I’ve lost far more than that if you add in currency movements 🙂

  6. I’m sorry, I can no longer take your articles seriously. You have jumped the shark. Bitcoin halved its price within one month a year ago. The concept of mining, the electric footprint, the Twitter pump and dumps. Every month an exchange shuts down either because the owners ran off with everyone’s money or due to regulation. You, the author that investors take advice from, failed to research these public facts before investing. On the other hand, it’s likely your excursion into crypto was yet another pump and dump, considering how much influence you have. You say you lost money. Either you are lying or you are a fool when it comes to money.

    1. Influence? I’d love to have influence 😉
      I’ll cop to the fool thing. But in my defence the first article was pretty clear that this was a stupid thing to do with a tiny amount of money.
      A year later it turned out to be a stupid thing to do with a small amount of money 🙂

    2. I cannot go back right now and check the archives, but I seem to remember that RetireJapan said that he was making these investments to learn how they work and if they might be worth pursuing further as a larger part of his portfolio. As with any investing, caveat emptor.

  7. Thanks for being so honest and upfront. Takes a real man to own up to his mistakes/lessons in life. Good luck going forward. Now, what about buying a few kilos of gold!! Actually……

    1. Ha, ha. Yes, I’m thinking of buying a stake in an asteroid mining company next… 😉
      No doubt there will be more dumb decisions going forward, but 90% of our investments will stay in boring index funds for the long term.

  8. I’m sorry to hear you took a hit, but philosophically I’m glad as I don’t get crypto and was increasingly thinking there was something wrong with me. There may well be, but I’m glad I’m not the only one.

  9. Part of the fun of winning is remembering the experience of a previous loss.
    Good on you for trying and having the balls to admit your mistake. Most active investors will have a few speculative chances and you were completely upfront about what could happen.
    If we all just stuck with index funds, why would we look at any investing website?

    1. That is a great question. I am not sure of the answer yet.
      On the one hand I love the idea of dividend growth stocks, and living off rising dividends without touching the principal.
      On the other hand most people/books/articles say that a portfolio of index funds will be more tax-efficient and probably perform better over the long run. That is certainly true in my experience, my portfolio of selected dividends stocks has seriously lagged the indexes.
      So I’m not sure. I’ll continue to think about it for the next few decades 😉

  11. If you have already sold, well ok
    But like any investment, if you researched crypto, the different types of crypto, market cycles etc, you might feel differently. The industry being built around crypto is growing everyday. Not all crypto is mined, so not all has your energy concerns

    1. Thanks! I think blockchain will be an influential technology, but I don’t see many reasons the current coins will be valuable (especially at the present price points). I guess we’ll see though 🙂

  14. ” I made my first overpayment on the mortgage last month and quite enjoyed seeing the numbers go down.”
    I wanted to do this but the wife said we should do it after 10 years, because doing it now will mean less tax benefits because the amount of loan balance will affect tax deductible. Is she correct?

    1. Yes, currently for the first ten years of a mortgage most people (ours was not eligible as the building was too old) can claim 1% of the loan as a tax credit.
      If you want to pay down the mortgage and maximise the credit, you could save up the overpayments in a separate account then use them to massively pay down the mortgage once the ten years are up.