… also the most volatile

You probably guessed it. I’m talking about Cryptocurrency. Specifically Bitcoin, but this stands true for the entire digital asset class (well the volatility at least). The price fluctuations for Crypto are not for the faint of heart and they have caused plenty of realized losses. Think NFTs (the same NFT going for $10,000 are not pennies), Bitcoin crashes, and Digital Real Estate. At the same time Crypto have posted higher returns since inception than any other asset class with the NASDAQ coming in at second place with only 20% annualized average returns.

While Crypto might be one of the most volatile asset classes there is (and not sure how long it’ll last) as an investor and Millennial I can’t ignore the returns. This could be one of the biggest years for Crypto and I might as well risk it for the biscuit (old man saying that means I’m going to risk it for some returns).

data from YCharts and Forbes

A 230% Annualized Return

I haven’t rode the Bitcoin or Crypto train since inception so I have missed out on some of these returns, but I have seen some of them. I’ve seen 60% Return on my Bitcoin (BTC), 13% on my Ethereum (ETH), and a small 2% gain on my XRP. I think that’s only the beginning with a few catalysts on the way for 2024. As I always say though, I’ve got to be transparent and at the beginning of 2023 my unrealized return was horrendous. Something most investors would panic sell and run the other way. I was down 32% or $17,707! Fast forward 12 months and I’m up 21% or $22,000. That’s a massive swing and proof of just how volatile this can be. I’m here for the next bull run at least because this might be the last big pump for Bitcoin.

What I use to track and store all of my digital assets

I have never been someone who believes in the asset class of digital currency. I see the returns and believe that the right tokens can provide life changing wealth, but I don’t believe I’ll leave my money in this for the long term. With that said I do believe in the technology behind it and how it can be use to fix our financial system and improve transactions for things like real estate, stocks, and more. We’re just talking about the wealth today though.

I use exchanges (Coinbase and Uphold) and cold storage (Trezor for the win here) to protect some of my crypto especially after experiencing losses from the FTX scandal (I had some ETH and BTC in BlockFi who filed Bankruptcy). I also use Koinly to track ROI, cost basis, and prepare for taxes. I’ve used other crypto services, but Koinly is the one easy one I’ve found that connects to cold storage wallets without painful excel imports. Since I have a set amount of my Net Worth reserved for Crypto I’ll most likely be cashing out some returns in 2024 pending the multiple catalysts. TL;DR the other article: Bitcoin Halving, ETF approval, and Regulatory clarity. 

Historically the Bitcoin Halving (before and after) provides astronomical increases to the price and the rest of the industry. The ETF approval for Bitcoin and potentially ETH could also provide a large influx of institutional money pushing the price even higher.

What I’m doing to prepare for the bull run

I plan on selling some of my Bitcoin, ETH, and hopefully XRP to place into some other investments for the long term to create some passive income. I’m thinking the classics like Real Estate, REITs, Stocks, and potentially metals. Until that windfall though here’s the plan…

1) Unstaking the staked Crypto: I’m unstaking most crypto to prep for a quick sell. Unstaking on most exchanges takes up to a week and as volatile as prices are I don’t want to miss the potential highs when I want to take my gains.

2) Knowing my number: Doing some math in my head and knowing where I’ll be taking my gains and what number I’ll be exiting at. Then this protects me from getting greedy or helping me ride down the typical consolidation that happens around a halving.

3) Knowing where my cold storage is: This might be self explanatory but you’d be surprised. Go find where you’ve got your cold storage locked up and make sure you’ve got the passcode and seeds.

4) Prepare to make your own decisions: People have said it was a waste of money to do a lot of things in my life while they stood on the sidelines. Make sure you hold strong in whatever belief you have if you’ve got the data to back it up. If not, understand you’re taking a risk and at the end of the day gambling.

I’m hoping this ages well and future Josh is writing about retiring early.