The Extreme Highs and Lows of Trading Crypto

The promise of cryptocurrency has captured the imagination—and wallets—of many. For some, it’s all about the technology, the unbridled potential of a stateless and decentralized money supply. For others, it’s simply the prospect of getting rich, quick. 

In 2017, the value of Bitcoin surged more than 1,000 percent, which garnered the attention of people around the world. Since then, many have dusted off their apprehensions over crypto and tried their luck winning the fabled crypto jackpot.  

“Those are the success stories that I’m chasing after,” said 27-year old Gregory Jaeger. “I’ve tried looking for coins that could have that potential to kind of skyrocket in the next year.”

Of course, with extreme highs also come extreme lows. People who’ve played the crypto game were met with varying degrees of success. Some have profited generously from their crypto investments, and others have lost literally everything chasing the dream. In the former camp is 26-year-old Willard. Willard requested the use of a pseudonym for fear of repercussions, because he said crypto still isn’t widely accepted by traditional financial institutions in the Philippines, where he’s based.  

Willard invests in crypto to supplement his full-time job. He sees it as a way to grow his money exponentially and eventually free himself of financial constraints. 

“I have a goal, but my goal is set to be improbable: retire by 30,” Willard said. “I think it’s possible with crypto, honestly.” 

Willard follows a set investment strategy, where 70 percent of his portfolio is dedicated to long-term investments and possibly swing trades, which can last from a couple of days to several months. The remaining 30 percent goes into new projects, which are usually shorter and riskier, but with the potential to reap huge rewards. Willard is particular about the new projects he invests in and spends at least 20 hours beforehand researching the project. 

So far, Willard has invested 3 million Philippine pesos (US$57,512) into crypto. One investment of 700,000 Philippine pesos (US$13,419) is now worth 5 million Philippine pesos (US$95,853). 

“From that [investment] alone, if I decided to just sell it now, it’s already almost twice the principal amount,” Willard said.  

Most cryptocurrency traders rely on that one good investment to offset the losses—of which, any experienced trader will tell you, there are inevitably plenty in the unpredictable game of crypto. Willard said one of his biggest losses amounted to almost 0.45 ether—the cryptocurrency generated by Ethereum—which was equivalent to about US$2,000 at the time. 

“I watched the value of [that investment] depreciate to 0.01 ether,” he said.  

Where people like Willard can offset the losses with a healthy amount of profit from other investments, there are those who can’t stomach the extreme highs and lows of cryptocurrency trading. Jaeger is one of them. 

Jaeger, who is also based in the Philippines, considers himself a small-time trader. In between chasing his ultimate goal of finding the “next Bitcoin,” he also thought he could do crypto full-time to sustain a simple lifestyle. Last year, he engaged in futures trading, which he treated similarly to day trading. So instead of buying and holding coins for extended periods, he said he would trade within the day and take whatever profit or loss was made therein. He gave himself a quota of earning $20 a day, which he thought would be easy enough to achieve. 

“I would spend eight to 12 hours in front of the computer calculating entries or charting. It’s kind of stressful and the market is very psychological. Sometimes, when you lose money, you say, ‘OK, I’m going to make it back. I’m going to make a trade to kind of recover my loss.’ And you end up losing more and you get really frustrated and really stressed,” Jaeger said.

“It felt like a never-ending cycle where you had to keep investing to stay in the game. If you run out of money to invest, it's all over. That’s what happened to me.”

Jaeger said he experienced his biggest crypto loss during the Dec. 4 Bitcoin crash last year, which prompted an “emotional breakdown alongside the market.” Jaeger has since taken a break from crypto, but said that he plans on investing again. Looking back, he said having a full-time job would make crypto trading more sustainable, and that, in any case, crypto traders need to be good at preserving their capital and not getting too emotional in their trades. 

For most traders, success in any investment is all about strategy—knowing when to pull out, how to read the market, and how to cut your losses. But in an industry as young and volatile as crypto, sometimes success is just a matter of dumb luck. 

A Reddit user that goes by the name Merkado Barkada said that he had bought 8 bitcoin in 2012 as a gag, at US$9 a pop. As of today, the value of a single bitcoin stands at almost US$39,339. 

“[My success] has nothing to do with [me] foreseeing the financial power of Bitcoin—nothing at all,” Merkado Barkada said. “I bought it because it was just kind of hilarious as a joke coin. I guess the shitcoin of those days was Bitcoin, and I bought it.” 

This early win influenced his trading style. Because of it, he said he felt he could “suck up quite a bit of loss, without incurring a real loss.” So while he considers himself a “very cautious stock investor,” he also thinks of himself as a “reckless Bitcoin investor” because he doesn’t take crypto as seriously as conventional investments.

“When my stocks fail or trades bomb, or I have a string of bad trades in actual stocks, I feel physically sick. I feel ill. But when Bitcoin goes down over 30 percent over the course of a few months, I feel nothing. It would be hard to get me to care less,” Merkado Barkada said. 

Unlike other cryptocurrency traders, he doesn’t rely on whitepapers and project roadmaps. So far, he’s invested US$20,000 into cryptocurrency, and in at least two instances, has invested in a shitcoin—a coin of no inherent value—just for the hell of it. 

“During one of these stupid frenzies, I had a friend in Japan who said ‘Hey, there’s a stupid dog coin that’s a copy of Dogecoin. Maybe you should buy it,’” Merkado Barkada said, referencing the “meme coin” Shiba Inu, which some consider to be a shitcoin. And so he invested about US$3,000 into it. Its value rose a month later, so he sold everything and made US$23,000.

So while some think there’s a rhyme and reason to crypto investment success, Merkado Barkada’s experience shows that sometimes, you just get lucky.

“I’ve super benefitted from dumb, stupid luck and continuing to invest in a self-aware, reckless manner,” he said. 

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