You need to know our trust and friendship were on the line.
Three years ago, I told some friends they needed to invest in Bitcoin. I told them I was invested in this volatile asset. Many never heard of Bitcoin so there were times I had to educate them on what Bitcoin was.
Bitcoin was a relatively new currency that many never heard of. This was also fairly new to me as well.
First of all, the government had not made it definite that cryptocurrencies were a security so I still had to be careful about what I said. The SEC was in discussion about what was and was not a security among cryptocurrencies.
Anything that is labeled a security would be treated like a stock or an investment. I had my understanding of this and didn’t want to get myself in trouble telling people to invest in Bitcoin. I am still careful about that today.
Second, I started a cryptocurrency meetup group so I could learn more about cryptocurrencies. Life any new topic, there was a lot to learn. I eventually found out the more I learned, there was more that I didn’t know.
In my cryptocurrency articles, I tell readers what I am doing and don’t encourage others to copy me. I always let others know to do their own research.
In 2018, I was confident that Bitcoin was going higher despite the crash that saw Bitcoin trade in the low $3,000s. When I told my friends to buy, Bitcoin was around $15,000. It was probably to a low of $12,000 around that time.
Even at $12,000, Bitcoin was not a cheap investment. This was a lot of money for some people to risk investing. I had faith that Bitcoin was going to go up. Since I was still relatively new to cryptocurrencies, I didn’t understand the Bitcoin cycle.
Every four years, Bitcoin does a halving. This is when the mining reward for Bitcoin is cut in half. Bitcoin miners would see their reward to mine Bitcoin drop.
When Bitcoin goes through its halving, this causes the price of Bitcoin to increase. The Bitcoin halving occurred in November 2013, July 2016, and recently May 2020. After the halving, you see the price of Bitcoin go higher and higher with sporadic dips as people take their profits.
After Bitcoin rose to its previous high in December 2017, I was telling a few people about this cryptocurrency. These are the three things I risked when I told my friends about Bitcoin you should know. The asset was very volatile and actually traded faster than penny stocks which is hard to imagine.
1. I risked my credibility telling my friends to invest in Bitcoin
If Bitcoin crashed, I was risking my trust and credibility with my friends. Losing one’s trust is hard to get back if you ever can. Trust takes time to gain and earn.
Once you lose someone’s trust, you may never get it back again.
If Bitcoin crashed, my friends would lose their money. If Bitcoin didn’t recover, could you look at your friend’s face again as they lost money? They listened to your information about Bitcoin and copied what you did.
I was careful to tell my friends not to buy Bitcoin with money they used for their personal needs. Money they need to keep a roof over their head and food on the table. Too many people lost a lot of money after the last Bitcoin bull run in 2017.
2. I could have lost their friendship forever
One time a friend mentioned that Bitcoin was down from where he bought it. He had lost several thousand by this point. I had to tell him to have faith - Bitcoin would recover.
I was hoping and praying that the price would go up so I wouldn’t lose the friendship we established. Some friends I had known for a few years while others I had known for about 10 to 20 years. That is a long time for others to put their trust in me.
Trust is easy to gain but hard to get back once you lost it.
I had recommended to another friend years before to buy a penny stock. The stock was doing well and he had seen the product in grocery stores. I was sure the stock was only going to go up.
After a few months, the stock stopped marketing. I saw the price of the stock go down until it was finally delisted.
I was embarrassed. I had a hard time contacting my friend after this happened.
With Bitcoin, I wanted to make sure I wouldn’t see the same thing happen again with my friends. I really had to know what I was talking about to avoid embarrassing myself again.
3. I worried when the price crashed but still had faith in Bitcoin
Since I started investing in cryptocurrencies, I made a point to understand the market as best as I could. I’m not a techie or computer programmer so I don’t understand everything. I understand the investing part a lot better.
When Bitcoin crashed and then continued to crash from $18,000 to the low $3,000s, I figured that Bitcoin would rebound. The only question was when?
Judging by the past history of Bitcoin, I figured the price would increase right after the halving. Since it’s a few months after the last halving this year, Bitcoin reached a new all-time high.
My fear and worries went away. Friendships I had were still intact. At this point, I don’t encourage people to buy Bitcoin. This is a personal choice between you and your money.
I do explain what is Bitcoin as well as cryptocurrencies. As for personally buying Bitcoin, that is a personal choice.
Have you invested in Bitcoin or cryptocurrencies?