Cryptocurrencies are Volatile - Here is How I Lost $1,000 in Value in a couple of days

| Crypto | 5 seen

Wow, what a bearish ride for the past couple of days in the cryptocurrency world. Bitcoin and all the other major altcoins have lost value on average by 25% in the past couple of days. From trading BTC at $11,615 on March 5th down to $8,606 on March 9th. 

Long story short - I've been investing in cryptos since the second part of 2017. Before actually investing in cryptocurrencies I developed the so-called dollar cost averaging plan, and decided to buy the major cryptocurrencies once in the month no matter the price. Dollar cost averaging helps to exclude emotional decisions. My plan is to acquire more coins until the end of 2020. That's roughly 2 years and 9 months to go.

Currently, I own following cryptocurrencies - bitcoin, ethereum, litcoin, ripple, bitcoin cash and siacoin. Bitcoin cash and Siacoin I've added to my crypto portfolio with the start of 2018. Here is how my dollar cost averaging chart looks now:

Dollar cost averaging crypto portfolio 2018

Dollar cost averaging crypto portfolio 2018

Despite a massive crash with 25% wiped in value in matters of a couple of days, I'm still in a positive side, with about +76% value growth, thanks to the dollar cost averaging. 

Now as cryptocurrencies are volatile, there are two possible scenarios I currently consider for my crypto portfolio - first, there is a great chance buying the dips and hopping for value appreciation in the future, which means keep sticking with the plan and buying coins once in the month no matter the price.

Second, as being a reasonable investor I understand I should skim the profits once in the while, and as I can't predict what will be the price for cryptocurrencies at the end of 2020, I have decided to sell some part of the portfolio at all time highs. The last time my portfolio experienced an all-time high value was back in the December 2017, reaching jaw-dropping 340%.

The current all-time high I'm looking to sell some part of the portfolio is set at following rates:

  • bitcoin: $14,719.74
  • ethereum: $1,104.47
  • litcoin: $242.53
  • ripple: $2.36

These are historically the highest prices my portfolio has experienced in the past.

Here is how my portfolio would look like if the prices were such as of today:

Projected portfolio value with historical All Time High prices

Projected portfolio value with historical All-Time High prices

Now, this is some EUR 3,000 difference. As my crypto portfolio is not considered huge, I would most probably sell of just 10% from each coin reaching historical all-time high.

The question remains - what should I do with cash earned from such sell-offs. Again I can see two possible scenarios - either to leave it on investor account on Coinbase and wait for the next dip to buy back more coins or take off this money and invest in stocks or peer to peer lending.Time will show, but right now let's see what amount we are talking about, considering a 10% sell-off at all time high prices:

  • bitcoin: $156.65
  • ethereum: $158.18
  • litcoin: $174.09
  • ripple: $252.94

Total: $741.86

Currently selling of 10% of my portfolio would give me about $400, hoping to reach previous all-time high levels and selling then 10% would almost double the value.

Now there is no guarantee that all crypto coins will reach the previous all-time high levels, but I'm pretty bullish on this.

Add new comment