The famous writer Hunter S Thompson was renowned for his “gonzo” journalism, where he didn’t just report on an issue but immersed himself in the story.
It was never my intention to begin on this style of reporting on cryptocurrency, but by accident, I am the perfect case study of the highs and lows of this wild financial frontier.
Like millions of others, I’d spent years keeping an eye on the growth of crypto without ever actually dipping my toes in the water.
I was intrigued by the buzz and even more interested in some of the profits that were being made but also quite wary of the fact it seemed to be a sector for tech savants and shady shonks.
But last year, over a few beers with mates, I was convinced. They were all making very tidy returns and in the end I thought “if these run-of-the-mill blokes can master the world of cryptocurrency, why can’t I?”
The old-school investor in me though made sure I followed the golden rule of only ever investing as much as you’re willing to lose.
I popped a fairly insignificant amount of money in an account, asked my mates which coins I should be investing in, and sure as night follows day, my portfolio went up.
And up. And up!
Within a few months, I had more than doubled my cash and was all of a sudden kicking myself I’d been so cautious with my initial outlay.
More specifically, my wife and I were struggling to buy our first marital home at the time, and I was ruing the fact that if I’d put our deposit into crypto, just a few months later we would’ve been set for a lot nicer abode.
But what can you do?
I reconciled my situation, and thought I’d just let my crypto account sit there and keep doing its thing, and if it kept on at the current rate of growth, maybe a few years down the track it might be a deposit for another property .
Truth be told, after a few months I forgot I even had a cryptocurrency portfolio. That was until I got a message off one of my mates who first convinced me to invest.
It read “Holy shit… have you seen what’s happened to crypto?” followed by the brain exploding emoji.
Now given I’d only ever really known the good times for crypto, my first thought was a mix of greed and glee.
Maybe while I hadn’t been paying attention, the price of some of the obscure coins I’d dabbled in had soared.
I opened the app on my phone and up popped the chart of my portfolio.
Rather than soaring to the skies, it was falling through the floor.
I lost 85 percent in one day.
The corner my mates had talked up the most, the one I invested the most in, was called Luna. It’s now worthless.
It was so obscene I simply laughed. What else could I do?
Rather than being consumed by disappointment, instead I found myself thankful I’d been so cautious when I embarked on this crypto rollercoaster.
Unfortunately, several of my mates had been much more bullish.
They’d often message me saying “buy the dips” and would pour in thousands more dollars every time Luna’s price fell.
On paper, they were killing it.
They’d made many tens of thousands of dollars.
But the truth is their outlay was still tiny compared to many other everyday investors in Australia who thought they’d uncovered a get rich scheme that, for once, actually worked.
That was, until it didn’t.
So while I’m glad I dodged a bullet, I know plenty of others didn’t.
And that is the tragedy of this crypto crash – the number of latecomers, seduced by the hype and Hollywood endorsements, who piled in their savings and superannuation at the peak of the market, only now to be in a giant trough both financially and emotionally.
I feel immensely sorry for them, but suspect there is a fair bit of schadenfreude in other parts of the community.
Perhaps it’s a good reminder for everyone out there about that other financial golden rule: If it sounds too good to be true, it probably is.