The following article is the first guest blog about what Cryptocurrency taught an investor about speculative investing. I have long said that speculating and investing are two different things, and the experiences of the author below (Cole) add to that.
After starting a new digital marketing job at a tech company, I began to learn about cryptocurrency. Cryptocurrency and blockchain technology were a part of the company culture from top to bottom — enough so that people could even opt to receive a portion of their salary as cryptocurrency.
New to investing, I decided to jump on the bandwagon and dump all of my spare savings into crypto at the end of each paycheck. This was around April 2017, when the price of cryptocurrencies began to skyrocket.
I made some amazing short term gains, some days gaining over a 30% return on my investment. But with every massive gain comes a massive correction, and I quickly lost a massive amount of my investments when the crypto bubble finally popped in January 2018.
While I came away with a good short term return on my investments, even after the crash, I learned a lot about investing. Cryptocurrency wasn’t really an investment. It was a gamble. Investing in speculation isn’t much more than gambling, and in the long term it’s usually a bad investment.
This is why after all of the crypto chaos settled down, I decided to stick to index funds. There’s not a lot of exciting highs, but at the same time there’s no crushing lows. At the end of the day, I can reliably see my portfolio grow as compounding interest runs its course.
Founder of YoungSuccess Books
Having a passion for sharing information that’s been helpful in finding success in life, Cole founded YoungSuccess Books, an independent publishing brand dedicated to teaching people how to be successful.
He recently launched his first book, One Month MBA, where he talks about how he was able to get a regionally accredited MBA in just a few months while working a full time job, and spent less than $4,000 in the process.