Like most, at first – you don’t understand anything. Neither what bitcoin is, nor what programmable money means. They suggest sending euros to a platform with a strange name, buying digital gold, because tomorrow it will cost twice as much, and the day after tomorrow five times more. It will soon become mainstream (everyone will want to buy, the price will rise). And you will be late.
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2017. In Zimbabwe, it is impossible to trust banks, crypto is the solution. In Argentina, hyperinflation devours the standard currency, crypto is the solution. Here? Your daughter doesn’t have a strange disease requiring surgery in America, you didn’t plan to participate in a post-apocalyptic reality show for a large sum of money. You don’t even have a daughter. You don’t need crypto.
But the hook is set. Offers to get rich quickly and easily don’t fade away. Just like men during the gold rush traveled not out of necessity. Opportunists. They had money (needed for travel and equipment), but wanted to have even more + sought adventure.
Because boredom is a serious disease, and money is a powerful medicine. How long can you watch jokes on Instagram? Read another manifesto on Facebook? There’s little adrenaline in that, no risk.
With the advent of stock investing apps, phone in hand & staring at the screen takes on new colors. And motives. You’re not here just for fun, you’re here to make money. After a trade, the Robinhood app shoots confetti across your screen (thanks for the congratulations), and the internet calls you a retail investor. Nice.
Although it’s almost an insulting term. Understand it as a store-bought investor, low-level, who only got access to Apple stocks thanks to technology. Previously, this was only possible for men in suits on Wall Street, and now you, in sweatpants / watching Žalgiris / casually buying shares of the world’s largest company!
Only the stock market moves slowly, and advice is dominated by one strategy: buy and forget for 10 years. What to do during those 10 years? Who can wait that long? That’s how offers to send euros to a platform with a strange name, to buy digital gold, appear. Then you won’t have to wait – tomorrow it will cost twice as much, and the day after tomorrow five times more.
It’s not just an offer to get rich. It’s an invitation to adventure, a ticket to another world, an escape from nine-to-five slavery. It’s not a promise of a better life. It’s a promise of a different life. Is it possible not to think about it on the way to work, standing in a packed bus at 8:35?
You start typically. You open an account at a famous crypto exchange. They lure you by saying everything is free.
The first transaction – 2 euros! You need to check if the money from the bank really reaches the exchange, if euros turn into bitcoin when buying. Only then do you invest all 20. A commendable caution! Strange how a person who worries about two euros soon stops worrying about a few hundred and acts carelessly with thousands (about this – in another part of the series).
Bitcoin’s price rises. 20 soon becomes 22. You immediately calculate: if you had invested 200, it would be plus twenty, and if 2000 – plus two hundred, and if 20 thousand (which you don’t have) – two thousand, and so on. You just trembled over 2 euros, and now you’re spinning in the four-zero zone in your mind.
Startup culture has created a new type of millionaire – they swapped suits for hoodies, polished shoes for sneakers. On Instagram, from five in the morning, they ride bikes, drinking smoothies grinding for a million. Crypto gives birth to another generation of millionaires – in shorts and slippers. They chill in Bali and generate six-figure profits with a few clicks. You could (for now) generate on the couch too.
Bitcoin’s price rises.
Tyler Winklevoss (one of Facebook’s founders) tweets that bitcoin never sleeps. One of the largest bitcoin holders Michael Saylor: bitcoin never takes a vacation. They appeal to NASDAQ and other stock exchanges. They have working hours, but crypto trading happens 24/7. But for you (like other crypto newbies) this means something else: you can’t stop looking at the price.
Too often you suddenly grab your phone as if it’s ringing (it’s not). With traces of shame / panic on your face. Your behavior changes – you become irritable, impatient, walking on pins and needles. No one knows what you’re thinking, so they imagine the strangest things. But it’s simpler – you’re just thinking about money.
Twitter understands you, memes comfort you.
There are many ways to explain why you need crypto. You can talk about true democracy and money that no state sees (if it doesn’t see it – it won’t tax it); about a new financial system – where money transactions are made without intermediaries (without cursed banks); about the new internet (web3), based on decentralized blockchain technology, where users control their own data (not Google, Meta).
But the best argument: the p&l (profit/loss) line. You already have plus five hundred. Checkmate, if anything.
Checking the chart and additional purchases create the impression that the result depends not on circumstances, but on your actions. In a rising market, almost any decision (buy, hold, invest more) yields a positive result. Not because the decision is good, but because the whole market water level is rising. Classic, called false causal attribution. You think you’re a genius, but it’s just a market trend.
And as they say in the crypto world – in a bull market (when prices steadily rise) – you don’t need brains. You need balls. You need balls to buy a lot.
The price rises.
The internet is convinced – this is just the beginning. John McAfee (eccentric tech millionaire and antivirus creator, later becoming an equally eccentric crypto figure), in 2017 projects that bitcoin’s price will reach 500 thousand in three years. If not – he promises to eat his penis on TV cameras.
You regret not buying more. You buy a little more.
Twitter reminds you of Greg Schoen. Once pushing bitcoin for cents. Every time you see this tweet, you calculate how much it would be worth now. It would be worth a lot. You don’t sell.
At a BitConnect event, a man in a bad suit and shiny head (Carlos Matos) enthusiastically intones wasa wasa wasa wasa (meaning what’s up, later becoming a meme). He says: “Let me tell you guys, I started 137 days ago with just $25,610. And now I already have $140,000!”
The hall is full listening to him.
The price rises. Enthusiasm and self-confidence rise.
Strong / creative social media communities engage with funny, timely, accurate observations. They don’t know your name, haven’t seen you in person, but understand how you feel.
With bitcoin, you enter a kind of club and gain the right to look down on the backward masses – poor things, they don’t have bitcoin. It’s funny. Maybe silly. But for you – it’s true. And only those who have bitcoin can understand. That’s how tribes and movements are born.
But having bitcoin is not easy. The price moves in amplitudes. When it falls – the desire to sell rises. The up and down movement causes spasms, an internal struggle between faith and fear. But the already formed crypto culture helps to hold on / resist.
When the price falls, protocols activate like with anonymous users. For example, HODL.
HODL (a misspelling of hold – to keep, i.e., not to sell) appeared back in 2013 on a forum when a drunk (!) user wrote “I AM HODLING” and explained why he wouldn’t sell bitcoin. But it gained mass use only after four years.
Twitter hodls. It adopts and adapts pop culture elements – the “Game of Thrones” hero Holdor becomes one of the symbols of hodling. + Modern folk wisdom – when in doubt zoom out (when in doubt – step back). Understand – from a further perspective, everything rises, this is a temporary dip. We’re moving, generally, upwards.
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Just hanging on. Surviving.
Greater anxiety is caused by calm. When the price stops moving sharply. Then something similar to scenes from Hitchcock films is felt throughout the crypto world. Silent tension for no apparent reason.
As if you left your phone at home and have to wait for the elevator staring at the door. Horror! Bitcoin’s price moves about 10 percent in a week, looking at the chart causes apathy. It feels like forced withdrawal. There’s nothing to do, no reason to check. The compulsive action remains, but the desired result – does not.
Crypto offers you the same as a slot machine offers a casino visitor – a scenario based on variable rewards (unpredictable wins, unlike, for example, roulette). The chart will always provide surprises. The greater the amplitude – the more you want to check. The less predictable the result – the harder it is to control yourself.
When the price dozes in the plains, you don’t get dopamine bursts. But the need remains. You start unplanned actions – trading on top. In small amounts. Roughly – here’s a new account, what’s already bought stays, and here – a separate short-term game (talking to yourself). An additional need to check new trades appears. If there’s no reason – a reason can be created.
But you should create a plan, write down – under what circumstances and price you will sell your bitcoin. Then you would just have to stick to the agreement with yourself, and when trials come, you wouldn’t have to make a decision on the spot. But creating strategies is too complicated a task.
The price movement chart is your cardiogram. Yes – through dips, rises, and calm you survive until mid-December. You read about bitcoin with a smile, which, it seems, is already being discussed by Vilnius taxi drivers. You’ve had it for a long time, and they’re just discovering it now.
On December 17, 2017, the currency reaches a cosmic price for that year – almost 20 thousand per unit. A psychosis grips the crypto world. It seems the party will never end. After all, the price on December 1 was almost half as much. Opa opa opa.
John McAfee (who promised to eat his penis if BTC didn’t reach 500k) raises the bet to a million. Others draw technical analyses, sketch and talk about hyperwave, try to warn, but are called unbelievers, haters. The plan – hodl.
Tuk tuk, good evening.
On December 22, just five days after bitcoin’s ATH (all-time-high, highest price). In less than 24 hours, the price drops about 45% (from almost 20 thousand dollars to about 10.7 thousand). You don’t know what to do. You’re still in profit, but almost half of the money that seemed to be in your pocket has vanished.
You deny. It’s temporary, HODL, manipulations are happening (big players sell, push the price down and buy more). The club offers not to give up. Another protocol activates: Buy the dip. A bad situation is an opportunity, not a signal to exit. Buy the dip is not just words. Repeated constantly, they become a body – a crypto world tradition, proof of persistence and courage.
In a way, the famous Warren Buffett agrees with the buy the dip fashion. He says: “Be brave when others panic – panic when others are brave”; but you can’t bring yourself to buy. Now you need balls to buy! But you don’t have them.
You act the opposite. Fear motivates. You sell half to preserve some profit. You immediately realize – there will be no pleasant way out. If it rises, you’ll cry that you sold half in panic, you could have waited; if it falls, you’ll cry that you didn’t sell everything at 11 thousand price.
On January 6, the price rebounds to 17 thousand euros. Buffett was right, you should have bought! On January 16 – again 10 thousand. If Buffett was right – you should buy again. But.
In mid-January, bitcoin falls below the psychologically very important – 10 thousand dollars per unit – amount. Only later will you learn that this drop was caused by CoinMarketCap’s (the world’s most popular cryptocurrency data platform) decision to remove South Korean exchanges from its calculation algorithms (prices there were much higher due to huge local demand). Because of this reversal, prices worldwide instantly dropped. This caused panic, algorithms started massively selling bitcoin. Then you followed the algorithms, losing almost all unrealized profit. In one day, the market lost hundreds of billions of dollars in value.
Anger starts. You blame influencers (tweeting on McAfee’s wall asking about his penis taste). You blame the government, whales (big crypto traders). But you can’t blame chaos and random events, you’re pointing fingers at the air. McAfee doesn’t answer.
And bitcoin has no feelings. It falls. You start new negotiations with yourself – strategizing attempts to regain control. You plan: if the price returns to 15 thousand, you’ll sell; you need to buy more to lower the average purchase price. But you can’t stop the river’s flow.
Early February – even harder. At one point, the price falls below 6 thousand. Later it rebounds to 11. You think that pre-Buffetters will get through this time. But at the end of the month, Google and Facebook decide to ban cryptocurrency ads, the price falls again to 7 thousand. The path to mainstream closes, the crypto galaxy enters winter, and you – crypto depression.
No longer interesting. Nothing to tweet. Even memes – not so funny. Price movements cause disgust. By the end of the year, BTC slides to a miserable 3.2 thousand. The party is over. If during euphoria you had bought bitcoin for 1 thousand, by mid-December only 160 would remain. So – 85% loss.
It has been noticed that in the crypto world (also in gambling) loss aversion prevails. The pain of loss is 2.25 times stronger than the joy of the same profit. Not only money disappears – routine, dopamine bursts, triggers disappear. There are no actions that must be performed.
Only one way out remains – to accept. Selling at a loss is not worth it, it would bring endless feelings of failure. That you are a loser would become official. The real HODL begins.
You feel even dumber when you read that the claim of centralized exchanges that trading is free is just another marketing trick. Exchanges simply sell assets for more than they are worth. And when selling – buy for less than they are worth. The so-called spread.
There is a saying – if you don’t know how they make money, it means they make money from you.
The stock trading app Robinhood removes confetti before its own public stock offering (IPO). It was accused of encouraging irresponsible investing, turning financial instrument purchases into impulsive, overly emotional actions. Game over.
The game is just beginning. You discover the decentralized crypto market. That is, the real crypto market.
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To be continued.
The author of this text received a scholarship from the Media Support Fund.
