Crypto’s bounce not enough to make this gamble pay off

Some cryptocurrencies have doubled in value in the past year, but this finance writer’s 2021 gamble is still 40 per cent in the red.

A cryptocurrency experiment I began two-and-a-half years ago may be about to pay off.

Equally likely, it may sink further into a money-losing abyss.

This is the nature of putting money into bitcoin, Ethereum and other cryptocurrencies.

Crypto, digital money that has boomed and busted several times in the past decade, is rising again, with big guns bitcoin and Ethereum both doubling in price in the past 12 months.

Crypto was among the world’s hottest investments, if you are OK calling it that, in 2020 and 2021.

That was before the dark times. Before the crypto winter.

As blue skies apparently appear again for crypto lovers, I’ve revisited the small portfolio of eight digital currencies I bought in April 2021 as an experiment in fear and greed. Crypto is effectively created from thin air, even though true believers say it is the future of money.

In an experiment in fear and greed, fear is still winning. Picture Simon Cross

Greed pushed it to astronomical heights, and I injected $3500 to familiarise myself with it and see if the craziness could continue a little longer. I’d planned to double my money, then sell half to recover my initial outlay, and ride the remainder like a roller coaster.

It didn’t double. Bitcoin quickly sank more than 70 per cent before its recent revival, and several of the smaller digital currencies I bought – after a reader said “put $100 on each and thank me later” – are still down about 90 per cent.

My $3500 crypto investment is now worth $2100, and I feel for those who initially made tens or hundreds of thousands of dollars from crypto bets then lost most of it.

Does anyone remember Dogecoin? It was heavily promoted by billionaire Elon Musk before he changed his mind and called it a hustle. My initial $1000 of Dogecoin is now worth $242, my $1000 in bitcoin is $770, and surprisingly my $1000 of Ethereum is now $1040.

I’m still getting many emails about crypto, some saying it remains the future of currency, others treating it like a traditional investment – which it’s not.

But I won’t be selling. In the past, crypto winters have been followed by crypto booms, and I don’t want to miss out on the party, because the financial world loves a little craziness.

Originally published as Crypto’s bounce not enough to make this gamble pay off