Bitcoin, NFT’s, Blockchain. For the wider population, these terms have become synonymous with making money. We’ve all heard the stories: “My friend’s cousin made a million dollars and bought a house”, “That guy retired from the money he made off Bitcoin”, “I’ve made $1000 in the last week”.
Whether or not the rumours are true, the idea of investing in cryptocurrencies has become a fairly common pipeline dream.
An easy way to make a fortune.
A road to early retirement.
The White Paper, published by an anonymous entity using the pseudonym Satoshi Nakomoto, introduced the concept of Blockchain back in 2008. The document described the need for a peer-to-peer payment system that was unregulated by financial institutions, and instead self-contained.
That description has been tested over the last decade. In the last five years, and with crypto’s growing popularity, the market has seen multiple “bull runs” – a period where the price is generally rising. It has also seen its fair share of crashes, as well as the creation of alt-coins, NFT’s, and the adoption of crypto as national currencies.
VICE spoke to four young people in their 20s who have invested in cryptocurrency and one person in their 30s who now does it full-time.
The goal? To figure out why anyone would battle the volatile crypto markets to try and make a fortune.
John, Construction, 23-years-old: “You should look at it like it’s gone forever, because then you can’t be disappointed.”
So what’s the story with you and crypto?
I bought crypto in really small amounts here and there, but I’ve always been too broke to make it an actual investment. I guess the main incentive was A: FOMO and B: I just don’t like being broke.
With traditional cryptocurrency like Bitcoin, that ship has sailed. Recently, a friend told me about a new, different type of crypto.
How much money do you think you’ve invested?
I put $1500 in a couple of weeks ago and I’m up to $2400 today. It’s been a massive day today.
So you’ve just invested in this one coin, would you say that the smaller coins are better?
Yes, 100 percent. Because with Bitcoin there’s no purpose. There never has been. Whereas new coins and smaller coins and alt-coins that come up everyday… some of them flop but some of them have really solid terms. Just really solid reasons for them existing.
Even with the smaller coins having a purpose, do you ever worry about the volatile nature of the market and losing money?
All the time. But I’ve just come up with a rule: I used to go to the casino and I never had that much money to spend, but I’d get $100 and I would hold it and look at it and say, “This is not my money anymore, it is gone, it’s no longer mine”.
It’s the casino’s money and if I walk out of there with $200 then that’s great, I’ve gotten lucky.
That’s how I try and look at the money in crypto. Some people put their rent money into crypto and then withdraw it back out again like it’s their savings account. That’s not the way you should look at it. You should look at it like it’s gone forever, because then you can’t be disappointed.
Do you think cryptos will replace fiat money?
I think yes, in some form or another. I don’t think we’ll be walking around with Bitcoin cards on our phone or anything, but I think there’s stuff that’s already on the way.
Lucas, Mortgage Broker, 25-years-old: “I essentially lost $90,000 in a couple of weeks.”
What motivated you to get into crypto in the first place?
I started in 2017 and it was because I wanted to look into investing. I had some money lying around, and people were making money off of it that were around me, so I followed suit. I heard people were making 1000 percent profit. People would invest $1000 and they’d come out with $10,000.
Did you just go Bitcoin or did you invest in a few coins?
When I first started, in 2017, Bitcoin was worth $4000 a coin and I thought that was overvalued, so I invested in alt-coins. Obviously, Bitcoin is now worth $80,000. So I’d go back and change that. I think I had 30 different coins at one point.
How much did you put in?
I put in, like, $35,000 to $40,000 over three years, and I pulled out $150,000.
Holy shit. Did you withdraw all of that or are you still sitting on it?
I sold it in February of this year. If I’d held onto it and hadn’t sold I’d probably have $300,000, because since February it’s at least doubled if not more.
I try not to look at that, but I’ve sold it all and pulled it out into solid cash.
Why did you decide to pull it out in February?
In 2017 it went up and up and up, and then it all crashed. It lost like 90% in a day. So when I was 20-years-old I had $100,000 worth of crypto and then in a couple of weeks it was worth $10,000. I essentially lost $90,000 in a couple of weeks.
The next time, I set myself a goal when it was going up again, and then when it hit $150,000 I was like: “That’s my pull-out goal”. So I sold it.
What have you spent that $150,000 on?
I have bought one house and I have a contract for a second house. Pretty good for a 25-year-old. One’s an investment property and the other’s an occupied house.
Is there any place that you get crypto tips from?
Reddit, but they’re not very good.
So now you’ve got investment properties, but if you had to choose one or the other, is there one you’d prefer investing in?
Crypto is more risk over reward, right? You have the chance to make more but investment properties are just solid investment. It comes down to my risk appetite. I think I’d just do both.
There’s a chance to make a lot more money in crypto – but there’s also a chance to lose a lot of money. I’ve learned both ways. I’ve lost money and I’ve made money. It’s risk over reward, and it depends what you want to risk at the time.
If I had a kid or something I think I’d probably stay away from crypto – but when I’m at a young age and willing to risk that kind of stuff then it’s something that I’m more likely to do.
So you think you’ll continue trading crypto as you get older?
It depends if it gets more regulated, because right now it’s in its very early stages. It’s so volatile. I imagine one day it’ll become less volatile with less huge gains and less huge losses. It won’t swing as far either way – and if that happens then I’ll continue investing when I’m older.
Dylan, Paralegal, 27-years-old : “I lost access to one of my wallets. It would probably be in the scope of $50,000-$60,000 by now.”
So why cryptocurrency? Why a market that’s so chaotic?
Well, I sold all of my coins about a year ago, but I got into it in 2013. I had Bitcoin because I wanted to buy stuff off the dark web and I had a few wallets floating around, and then literally forgot about it until six years later when the first boom happened.
I lost access to one of my wallets but then found access to the other. It had gone up by, like, 10,000 percent. There wasn’t much in it but it was quite a significant jump.
I also had some Dogecoin. I don’t really like Elon Musk but I saw him tweet something so I just bought it. That exploded as well.
I’m completely out of the market now, though. It’s way too volatile and filled with people I generally don’t want to be associated with.
What was your profit, if you don’t mind me asking?
Yeah, it was pretty significant. My Dogecoin went up by about 800 percent and my Bitcoin went up. I’d say I put in $60 and it went up to $8500. But that was just purchasing and forgetting about it.
So you never actually had a strategy?
Yeah, literally. I just completely forgot it.
Do you know how much was in the wallet that you lost?
It would probably be in the scope of $50,000-$60,000 by now. I’ve been through all the motions, I just can’t find the password.
Do you think you’ll invest again?
No, I would almost certainly not. It’s way too volatile and terrible for the environment with the mining that goes on, and I’m just not particularly into it. It just seems like another timeshare scam at this point, with new coins popping up every day, markets deleting coins, and people losing hundreds of thousands of dollars. There’s just no point in my eyes. I really can’t see myself getting back into it.
You don’t think there’s a future where everyone will be using crypto?
No, I really don’t. Not at all. It’s cash or nothing at this point. A lot of businesses just won’t take it. I can’t see it being regulated as a form of income. I can’t see people being paid with Bitcoin in big corporations. Maybe the odd transaction if you’re a smaller business but I really can’t see it replacing cash.
Charlotte, Information Management, 28-years-old: “We weren’t looking to get quick money from it.”
So you’ve invested, but why? What was the motivation behind it?
We bought Etherum at the end of 2017. We were kind of aware that the crypto thing was happening. But actually, we got into in a really strange way.
Our friend is a lecturer at a big university and does a crypto course there. We asked him to do the presentation for us that he gives to his new students. He had already made heaps of money. He’d given a bunch of money to his mom, he bought a Tesla, he bought an apartment. So we saw a real-life example of what investing in it looked like. I think we put in $1,000 and we just left it there. We check it every six months. I think at the moment it’s at $6,000.
Did you ever think about investing that $1,000 in something else?
Well, he was so convincing. And, obviously, because it was all researched we didn’t look into anything else. We thought we would just leave it and then it would grow. Whether that takes five or ten years, we didn’t really care. We weren’t looking to get quick money from it.
So when would you take money out?
I think that it’s a good idea to have a specific number in mind for something. For us, if it gets to a stage where it can give us a deposit for a house, we would probably look at withdrawing it.
What’s happening with that guy that put you on to it, is he still buying cars?
We haven’t seen him for a little while, but I’m pretty sure he’s still rich.
Michael, Crypto Full-timer, 36-years-old: “I’ve taken over $100,000”
In a market that’s pretty volatile, what were your initial motivations for buying?
So, I initially found the Bitcoin White Paper through Reddit and after reading it I thought, “This is going to change the way we use money”.
The internet has changed so many different industries, so I thought that there’s no reason why money shouldn’t be one of the things that gets taken over by the digital revolution. That was in 2016.
Do you remember what you invested in?
I invested in a few coins back then. Ethereum, Manero, Ripple, they were the main ones.
Roughly how much have you made?
I mean I still hold a lot of it in crypto. I initially invested about $4000 and I’ve taken over $100,000, and I am still holding a large amount of crypto.
When you initially got into crypto did you think that it had the potential to make you that much money?
Yep, and I think it’s got a long way to go. I don’t think it’s over, that’s why I’m still holding. I’ve been holding for five years. I see it as my retirement money, and I’m looking at, in the next 5 years, not having to work anymore.
Do you have a strategy or do you just hold it?
Yeah,I have a strategy, in that I like to take profits once the bull cycle has been in full swing. I’ve been in two bull cycles now, and once it starts going parabolic that’s when I start taking profits.
I also have a crypto card which I use to pay for things – another way of me just cashing out and taking profits along the way.
Are you ever worried that you could lose a lot of the money you’re holding or is that just part of the process for you?
I mean, it is a bit of a rollercoaster ride but at the end of the day I’ve taken out much more than I’ve put in. So at this point I can’t really lose. I’m playing with house money at this point. I’m a bit of a gambler by nature anyway. I’ve played poker for many years and I’m a bit of a risk taker, in that regard. I’ve already made my gamble on this one and won.
Would you recommend crypto to people now?
I do have a lot of people asking me about that right now. It’s a tough one because I’m always very cautious recommending it at this point in time. At other times I push it more. I’ll be waiting for it to dump and get into the next cycle before I tell people to start buying again.
The post Making Cash Quick, Losing it Quicker: We Asked Young People Why They’ve Invested in Crypto appeared first on VICE.