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I've made about $110k profit this year in crypto on a $21k investment earlier this year, and I think this is all a giant bubble. I was at my parents' house for

I've made about $110k profit this year in crypto on a $21k investment earlier this year, and I think this is all a giant bubble. I was at my parents' house for Thanksgiving and a commercial with Ron Paul talking about Bitcoin came on, which coincided with around the time it went to $10k, and it hit me really hard that this isn't going to last forever (and probably will hurt sooner rather than later). I liquidated everything and just entertain myself doing some day trading on GDAX. I don't hodl anymore. The entire thing is absolutely stupid, and isn't going to last forever. People are way too bullish on it. People who have no business investing in it are taking on debt to do so, with no clear exit strategy other than "the moon." A lot of people who don't have any money are going to get absolutely toasted when the pendulum swings the other way. They're in it to get rich. They have no idea what blockchains are. They just think they're buying magic internet money people get rich from. To put a little perspective on how ridiculous this all is: Last night after Coinbase came back from maintenance, there was the (expected) sell-off, so I figured I'd make a quick buck and bought 300 LTC for about $241 each, then sold it a few minutes later for $251 after the instant rebound and went to bed with a nice $3k profit. I woke up this morning and was astonished to see that LTC was about $380. This was in the course of about 5 hours. Had I not sold it last night, I would have made almost $40k. I'm a little annoyed about that, but again: this is a stupid, irrational bubble that makes absolutely no sense. It's entirely speculative. I think crypto and blockchain has a future, but it has to solve a few problems first (transaction fees/time and anonymity). None of the big three currencies do that well enough yet. This bubble is going to pop soon and I'm worried that a lot of people are going to get impacted badly.

byproxy 9y ago
I guess this applies to non-crypto trading as well, but, how do you manage taxes on these transactions?
- garybro 9y ago
  I know what I put in, and I know what my profit is, so I am going to report the net gain and pay the tax on that (ugh)
- elif 9y ago
  [IanaA] If your liquidated positions are open for over a year, you can do 15% long-term capital gains in the US. The exchanges have an export history feature, which I'm planning to put into a spreadsheet to calculate profit. That's gonna be a fun weekend project.
  - jerkstate 9y ago
    There's a very nice library called ccxt that uses a code generator to produce python (async and standard), javascript, and PHP libraries that implement a standard interface for dozens (hundreds?) of crypto exchanges. I think a nice project would be an in-browser JS app that accessed each of the APIs in my exchanges (via logged in cookies or API keys or whatever) to pull trade history, deduct fees, and create a CPA-friendly tax form from all of my crypto exchanges.
andrewmcwatters 9y ago
Hey, good on you: always be happy about selling early and not sad over selling late.
deleted 9y ago
[deleted]
charlesdm 9y ago
Even if it is a bubble, that doesn't mean it can't go another 20x from here, depending which crypto you put your money in. There's cheap liquidity (ho ho ho said the FED and the ECB), there are institutions (pension funds) that are starting to buy in, and in comparison, the dot-com bubble (which was mainly a US led bubble, not global) went to $5.7tn to $1.7tn. Gold is worth $8tn globally. Why couldn't Bitcoin get to part of that level, e.g. $2tn? It sure looks like a bubble, and it probably is, but it could literally be the largest bubble in our lives -- unlike one stock in the market, this is a global phenomenon + you only have a few currencies that matter.
- garybro 9y ago
  You're not wrong. It very well could. I think there will be a major correction before (if) that happens, though.
  - charlesdm 9y ago
    You're not wrong either. And the higher it goes, the riskier it gets. And while I'm seeing signs of a bubble, I don't think that (excluding a few volatile 30-40% corrections along the way) we will see an implosion in 2018 just yet. The entire crypto space "only" equals the value of Facebook. In the end, if it goes another 30x from where we're at today, and then has an 80% correction, you'll still be up 6x. It only makes sense to exit if you think such a correction is imminent, or you believe the entire space is going to zero.
- matchagaucho 9y ago
  Gold is worth $8tn globally Drawing comparisons between gold and a fiat currency (BTC) is completely confusing.
  - Mtinie 9y ago
    “Fiat” usually implies something different from the way you are using it. No government has issued Bitcoin via fiat, there are no treasuries or armies backing it. Gold is a tangible commodity. I’ve been in the cryptoasset space for a while and I’m still not exactly sure how to cleanly classify it.
harryh 9y ago
Do you feel any guilt that your profits are at the expense of naive speculators who "have no business investing in it are taking on debt to do so, with no clear exit strategy" ?
- garybro 9y ago
  Not a bit.
- shak77 9y ago
  If you invest in something you can lose, especially if you have no idea of what you're doing. There's no guilt to be had.
- sumedh 9y ago
  > naive speculators They are doing it willingly to get rich.
- Frogolocalypse 9y ago
  They shouldn't be investing in unregulated markets.
deleted 9y ago
[deleted]
agorabinary 9y ago
"it has to solve a few problems first (transaction fees/time and anonymity)" Bitcoin Lightning currently works on testnet ... give it a few months and those problems will be solved. The price is exploding in anticipation of events like this.
- hossbeast 9y ago
  I've used the testnet wallet and it works just like you'd expect. Very exciting. https://play.google.com/store/apps/details?id=fr.acinq.eclair.wallet https://play.google.com/store/apps/details?id=fr.acinq.eclai...
deleted 9y ago
[deleted]
elif 9y ago
>I woke up this morning and was astonished to see that LTC was about $380. This was in the course of about 5 hours. Had I not sold it last night, I would have made almost $40k. I can relate. If I'd done the exact paired trades i did this month (only between btc, bch, eth, and usd), only at different times than i did, i would have doubled my money yet another time, for a life-changing sum. Instead I've been sleeping well every night for a month on a healthy exit. Even with hindsight, I don't have any regrets. I didn't get into the space to get rich and sweat at night, I got in to socialize monetary control. Now crypto doesn't even want to be money. Once this bubble cools off I can start dreaming again.
- petre 9y ago
  Astonished, why? Capital is fleeing BTC to LTC probably because of BTC holders getting nervous about high volatility and exchanges going down or temporarily suspending transactions. Which in turn will also screw LTC. This article is a clear indicator about this.
junk_f00d 9y ago
Do you feel all crypto projects are included in the bubble you described? Personally, I think many are extremely overbought (BTC, LTC, ETH, etc) but can't help but feel that those with real utility and industry value are (relatively) undervalued.
emmasz 9y ago
Some people could be in it for the adrenalin. People do dangerous things all the time, so it can still go on... what's the serotonin level for crypto users? :)
- garybro 9y ago
  I'll admit, I'm a gambler, so trading is kind of a rush.
toki5 9y ago
Wait, I'm confused by your numbers there. Buy: 300 LTC @ 241 = $72,300 + 1.49% fee ($1077) = $73,377 cost basis Sell: 300 LTC @ 251 = $75,300 - 1.49% fee ($1122) = $74,178 gross $74,178 - $73,377 = $801 net and that's before accounting for taxes. What am I missing here?
- airmondii 9y ago
  are those coinbase fees? gdax fees are lower, and they're zero if your resting order gets hit
- dmcy22 9y ago
  There are no fees on GDAX (Coinbase’s exchange) if you are a market maker, i.e. post only limit orders. So $801 + $1122 + $1077 = $3000. Even if you don’t plan to trade, it might be a good idea to buy/sell through GDAX rather than Coinbase to avoid the fees.
- garybro 9y ago
  I only post limit orders and pay 0% maker fee on GDAX. I've never paid to make a trade. If you do pay as a taker, BTC is 0.25% and LTC is 0.3%, but I set relatively conservative exits for my positions and haven't had much trouble making them.
ll931110 9y ago
When you start trading, you quickly learn that regrets is the norm, and feel less bad about making mistakes.
drvdevd 9y ago
This is really cool that you made a profit on this bubble, and if I were to take that point to heart and start investing USD in BTC, I guess I would just become part of that. As you say, I would just be out to get rich. But what about all the non-fiat purposes of crypto currency? It seems that is what’s currently getting lost in the conversation. For example, I simply want a way to accept electronic payments from people without dealing with middle men. I want merchants and the general public to become aware of the inherent value in some blockchain by itself as a way for us all to spend “money” and get “paid” in a peer-to-peer manner. I hope the people who are buying into this bubble come to see this. But I’m afraid if they do get burned, they will have missed the whole point.
- asciimo 9y ago
  This is the "intrinsic value" the media claims does not exist.
crystaln 9y ago
BTC will supplement gold for value storage and will hit a $5T market cap in a few years IMO. It certainly has utility for storing and moving value. Don't underestimate that.
- petre 9y ago
  Gold doesn't have 30% volatility over 24h.
  - crystaln 9y ago
    BTC will not once it gets into multitrillion dollars. It's a young asset with no derivatives that the market isn't sure how to value. Also there are ways to hedge volatility.
  - Frogolocalypse 9y ago
    Gold doesn't go up 15x in a single year.
- rak00n 9y ago
  You can't steal gold because someone forgot to update their machine and left it connected to Internet. For bitcoin, yes you can.
subsaharancoder 9y ago
sure hope you put some aside for Uncle Sam..
anonu 9y ago
> I don't hodl anymore. I've just been told that hodl means "hold on for dear life". LOL
icemelt8 9y ago
Thats a lot of profit, can you please share your strategy or atleast tell me some coins to hold.
cm2187 9y ago
The correct way to look at a missed investment in my opinion is to look back and consider if given the information you had at the time and the risk you were willing to take, you would have made any other decision. Ignoring these two factors is like regretting not having picked the right lottery number.
cadamson 9y ago
What prompted your initial $21k investment?
jgrowl 9y ago
I had the exact same experience visiting family over Thanksgiving. They watched foxnews the entire time and I remember seeing that Ron Paul commercial and also another one that was throwing out buzzwords and phrases like "Built with blockchain technology." I was just like wow, this is going to be pulling in a lot of people that have no idea what they are doing. Everything seems irrational. Who knows though.
laksmanv 9y ago
Is there an email I can reach out to you at?

byproxy 9y ago

I guess this applies to non-crypto trading as well, but, how do you manage taxes on these transactions?

garybro 9y ago
I know what I put in, and I know what my profit is, so I am going to report the net gain and pay the tax on that (ugh)
elif 9y ago
[IanaA] If your liquidated positions are open for over a year, you can do 15% long-term capital gains in the US. The exchanges have an export history feature, which I'm planning to put into a spreadsheet to calculate profit. That's gonna be a fun weekend project.
- jerkstate 9y ago
  There's a very nice library called ccxt that uses a code generator to produce python (async and standard), javascript, and PHP libraries that implement a standard interface for dozens (hundreds?) of crypto exchanges. I think a nice project would be an in-browser JS app that accessed each of the APIs in my exchanges (via logged in cookies or API keys or whatever) to pull trade history, deduct fees, and create a CPA-friendly tax form from all of my crypto exchanges.

andrewmcwatters 9y ago

Hey, good on you: always be happy about selling early and not sad over selling late.

deleted 9y ago

[deleted]

charlesdm 9y ago

Even if it is a bubble, that doesn't mean it can't go another 20x from here, depending which crypto you put your money in. There's cheap liquidity (ho ho ho said the FED and the ECB), there are institutions (pension funds) that are starting to buy in, and in comparison, the dot-com bubble (which was mainly a US led bubble, not global) went to $5.7tn to $1.7tn. Gold is worth $8tn globally. Why couldn't Bitcoin get to part of that level, e.g. $2tn? It sure looks like a bubble, and it probably is, but it could literally be the largest bubble in our lives -- unlike one stock in the market, this is a global phenomenon + you only have a few currencies that matter.

garybro 9y ago
You're not wrong. It very well could. I think there will be a major correction before (if) that happens, though.
- charlesdm 9y ago
  You're not wrong either. And the higher it goes, the riskier it gets. And while I'm seeing signs of a bubble, I don't think that (excluding a few volatile 30-40% corrections along the way) we will see an implosion in 2018 just yet. The entire crypto space "only" equals the value of Facebook. In the end, if it goes another 30x from where we're at today, and then has an 80% correction, you'll still be up 6x. It only makes sense to exit if you think such a correction is imminent, or you believe the entire space is going to zero.
matchagaucho 9y ago
Gold is worth $8tn globally Drawing comparisons between gold and a fiat currency (BTC) is completely confusing.
- Mtinie 9y ago
  “Fiat” usually implies something different from the way you are using it. No government has issued Bitcoin via fiat, there are no treasuries or armies backing it. Gold is a tangible commodity. I’ve been in the cryptoasset space for a while and I’m still not exactly sure how to cleanly classify it.

harryh 9y ago

Do you feel any guilt that your profits are at the expense of naive speculators who "have no business investing in it are taking on debt to do so, with no clear exit strategy" ?

garybro 9y ago
Not a bit.
shak77 9y ago
If you invest in something you can lose, especially if you have no idea of what you're doing. There's no guilt to be had.
sumedh 9y ago
> naive speculators They are doing it willingly to get rich.
Frogolocalypse 9y ago
They shouldn't be investing in unregulated markets.

deleted 9y ago

[deleted]

agorabinary 9y ago

"it has to solve a few problems first (transaction fees/time and anonymity)" Bitcoin Lightning currently works on testnet ... give it a few months and those problems will be solved. The price is exploding in anticipation of events like this.

hossbeast 9y ago
I've used the testnet wallet and it works just like you'd expect. Very exciting. https://play.google.com/store/apps/details?id=fr.acinq.eclair.wallet https://play.google.com/store/apps/details?id=fr.acinq.eclai...

deleted 9y ago

[deleted]

elif 9y ago

>I woke up this morning and was astonished to see that LTC was about $380. This was in the course of about 5 hours. Had I not sold it last night, I would have made almost $40k. I can relate. If I'd done the exact paired trades i did this month (only between btc, bch, eth, and usd), only at different times than i did, i would have doubled my money yet another time, for a life-changing sum. Instead I've been sleeping well every night for a month on a healthy exit. Even with hindsight, I don't have any regrets. I didn't get into the space to get rich and sweat at night, I got in to socialize monetary control. Now crypto doesn't even want to be money. Once this bubble cools off I can start dreaming again.

petre 9y ago
Astonished, why? Capital is fleeing BTC to LTC probably because of BTC holders getting nervous about high volatility and exchanges going down or temporarily suspending transactions. Which in turn will also screw LTC. This article is a clear indicator about this.

junk_f00d 9y ago

Do you feel all crypto projects are included in the bubble you described? Personally, I think many are extremely overbought (BTC, LTC, ETH, etc) but can't help but feel that those with real utility and industry value are (relatively) undervalued.

emmasz 9y ago

Some people could be in it for the adrenalin. People do dangerous things all the time, so it can still go on... what's the serotonin level for crypto users? :)

garybro 9y ago
I'll admit, I'm a gambler, so trading is kind of a rush.

toki5 9y ago

Wait, I'm confused by your numbers there. Buy: 300 LTC @ 241 = $72,300 + 1.49% fee ($1077) = $73,377 cost basis Sell: 300 LTC @ 251 = $75,300 - 1.49% fee ($1122) = $74,178 gross $74,178 - $73,377 = $801 net and that's before accounting for taxes. What am I missing here?

airmondii 9y ago
are those coinbase fees? gdax fees are lower, and they're zero if your resting order gets hit
dmcy22 9y ago
There are no fees on GDAX (Coinbase’s exchange) if you are a market maker, i.e. post only limit orders. So $801 + $1122 + $1077 = $3000. Even if you don’t plan to trade, it might be a good idea to buy/sell through GDAX rather than Coinbase to avoid the fees.
garybro 9y ago
I only post limit orders and pay 0% maker fee on GDAX. I've never paid to make a trade. If you do pay as a taker, BTC is 0.25% and LTC is 0.3%, but I set relatively conservative exits for my positions and haven't had much trouble making them.

ll931110 9y ago

When you start trading, you quickly learn that regrets is the norm, and feel less bad about making mistakes.

drvdevd 9y ago

This is really cool that you made a profit on this bubble, and if I were to take that point to heart and start investing USD in BTC, I guess I would just become part of that. As you say, I would just be out to get rich. But what about all the non-fiat purposes of crypto currency? It seems that is what’s currently getting lost in the conversation. For example, I simply want a way to accept electronic payments from people without dealing with middle men. I want merchants and the general public to become aware of the inherent value in some blockchain by itself as a way for us all to spend “money” and get “paid” in a peer-to-peer manner. I hope the people who are buying into this bubble come to see this. But I’m afraid if they do get burned, they will have missed the whole point.

asciimo 9y ago
This is the "intrinsic value" the media claims does not exist.

crystaln 9y ago

BTC will supplement gold for value storage and will hit a $5T market cap in a few years IMO. It certainly has utility for storing and moving value. Don't underestimate that.

petre 9y ago
Gold doesn't have 30% volatility over 24h.
- crystaln 9y ago
  BTC will not once it gets into multitrillion dollars. It's a young asset with no derivatives that the market isn't sure how to value. Also there are ways to hedge volatility.
- Frogolocalypse 9y ago
  Gold doesn't go up 15x in a single year.
rak00n 9y ago
You can't steal gold because someone forgot to update their machine and left it connected to Internet. For bitcoin, yes you can.

subsaharancoder 9y ago

sure hope you put some aside for Uncle Sam..

anonu 9y ago

> I don't hodl anymore. I've just been told that hodl means "hold on for dear life". LOL

icemelt8 9y ago

Thats a lot of profit, can you please share your strategy or atleast tell me some coins to hold.

cm2187 9y ago

The correct way to look at a missed investment in my opinion is to look back and consider if given the information you had at the time and the risk you were willing to take, you would have made any other decision. Ignoring these two factors is like regretting not having picked the right lottery number.

cadamson 9y ago

What prompted your initial $21k investment?

jgrowl 9y ago

I had the exact same experience visiting family over Thanksgiving. They watched foxnews the entire time and I remember seeing that Ron Paul commercial and also another one that was throwing out buzzwords and phrases like "Built with blockchain technology." I was just like wow, this is going to be pulling in a lot of people that have no idea what they are doing. Everything seems irrational. Who knows though.

laksmanv 9y ago

Is there an email I can reach out to you at?