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The Crypto Diaries…

Crypto and other digital assets are completely unregulated and can be hugely damaging to your wealth. Complete loss of your entire investment is a very real possibility. If you cannot afford to lose it, your cannot afford crypto. Crypto assets come in all shapes and sizes are massively risky and volatile for multiple reasons. Nothing you read below should be taken as a recommendation to buy crypto, in fact quite the opposite (but that’s not a recommendation either!!).




I met up with a friend, former colleague and fellow financial planner, we started talking crypto.

I can’t say I was much the wiser.

I did, however, decide to experiment and share my experiences with clients.



Step one, I set up an account with Coinbase

Step two, I became completely overwhelmed by the choice of crypto things to buy.

There is way more than just “currency” (as far as I can tell), this is no ways simple.

Nor is it easily understood.

I decide to put £100 each into Bitcoin and Ethereum because I have heard them.

What to do about all the rest?



I have decided that the best I can do is pick 25 randomly and see what happens.

I start putting £20 each into random crypto things.

I’ve read the short summaries of these things; they mean nothing to me.

This is 100% unabated speculation.



Crypto clearly doesn’t bear comparison or equate to anything else you can put your money in.

Already values are whip sawing around.

I guess some of these will go to zero.

I have committed £700 total.

Time to start thinking about the wider strategy.



The costs of buying and the markets going down mean I am showing a 30% or so loss.

Values change dramatically minute to minute.

There’s no way of knowing why or how.

In fact, how do I know that I definitely own what I think I do? It’s not like there’s a share register to inspect.

This is all on trust as far as I can tell.



As it’s 100% trust based then I must limit the total amount I put in.

That can be viewed in different ways, but a good starting point is “If it all went to zero what the maximum, I’d be willing to lose?”

£2,500 maximum.



Back to that subject I plan to “insure” myself by withdrawing original capital as soon as values are up substantially.

I need a proper measure though.

I’ll watch and see what comes to me.



So, if I get all my original capital back at some point, the remaining balance is free or “house” money.

Even still, if that gets to £X, I don’t cash in, and it collapses I’ll be pretty gutted.

And if I get out at £X and it soars to £Y I’ll be even more gutted?

This is the thing about individual holdings – we lose our nerve and can’t stay in the game, at some point we feel we have to get out.

It’s the same reason that nearly no-one has benefitted from the full 28,000% increase in Tesla shares since they started in July 2010 – the gains would have been so overwhelming way before today we simply couldn’t ignore them.

This is going to be emotional.



So, what is my £X? a decent holiday? My next car? A house?

I have settled on a total outlay of £3,000 over the next 12 months.

I’m adding no more until mid-February just to get a feel for what’s going on.

There’s no science to this, just feels like the right thing to do.



I’m trying to get my head around how crypto is being funded.

To buy it you need cash (in the main) and when you sell it you get cash back to use.

So, to my way of thinking, crypto is transferring cash from one person to another.

i.e., nothing is being created?

Where does all that cash come from? QE?

So, is this simply people looking for a quick buck return on their cash?



Whichever way you cut it the world of crypto is completely unregulated with no oversight.

There is no investor protection of any sort.

We do not experience this (in the UK at least) in any other area – travel, energy employment, pensions etc. etc. are all overseen, there are rules to be obeyed, compensation schemes in place when things go wrong.

It is exceedingly rare for there to be no recourse to anyone for an investable asset.

This undoubtedly makes it attractive to crooks and scammers.

At some point we will become aware of people being ripped off – stories will appear.

Caveat emptor.



Broadly speaking crypto is a zero-sum game.

Which means one person’s gain is another’s loss.

In crypto’s current format you have to be sure you will be consistently better than the person at the other end of the deal.

That’s highly unlikely.

In due course I imagine there will be pooled ETFs and funds etc. where investors can easily and cheaply gain access to a broad range of crypto assets.

That’s not the case now so picking individual cryptos and hoping for the best is what’s available.



For the last couple of days all 27 holdings have been taking a bath – their prices have plummeted.

£700 “invested” (spent?) 18 days ago is now valued at £530 – a drop of 24%.



I read these couple of articles with interest. I subscribe to Ben Carlson’s updates, I don’t always agree with what he says but I can’t complain that his views aren’t thoughtful, intelligent and well laid out:

Risk & Reward Expectations For Crypto does what is says on the tin, I’ll read it again and see how it affects my thoughts about my strategy.

Wealth Management Money is Coming For Crypto outlines the nascent efforts by the wealth management industry to make crypto more accessible / organised / useful as a portfolio component. Perhaps the biggest message here is that crypto is starting to gain a veneer of respectability – if the big banks / fund providers want in they believe it’s here to stay and there’s money to be made.

Everyday there’s more to understand which behoves a softly, softly approach I believe.

Crypto will have to go through all the growing pains, scandals, scrutiny and evolution that the stock markets did. Those stock markets represented the same “wild west” 100+ years ago that today’s crypto land does.

Soaring highs and crushing lows will be the order of the day for some time to come.



I think there has been a significant development in my thinking.

Crypto is and will remain a sideshow, it should not become the main attraction, it can’t and won’t lead to untold riches in the same fashion backing continued global economic growth has done and will continue to do.

I believe the only way to profit in crypto land is to trade your way in and out. The volatility in the prices is incredible. Every day at least one of the holdings is up or own by double digits.

I have no inclination to spend time trading. Crypto markets at 24/7/365 so the chances of getting caught out are as high as they can be. If I’m not going to trade and this is not an “investment” in the way I understand (a physical asset that might produce passive income with the strong prospect of capital growth), then I am assuredly a speculator.

Or, in simple terms, I am having a bet. And if I’m betting I can add discipline to what I’m doing. So, from today I will:

  1. Buy a little more of any of the 27 holdings once the price has fallen 30% from the average I paid, to buy low when the opportunity arises.
  2. Sell if I can get double my stake back, this leaves me with a “free” bet going forward.
  3. Only check the holdings once a week, to avoid temptation.
  4. Delete the Coinbase app from my mobile, to avoid temptation.
  5. Add a level of security making it impossible to look at my Coinbase account from my mobile, to avoid temptation.



Today, near as damn it, is one month since I first bought some crypto assets.

I have bought more as per the discipline outlined below  (i.e. when any of them are down 30% or more) but not had the opportunity to sell anything.

Currently my crypto assets are worth 17% less than I paid for them. If that trend continues for another 11 months then I will have lost 90% of what I paid over one year.

That’s both unlikely and quite sobering. Who is to say that won’t happen? Who knows? Absolutely no-one.

In other news the Advertising Standards Authority has banned “‘misleading’ and ‘irresponsible’ crypto ads” CLICK HERE to read more.

Which is a timely reminder that we should be very, very, careful of where we get our information from.

Be in no doubt that the malignant, self-interested sources massively outweigh and have bigger budgets than the benign and helpful.



Not much report on the face of it today. In total my crypto assets are worth a bit more than a week ago. Now the are down 14% rather than the previous 17%.

The graph showing progress over the last week indicates a 7.5% difference between the high and low water mark in the last week, with the week ending on a high.

But not enough has happened overall to necessitate further purchases or sales.

It will be interesting to see what happens over Christmas – I would be surprised to see some mass manipulation (wild swings) caused by a few “players” while the rest of us have taken our eyes off the ball with family and other matters to tend to. Let’s see.



It’s an obvious statement but an important one.

Not having the crypto app on my ‘phone means I rarely wonder what’s going on with my crypto until each Wednesday when I author a few notes.

This lack of activity results in temptation being eliminated which makes it much more likely I respond rather than react each week. In the long term responding is always better than reacting if you’re trying to build wealth.

And the response this week is….(almost) nothing doing. Prices haven’t moved enough to trigger a buy or sell, my account value has been up and down as much as ever.

My musings from 11/12/21 have proved to be helpful, but they do need a tweak.

The tweak is on the first Wednesday I will add to my holdings in the two crypto assets that, as far as I can tell, are most likely to survive long term. Namely Bitcoin and Ethereum.

Don’t ask me why, it’s not even a hunch, just responding to what seems like a sensible thought to me. And I’m not talking about piling on, just adding consistently for all of 2022 and seeing where we are then.

As at the  date of this update my crypto assets are worth “just” 7.3% less than I paid for them, my losses have been halved in a week.



An odd week in cryptoland. My collection of 27 crypto assets barely moved throughout the week, it was completely becalmed. That’s a first.

Out of 27 holdings, just 3 are showing a profit and overall I’m down about 5%, a slight improvement on last week.

With no other thoughts to share with you this week, I’ll share this article instead: Could Crypto Adoption Eventually Derail the Stock Market?



It’s been a bruising week in cryptoland. The total loss on my account is now 18.5%.

10 (out of 27) holdings have dropped so far I have made a further purchases.

A conversation with a client (who is an investment trader by profession) was interesting. His views, based on his dabblings, are as follows:

  • Only buy on strength and get out very quickly should it go against and break expectations. It’s too volatile an asset to risk acting otherwise.
  • Right now we are in no-mans-land, near the bottom of a recent consolidation phase.
  • Buy again should it move above recent highs.
  • Should it break below recent lows it could be a sell.
  • Caution though as there appears to be more institutional money moving into various crypto assets which could win the battle like it did during 2021.
  • Crypto has definitely become a trading asset rather than investment asset.
  • It will be more investment friendly in the near future, still a very young and immature asset.

Which I condense in my thoughts to the following:

  • Crypto is a market for trading as opposed to investing.
  • You need eyes in the back of your head.
  • And unfailing discipline.
  • And razor sharp reflexes.

And given that most of us have jobs, families, friends etc. that’s one hell of a commitment to have to make.

You’re taking your life in your own hands.



The losses have continued for the last week, my investment is 21% down in total.

The losses on some were such that further, small investments were made. This has inspired two changes to my approach to crypto, as follows:

  1. I will limit myself to three separate investments in crypto assets (other than Bitcoin and Ethereum).
  2. I will now only check what’s happening and update this blog on the first Wednesday of each month.



My portfolio is worth 30% less than what I paid for it. Not dissimilar to the “Covid Crash” of 2020.

I wonder if the recovery will be as swift?

Further losses have triggered multiple purchases. I have reached my limit of three separate purchases on several of the crypto assets now.

Let’s see where we are in a month.



Since I last posted Russia has invaded Ukraine. It is not until today that I have checked how my crypto portfolio reacted. And the answer is that it tanked 18% over two days before recovering somewhat to leave values where they were about a month ago, which is well down on the total invested to date.

So the “alternative investment” that is crypto reacted in exactly the same way as the mainstream equity markets, only more so. Not quite the diversifying / uncorrelated asset it is purported to be is it? Not that I am surprised, in crisis just about all assets react in the same way. This was clearly seen during the financial crisis.

The difference between mainstream equities and crypto is the ability to clearly see what is going on, who the runners and riders are etc. Being shrouded in mystery and opaque has many advantages for many investors, but none of them particularly wholesome. That context is often lost on mainstream investors who are generally attracted by the shiny bright lights of big returns and the ever changing narrative that keeps them in the game.

Today I added to both the Bitcoin and Ethereum holdings as per the revised strategy to add the same amount each month. I have bought many of the other 25 holdings three times already so won’t be adding to them regardless of price movements.



Much like the mainstream stock markets my crypto assets have recovered some of their value – they are now down only 10%. I bought some more Bitcoin and Ethereum, as I will each month. Out of the other 23 crypto assets I own, 19 have been bought three times and won’t be bought again. The other four were not bought this month. All but three of the holdings are worth less than I paid for them.

May will be 6 months since my first purchase. It seems clear to me I won’t be making a quick killing! No matter, that’s the nature of speculation.

Coming across the news wires in the last month has been plenty of stories about regulators looking closely at cryptocurrency. This was inevitable. Our own FCA has written to all financial advisers and planners reminding us of our “existing obligations when they are interacting with or exposed to cryptoassets and related services”. The FCA are rarely ahead of the curve, my intuition is that they are seeing things happening in IFA firms and getting twitchy. Expect more from the regulators.

An interesting article worth reading from Tilney arrived in my inbox, here is the link to it:

And here’s a link to Reuters’ article on the Bank Of England’s nascent attempts at a regulatory framework:



I can’t tell you how bored I now am of crypto. It has only taken six months. It is not a good thing to be bored of something like this. I see nothing new month to month, no way of discerning what might come next. Not when compared to the real economy at least, I have no feel or feeling about crypto assets.

In total my crypto assets are worth 30% less than I paid for them. This is dead money as far as I am concerned. I suspect the value will recover at some point but I have no idea when.

Despite my lack of enthusiasm I have stuck to my plan and added to Bitcoin and Ethereum as I said I would every month. I also added to another holding as it has now performed so badly I can buy it at 40% less than the previous purchase price.

I saw a couple of articles on crypto recently, here they are: and

You may or may not find them interesting.

See you next month.

Boring But Effective | Truthful, Helpful, Kind 

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