Although I started in the crypto space during late 2020, it was only a small 4 digit sum at the beginning. Just wetting my feet, exploring a new realm.
Since then, the capital deployed has ballooned to a sizable proportion of my entire investment portfolio. So I consider myself part of the crypto class of 2021 and yes, like what GMGH prophesized, tradfi bloggers like me entering the space pretty much marked the top of the cycle in the first half of 2021.
But honestly, entering at a top is somewhat expected.
“Because if the crypto market were tanking, you would just have patted yourself on the back for avoiding this ponzi.”
When I started deploying bigger amounts of capital in March to participate in reputable farms giving 3 digit APYs, I had fantasized that I would be up 50% half a year later. Yes, a get-rich-quick scheme.
But here I am, down 10% from my capital. Actually, when I started drafting this article one week ago, I was down closer to 25% which was probably more appropriate for the title of this article. But well, I am not complaining at the recent relief.
So here’s some insights after having to eat humble pie and saying HFSP to myself.
Stuck With Tradfi Lens
Thankfully, I did not make any major purchases at the picotop during the middle May. But still, looking at crypto coins with the typical tradfi lens almost got me rekt.
Because I bought heavily around the shoulders of the picotop, especially after a 20-30 percent drop in prices.
A 20 or even 30 percent drop is a big deal in tradfi. Just look at Chinese tech stocks in the past few days and the commotion it has caused.
However, in crypto, a long running meme is that a 95% decline is a 90% drop followed by a 50% drop. Personally, I have experienced that in a bad scenario, majors like BTC and ETH will drop 50%. And then for altcoins, they will drop 50% followed by another 50%.
So I was really too early catching these falling knives.
Smart Contract Risks are Real
I bought a little bit of $RUNE sometime in late May, thinking that the rout was over and at $13, it offered a good 35% discount to the ATH price of $20. #Onwards to $100
How wrong I was and the price continued to dump and effectively halved from my initial buy price by early July. Then, it suffered an exploit. A hacker found some weakness in the code and managed to drain funds from one of the pools in the protocol. Basically, shit hits the fan.
I patted myself on the bag for being patient and bought another bag at $4.80 after the exploit. Well, a crisis is an opportunity, right?
Less than a week later, there was another exploit within hours of the protocol’s restart and the price subsequently tanked to as low as $3. If someone had bought at the pico top, that is an 85% drop in 2 months. Pretty surreal.
I also have some eth pooled in Thorswap so fingers crossed that I can get most of it back.
Losses From Farming/Pooling
When I first started out farming on Binance Smart Chain on PancakeSwap and then on Polygon, I was absolutely captivated by 3 Digit APYs for entering a liquidity pool.
One such pool was the ALCX-ETH pool on SushiSwap, with an APR of 100%.
I entered the pool in late May when $ALCX was around $750, after a >50% drop from ATH price. I had mentally rationalised that the odds were super low for the token to drop another 50%. If not for the pool, it is likely I would not have owned any $ALCX.
As of now, the ETH side of the pool is down 30% while the $ALCX side is actually down around 70%. So that means I am hit with an Impermanent Loss of around 8% too for my trouble.
Of course, the high APR did help but not enough to offset the bulk of my losses thus far in the pool. I guess this is the equivalent of being a slaughtered yield pig in the crypto realm.
I hope the above did not scare you from the space since this is a survival game, not a get-rich-quick game.
But if you still believe crypto is likely to turn out to be a scam or you just cannot accept the price volatility, maybe it’s still best to stick with plain old vanilla stocks.
And so here I am shilling Moomoo for likely one last time, in case there are some interested readers who have not yet signed up.
I first wrote about Moomoo four months ago and lots of other credible bloggers have since jumped on the bandwagon. Moomoo have been giving out free Apple shares to every new sign-up for many months and the latest commitment is till 2nd August 2021. That is less than a week away.
I am not sure if they are extending the deal but sooner or later, the promotion is going to end. If you sign up today and deposit SGD 2,700 within the next few days, you will definitely be in time to enjoy this promotion. Many users have used the platform and enjoyed the benefits that come with literally no strings attached.
Thanks for reading.
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