Dec 22nd 2017. The low point in my time as a crypto investor. It’s 5:30am and I’m rooting around in my desk drawers, reaching for my hardware wallet. This thing has given me many happy times, but this morning, I tear it from the box in a panic. Bitcoin is tanking. $15k. $14.5k. $14k. This is it. The bubble has burst. I’m out!
The only thing harder than watching your profits disintegrate is realising that your mental health is in a worse state than your Bitcoin-to-USD balance. This is my first day off work as the Christmas holidays arrive. I haven’t had time off for months, and yet the sleep I’ve been longing for has been broken by the bright light of my smart phone. I’ve been watching the price of Bitcoin all night, drifting in and out of dreams where I see numbers ticking up and down. And as my girlfriend wakes up to the sound of my Macbook starting, I know I’m in trouble.
“Pig, what are you doing?”, she calls out, in complete bemusement (that’s her pet name for me, by the way — neither of us know why). Just yesterday we had a long conversation about how crypto was taking over my life. Apparently, I haven’t been ‘present’ enough, and she’s tired of me staring at my phone constantly. Now I’m stood here in the early hours of the morning, wearing nothing but my boxer shorts, frantically punching in the pincode to my Ledger. “Nothing. I just need to send an e-mail to someone at work”, I reply, praying that she doesn’t come into the spare bedroom. A few minutes go past and there she is, standing in the doorway, staring at my Coinbase account. She shakes her head and walks off without saying anything.
Four hours later, I’ve finally cashed out (wow, Bitcoin is slow!). I’ve sold everything. I called the top of the market two weeks ago and I should have followed my instinct. But hey, a big chunk of profit is still intact. Unfortunately, though, my mental health clearly isn’t. It’s been days since I had some proper sleep, and truth be told, I’m really embarrassed that she found me panicking. After all, I’d spent months convincing her that Bitcoin was a solid investment and not, as she often calls it, ‘a complete gamble’. I’m pretty sure Warren Buffet doesn’t cower in front of a computer screen in the middle of the night.
Despite the shame, by 10am I’m feeling pretty smug. I got out at $13k, and now the price of one Bitcoin is at $11k. “Bitcoin has fractal growth patterns”, I explain to her, in an attempt to justify my panic. “It’s not that I don’t believe in it — Bitcoin will definitely change the world. But it grows in bubbles, and those bubbles pop. I’m going to take profits and buy more when it hits the bottom.” She pretends to be convinced by my logic, but I can tell she’s sceptical. She thinks I have a gambling problem and knows that this won’t be the end.
I jump in the shower, cheerfully singing a few lines from a cheesy Christmas song that was playing on the radio. What a relief. I got out before the market completely bombed, and I’m already dreaming about how many Bitcoins I can buy with my profits, once it goes back to $5k. I then start dreaming about how much those same Bitcoins could be worth at the tip of the next bubble. Boy, am I smart! I’m going to be a millionaire! And best of all, I’m free of stress while the price is in freefall. Now I can definitely enjoy Christmas without having to refresh Blockfolio every 10 minutes.
I’m getting dressed as we get ready to go and visit family. As usual, I’m complaining that she has spent at least 12 minutes in the bathroom this morning. “Come on, I hate being late!” I sit waiting on the stairs and my thumb is drawn to the Blockfolio logo on my phone. Let me see how much money these suckers have lost while they hope Bitcoin will bounce back. I open the app, but it’s not what I expected. Oh crap — it’s back up at $13k!
The next few days were supposed to be peaceful. A chance to spend time with family and friends, knowing that I’d made a 200% return in just a few months. By any stretch, that was a massive success. But instead, my mood was plummeting as quickly as Bitcoin was bouncing back. By lunchtime on Christmas Eve, it was over $16k and the FOMO was kicking in big time. Had I just made the biggest mistake of my life? I suddenly became convinced that Bitcoin would reach $100k in 2018, and I pictured myself watching the charts as prices ran away from me. Anxiety had its hands clasped firmly around my neck, and the rest of Christmas would be spent forcing a smile when Bitcoin was on the up, or feeling on top of the world as the price fell back.
The financial effects of such a volatile asset class are often talked about, and most people get into Bitcoin knowing what the risks are. I was made acutely aware of these having invested three days before the Chinese government was reported to be banning cryptocurrencies. My investment halved almost overnight, and it took every bit of strength in me to hold. But while people often tell you to ‘never invest more than you can afford to lose’, they rarely touch on the psychological impact of holding Bitcoin. I invested a sum that was significant, but losing it wouldn’t have fundamentally changed the course of my life. However, as that investment grows, it becomes a much, much bigger part of your life.
Crypto forums are filled with pictures of rockets and aspirations of owning a Lamborghini. People are making a lot of money, and most of us are young men, who are more comfortable with honey badger memes than discussions about our mental health (he’s the unofficial Bitcoin mascot, in case you’re wondering). Yet, having spoken openly about my experiences with a few friends, I know that I am definitely not the only one who has these concerns.
The title of the article may be a little dramatic. Fortunately, I haven’t been close to a full-on breakdown. But when your mood moves in tandem with the violent swings of a virtual currency, you have to pause and take stock. By sharing my own experiences, I simply hoped that it might stimulate some discussion. I’ve got no doubt that there are many who have had much worse experiences than me. People have taken out loans to invest, many will have closed trades having lost a huge part of their capital, and others may have lost everything in a hack or an elaborate scam.
My Christmas Bitcoin episode was just one example of where the balance between ‘real life’ and virtual assets became seriously distorted. In my next post, I’ll share more examples of how blockchain can mess with your head, and a few tips on how to stay sane while the market toys with your emotions.