Cryptoassets, Investing

My Cryptocurrency Experiment Update

Let’s start out with the obvious, this is in no way any sort of recommendation to buy/sell/hold any cryptocurrency.

Since I’ve been sharing my exploration into the world of cryptocurrency, I feel I should provide general updates whenever making a major change to my holdings. I doubt and sincerely hope no one is making investment decisions based on my blog–the whole reason for my research and writing is to provide information and resources for those inclined to learn more. I believe in transparency which is why I’ve shared where I’ve bought my cryptocurrencies, which I’ve owned and other general details.

Last night (Tuesday) I decided to sell a little of each of the cryptocurrencies in my small portfolio. I didn’t go into this experiment with the intent on trading, but after my portfolio of cryptocurrency went up 235% in six months I began to consider taking my initial investment out and seeing Litecoin go nuts led me to take action.  So, I sold some Bitcoin, Ether and Litecoin to cash in my initial investment…the rest, I’ll hodl (if you’re new to cryptocurrency, that’s not a typo). I’m going to hold my initial investment in cash and may look to reinvest it if an opporunity presents itself, which I’ll disclose if it happens.

In addition to providing an update, I thought I’d highlight a couple of lessons learned while moving my cryptocurrency back to Coinbase, selling and moving the cash to my bank.

  • It’s not a quick process. Despite being digital, cryptocurrencies still takes some time to move, especially if its taken offline. In addition to the time it takes to move the crypto back to Coinbase from offline storage, the actual selling can take up to 6 cycles before it is verified and complete. It took Bitcoin about 15 minutes to show up in my Coinbase wallet, while the Ether and Litecoin arrived in about a minute. It then took about 45 minutes before all of three were out of a pending status and officially sold; it’ll be another three days before the cash in back in my bank account.
  • An often overlooked component is the expense of working through the brokerages; the expense is not the same for each cryptocurrency, which is a positive for some and drawback of others. For example, to move my Bitcoin from my offline wallet back to Coinbase, it cost me $42. To move a similar amount of Litecoin, it cost me next to nothing. I then had to pay $15 to sell my Bitcoin and $14 to sell my Litecoin and another $10 to sell my Ether. Just like with investing in funds, the expenses associated with owning cryptocurrency should be taken into consideration because they eat into the return, and for smaller investors can really have a negative impact.

Cryptocurrency is complex in itself and owning/managing it only adds to the complexity–further reason to delay your investment until fully understanding the asset class.

I’ll continue to share what I learn through this ongoing experiment.


Disclaimer: Nothing on this blog should be considered advice, or recommendations. If you have questions pertaining your individual situation you should consult your financial advisor. For all of the disclaimers, please see my disclaimer page.