My Bitcoin Experience

By Sean Glendon

I impulsively invested in Bitcoin on a Monday night. Bitcoin, as in the plural for Bitcoin. Two full Bitcoin. I was officially a money nerd or maybe an idiot. Only time would tell. Let us backtrack a little bit though, because the word “impulsively” might be a bit misleading. A few months back, I decided that Bitcoin was a cool thing to invest in. Maybe. When the price was right, I downloaded Coinbase, an international digital wallet used for transactions of Bitcoin. The price was about $580 per coin, and I was ready to buy away, but then tragedy struck. I needed to connect my bank account, which would require verification through correctly inputting the total of a few small deposits Coinbase made into my account. This process would take a few days, and by the time I was ready to go, the price was no longer in my range. I spent the next few weeks contemplating a strategy, and debating inputting a second payment method (a credit card), to allow for instant transactions. I didn’t. I might one day. On February 7th, I tweeted “If Bitcoin dives again, I’m investing. I’ve had a wallet set up just waiting. Tank BTC, tank” and I meant it. On Monday, February 24th at around 10:45 pm I pulled the trigger. Mt. Gox, a Japanese bitcoin exchange, had suspended trading. Boom. Crash. Just what I was looking for. After a 1% fee charged by Coinbase, and a 15 cent fee charged by M&T bank, I was out $865. On the bright side, I had 2 full units of extremely volatile virtual currency in its place. That entire night, I was constantly updating Coinbase to see the value of my new intangible valuable items. I actually did not have them in my wallet yet, and wouldn’t for a few days, because everything had to clear. That meant that I couldn’t sell them even if I wanted to that night. An hour later, I was up over $100 dollars from where I started. Things were looking very, very good. By March 3rd, I was up over $500 dollars, and that’s when I should’ve pulled out. But I didn’t. I got greedy, and can you blame me? In December, each coin was trading well over $1,000. So I rode it out, and growth stagnated. And then it began to drop again. And I held out. It would obviously begin increasing again… right? Wrong, at least as of now. When the downward spiral continued slowly, I eventually had to let go. On March 28th, I said goodbye to my virtual friends, bidding farewell in exchange for 989 real dollars. That’s a $124 return, or 14.33% of my initial $865 investment, in a little bit over a month. Had I sold at the peak of my possession, I could have had made well over 50% of my initial investment. As of April 2nd, the market price for Bitcoin was lower than my payment price was. Throughout this adventure, I learned a lot about Bitcoin. After this experience, do I believe that Bitcoin has potential as a virtual currency? Maybe, but not in its current state. The market will need to stabilize before it becomes a legitimate option. Do I believe Bitcoin has potential as an investment tool? Absolutely. The main aspect holding Bitcoin back from being a successful virtual currency is what makes it perfect for investments: its volatility. In a short period of time, Bitcoin offers higher returns than other options. I’ll be keeping my eyes on Bitcoin, and ready to throw money in it again, because it offered one hell of a ride.