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  • Writer's pictureDragostin Kozhuharov

Crypto because it's fashionable

My Crypto Journey

I avoided the crypto topic for months. You read that the cryptocurrency market is in bull mode. Bitcoin hit new all-time highs, Ethereum nearly did as well. Recently we had a pullback in prices.

I first heard about Bitcoin at the time when it was trading around 300$ (end of 2013). As someone who was starting his studies in the finance space, I dismissed it. I remember saying that it didn’t have any value and there is no point in owning any. I might even have said that it’s a scam and it will never be used for anything legal.

My friend at the time insisted that we must buy some, but I thought I could spend the money on something better – drinking and partying. Because that is what students do.

I didn’t hear about it again until 2017. I was working as a stock and etf proprietary trader and some of my colleagues decided to start buying crypto and to get involved in mining. I was playing the adult again – bringing the BTC hate to a whole new level. But they believed in the technology and I couldn’t get them to change their minds. BTC was trading above 1000USD then, and for someone who believed its value is 0, I wasn’t going to start buying.

I did read about altcoins for the first time then. I saw that some of them were worth less than 1USD. I decided that I can spend a very small amount of my money on pure speculation in altcoins. In case they go up, I make good money, in case they go down to 0, I don’t consider suicide because I lost a lot. The thinking was – I can be a hater of the space, or I could get involved and see what happens. It won’t hurt me if I put a few hundred in altcoins.

I also got involved in the mining with my colleagues. We picked Ethereum for that operation and each participant started ordering GPUs – this was difficult at the time, as everyone was doing the same and there was a shortage worldwide for the GPUs which were good for mining. This created a set of different problems – the more people were mining, the difficulty increased which meant that by pilling in everyone was making less money. Due to high cost of electricity, Ethereum needed to trade above a certain price for the operation to be profitable.

That’s how from dismissing the space, I got involved by not only buying cryptocurrency, but also mining it.

I switched jobs before the big bull market of 2017 started. I worked at a FCA regulated brokerage at the time and we were one of the first CFD brokers to go big into the crypto space – offering 24/7 trading, more coins than any other broker and some of the best spreads. (all of that didn’t last long)

The amount of people who were opening accounts to trade crypto was crazy. The way the price was going up was even crazier. It seemed as it would never stop. The brokerage decided to get more involved in the crypto space by doing their own project and ICO. While I wasn’t involved, some of the people around me were and I was learning about the ICO space.

It seemed like everyone was doing ICOs at the time – for good and not so good reasons. I did attend a couple of shows to promote the ICO project. The first one was epic – people were queuing outside before the start. After the doors opened, the capacity of the building filled so fast, that there were people outside waiting to be let in. I remember someone telling me that the line was so big that it was zigzagging like a snake in front and around the building. Those were the golden crypto days. Or at least I thought they were. The crypto bull run now looks even crazier.

What happened with the mining and my altcoins? We stopped the mining operation less than a year after we started as prices at the time weren’t high enough to make it viable. I was trying to make the point that for a crypto market, the future value of the asset mined would be more important but nevertheless we stopped doing it.

Apart from one buy of Ethereum and buying a few more altcoins for small amounts, I haven’t done much else.

I don’t add the return on my crypto trading to the returns which I made from trading traditional assets for the following reasons:

  1. I haven’t booked profits

  2. I don’t want my numbers to be inflated by this asset class (it will misrepresent my trading)

  3. I wasn’t an active trader. I buy and hold crypto assets.

What is my stance on crypto today?

I think there is a use case for crypto and the smart contract feature of it. It could be used in banking for back office and settlements. It could be used for decentralization of certain industries which have stayed in the dark ages in terms of technology (you know who you are).

I don’t think that there is a use for the current model with coins and ICOs. It will be a cross between the smart contract feature and traditional currencies.

In summary I am not a believer, but I am involved in the space, because it doesn’t hurt to give something a try when you aren’t risking a lot.

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