Lazy Man and Money

Cryptocurrency Experiment – July 2021 Update

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If you read my article on dog sitting on Tuesday (or many of my other articles recently), you know I’ve been busy with dog sitting. I had been meaning to get an update out on my cryptocurrency investing for a few weeks now, but it’s been hard to put the time together. As luck would have it, I was able to put the time together just as the cryptocurrency market rebounded earlier this week.

I swear it was a coincidence. So in the interest of full disclosure, I was down around 20% in all my cryptocurrency purchases. It would have been much, much worse, but dollar-cost averaging has helped keep the percentage low (low in a relative sense). When I started investing Bitcoin was above $60,000, so about twice the price of what it was just last week. It’s hard to make money buying at the top.

I wrote about when I started buying bitcoin. I also bought some dogecoin, but it amounted to $22 worth in my kids’ Robinhood account. They’ve lost about $6, so it’s not a big deal.

Soon after buying Bitcoin, I bought Ether. I originally thought that all crypto was more or less the same, but it seems that different ones have different infrastructure to do different things. It also looked like Ether was the top coin going to switch to a system that is energy-friendly, which would give it an advantage over Bitcoin.

Below is a table that shows when and where I invested in Bitcoin and Ether. Since I’ve bought crypto many times, it’s a long table. The big thing to note is that I buy in lots of small transactions (usually $50, but sometimes $100) and that I almost always buy when there’s a drop and I can get more crypto for my dollar.

CoinDateAmountValueTransactionCoinPrice
BTC4/17/2021$50.000.00081635Buy$60,943.43
BTC4/18/2021$50.000.00090356Buy$55,061.05
BTC4/18/2021$0.008.967E-05Free$0.00
BTC4/22/2021$50.000.00094692Buy$52,540.02
BTC4/22/2021$50.000.00099871Buy$49,815.13
BTC5/13/2021$50.000.00102105Buy$48,725.17
BTC5/16/2021$50.000.00111111Buy$44,775.83
BTC5/18/2021$50.000.00122328Buy$40,670.15
BTC5/19/2021$100.000.00278012Buy$35,790.62
BTC5/23/2021$50.000.00146844Buy$33,880.12
BTC5/23/2021$50.000.00155946Buy$31,902.82
BTC5/29/2021$50.000.00144891Buy$34,336.83
BTC6/7/2021$50.000.00150995Buy$32,948.84
BTC6/21/2021$50.000.00152426Buy$32,639.40
BTC6/22/2021$50.000.00158529Buy$31,383.03
BTC6/22/2021$50.000.00168063Buy$29,602.67
BTC7/20/2021$50.000.00167383Buy$29,722.82
Total$884.50$850.000.022341544.06%$38,045.72
CoinDateAmountValueTransactionCoinPrice
ETH5/3/2021$50.000.0146626Buy$3,393.07
ETH5/18/2021$50.000.01598978Buy$3,111.44
ETH5/19/2021$50.000.0170301Buy$2,921.37
ETH5/19/2021$50.000.01893828Buy$2,627.02
ETH5/19/2021$50.000.02078337Buy$2,393.80
ETH5/19/2021$50.000.02294418Buy$2,168.36
ETH5/23/2021$50.000.02426996Buy$2,049.91
ETH5/23/2021$50.000.02539767Buy$1,958.89
ETH5/23/2021$50.000.02762223Buy$1,801.13
ETH6/21/2021$50.000.02580257Buy$1,928.15
ETH6/22/2021$50.000.02665997Buy$1,866.14
ETH6/22/2021$50.000.02859266Buy$1,740.00
ETH7/20/2021$50.000.02833601Buy$1,755.76
Total$702.12$650.000.297029388.02%$2,188.34
All Crypto$1,586.62$1,500.005.77%

At the end of each crypto in the table above, I have a percentage of gain/loss. So as I write this article (7/26), I’m up 4.06% in Bitcoin and 8.02% in Ether. That’s 5.77% overall. Crypto moves quickly. As I mentioned above, I was down probably 20% last week and even though I’m up now, I expect to be back down soon.

I don’t have any plans to add any new crypto types. That could change if I catch some news that gives me reason to invest differently. I also don’t expect to buy any new crypto soon. With the jump in crypto value over the last couple of days I don’t think it would be a good value to pay these prices. Of course, no one knows when the next drop/buying opportunity will happen, so maybe in a couple of weeks, I’ll be buying more.

The other thing that you can see is that I’ve invested $1500 so far. I didn’t expect to invest this much over a span of a couple of months, but the steady drop of price has created consistent buying opportunities. Bitcoin would have to drop to around $20,000 for me to invest as much over the next couple of months. Also, in the grand scheme of our net worth, $1500 isn’t a lot…

… and that’s the goal. This cryptocurrency experiment is intended to be a small part of our personal finance journey. By keeping it a limited percentage of our net worth and using time-tested methods like dollar-cost averaging, it won’t make or break any of our life’s plans.

Dollar Cost Averaging with Crypto Currencies

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Last month I wrote about how I gambled on Bitcoin and Dogecoin. Yep, I bought Bitcoin ten years (too late) after writing about it in 2011.

It was a painful click, but I finally owned a tiny fraction of a single bitcoin. I was only investing $50 and a whole bitcoin would have set me back more than $60,000.

Anyone could have guessed what would have happened since I opened up that Pandora’s Box. Bitcoin dropped. Then it dropped some more. Then it dropped more. I’m writing this on May 23rd and it dropped to around $31,500 a bitcoin today. That’s close enough to half of what I paid – or essentially losing half of my money. Of course, since it was $50, I wasn’t losing much sleep over it…

… quite the opposite actually. I was rooting for it to go lower and lower so I could get buy a high fraction of bitcoin with my money.

Dollar Cost Averaging with Crypto

Most intermediate investors are familiar with the concept of Dollar-Cost Averaging (DCA) for crypto day trading. The general idea is to invest at various intervals which reduces the volatility of the overall investment.

That might sound confusing to some people so let me give you an example of how I’ve been buying crypto over the last month. (I use the word “investing” when I buy crypto, but others may substitute the word “gamble.” Despite how we may characterize the action, it is simply “buying crypto.”)

Here’s my spreadspeet with all my buys (I haven’t sold anything yet):

crypto investing

(click the image for the full-size view in a new tab)

There’s a lot going on in this here. I have invested in two coins bitcoin and ether. (The Dogecoin that I invested in before was in my kids’ account and it was about $22 – I’m not counting it here.) I think most of the columns make sense. The CoinPrice(EST) is simply the amount I invested by the amount I bought minus any commission to Coinbase. The regular CoinPrice is what Coinbase reports the price at the time of the transaction. The only reason they are different is the rounding issue of buying small fractions of a bitcoin.

  • There is one bitcoin transaction that’s listed as “Free.” Coinbase gives you $5 in bitcoin for free for signing up.
  • The bright green price is 10% off the last time I bought. That’s a rough target for when I should consider buying more on the dip.
  • There’s a little pie chart that give me a quick visual of which coins comprise my crypto portfolio. Different coins have different strengths and weaknesses, but that’s a topic for a different article.
  • The Total line for each coin makes sense until you get to the CoinPrice(EST). The price there is the current price of the coin using the Google Finance function of ‘=GOOGLEFINANCE(“CURRENCY:BTCUSD”)’. The column after that is the percentage of gain/loss. The column after that is my overall cost basis (which we’ll get to later).
  • The next column on the total’s line is the cost basis divided by my first purchase. This is an important number because it shows how useful dollar cost averaging has been. There’s a big difference between having a cost basis of $60K and $42K to use my bitcoin numbers as an example.
  • There’s a column of “52-week high” which could be confusing as well. Basically, I searched for what the 52-week high of the coin was. The dollar figure represents how much money I’d make if it goes back to that high. With stocks this almost always happens over time – especially with a diversified index. With crypto, no one knows. If you look at the bright blue row on the bottom it shows that I could make 65% IF (and it’s a huge IF) the coins get back to their highs.

You can grab this Google Sheet to use for yourself if you want. You’ll want to fill it with your own data of course. You’ll also have to add the pie chart yourself as that doesn’t seem to copy over.

As it stands now, I’ve lost 9.25% on all my crypto. That’s not great. You can buy in today and be in a better position than I am. However, I’m in a much better position than I would have been if I invested $1000 on April 17th. As you can tell from the prices of my purchases, crypto is very volatile. After I initially bought Ether it just to over $4000. At that point, I didn’t know if I was ever going to buy Ether again.

I feel this is a good plan for buying on dips. That’s great for accumulating crypto. The piece I’m missing is when to sell. I would like to hold for a year to save on capital gains. However, that’s a very, very long time in the crypto world. It’s hard to know if it’s going to twice as much or half as much. If you have any thoughts I’d love to read them in the comments.

If you are interested in getting started in crypto, I suggest signing up with Coinbase. They’ll give you a few dollars-worth of crypto currency and I’ll get a little money for referring you.

I Gambled on Bitcoin and Dogecoin

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Note: Today’s article is going to be a quick one. I had hoped to publish earlier this week, but the week hasn’t been going great. I was doing well for the first 24 days of the 35 days of my wife’s deployment. This last third seems to be the toughest.

Getting back to the topic…

Yes, I finally took the plunge. I own Bitcoin and Dogecoin. I know, I should have probably bought Ethereum before Dogecoin. I’m new at this, so I’m going to make mistakes.

One of my biggest regrets in life was not buying Bitcoin in 2011 when I wrote about it. Or maybe I should have bought them in 2013 when I wrote that they weren’t going away. Or maybe I should have bought some in 2015 when I wrote about it then.

I haven’t written about Bitcoin much since then, because it hurts to have missed the train before the bull run. Well now that I’m on the train, expect it to come to a complete stop. In fact, that’s almost what immediately when I bought it. It dropped 10% right away. Same with Dogecoin. This kind of stuff happens with crypto-currency.

The toughest thing about Bitcoin is getting started. I didn’t know where to buy it. My Robinhood account is the kids’ money, so I couldn’t do it there. I kept looking into Paypal, but their fee structure incentivizes you buy over $1000 at one time. I just wanted to dabble with some small amounts and dollar cost average if it drops.

Enter Coinbase.

With Coinbase going public recently, it got my attention. I decided to sign up and see how it worked. Big tip: Coinbase Pro has much lower fees and I found it very easy to use. I guess if you are a beginner, regular Coinbase is the way to go. I suspect most of the readers here though can figure out Coinbase Pro and save on some fees.

Here’s a video about how it works:


And you can sign up by clicking here:

That’s my affiliate link, which means that I get a little money if you sign up. I was shocked at how quick and easy it was to sign. They connected to my bank account to verify it with Plaid right away. I was buying Bitcoin in about 5 minutes.

The fees for Coinbase Pro are a flat 0.5%. That’s actually pretty good with Bitcoin it seems. I’ve bought in 4 times at $50 each. As I said, it’s not a lot of money, but maybe it adds up over years. Or if drops in half (as it has been known to do sometimes), I can deploy a few hundred dollars to buy it much lower.

So far, I’ve bought at $61K, $55K, $52.5K, and $49.8K. So my average is around $53.2K. As I write this, I’ve made about $4. I won’t be buying a summer retirement house with that kind of money.

Remember that Robinhood account? The kids had around $22 in dividends that paid out last quarter. Coinbase Pro doesn’t support dogecoin, but Robinhood does. My kids have 64 dogecoins. I bought pretty close to the high at 35 cents a coin. I think I’ve lost about $3 or $4 dollars. I hope they’ll forgive me when they are older – I have made them a few thousand dollars by investing.

That’s all I have for today. Do you have Bitcoin? Are you buying any?

Gold vs. Bitcoin – Who You Got?

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I saw that Miranda from Planting Money Seeds wrote about how gold was killing her investment portfolio. I had a little chuckle because years ago I asked if gold is just yellow metal. I think I’m in a minority who just don’t understand the value of gold.

I really hadn’t thought about gold as investment in quite some time. However in thinking about it now, I realized a good way to explain how I feel.

Hello bitcoin! (… and any other cryptocurrency out there)

It seems like a majority of people I talk to laugh at bitcoin. Some even call it a Ponzi scheme waiting to collapse. I don’t have a single friend who owns a single bitcoin… or even a fraction of one.

I think it is safe to say that if I were to support bitcoin, I’d be in the minority.

The strange thing to me is that bitcoin and gold are very similar.

Bitcoin has no intrinsic value. Gold, while being an awesome semiconductor, has very little intrinsic value. If both disappeared from the Earth tomorrow you could go about your day with almost no change. That’s different than if oil or corn disappeared.

Bitcoin and gold only have value because we agree they have value. We’ve agreed that gold has had value for a long time in a historical sense. However, it seems that the world is moving away from that agreement and more towards digital representations of wealth. For example, I don’t see too many people asking for stock certificates nowadays… instead we simply press a button on a website to buy and sell.

Doesn’t a digital representation of wealth sound a lot like bitcoin to you? It does to me. The problem is that we haven’t agreed that bitcoin has value for very long. We also seem to change our view of what that value is quite a lot. Then there’s the pesky problem of wealth just getting deleted with a company goes under (it has happened a couple of times).

There’s a lot wrong with bitcoin, but Silicon Valley is pouring billions of dollars into companies to build up the infrastructure. If I had to buy one and hold it, I think I’d go with bitcoin. (Again, I thin I’m in the minority here.)

What about you?

Remember BitCoins? They Aren’t Going Away.

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Have you heard of Bitcoins? They are a form of digital currency that have made the news here and there, but hasn’t gone mainstream. However, that might be about to change.

If you aren’t familiar with them, here’s a brief introduction:

In June 2011, I wrote, Bitcoins: The Future of Money or End of the World? There’s no question that there is a brilliant design behind Bitcoins. In fact, the design is so brilliant that despite a few obvious problems, (ahem, liquidity), I couldn’t dismiss them. They truly could be the future of money.

If you read that article and bought some Bitcoins, you could sell them today for a nice profit. However, you would have gone on a roller-coaster ride watching about 80% of your investment disappear along the way. I like to judiciously speculate and even I can’t convince myself to buy them. I tried to the other day, but after they nearly doubled in a few short days due to this Cypress mess, I couldn’t pull the trigger. (Of course, I also like to buy things at a discount, so this sudden raise in rates made it the opposite of the “bargain” that I look for.)

Yesterday Expensify announced that they are officially taking Bitcoin as a reimbursement option for expense reports. This is kind of a big deal, because as corporations start to acknowledge Bitcoins, they become a more legitimate form of currency. So despite what Bloomberg said a week ago about it not being a currency, I wouldn’t bet against it.

I talked with CEO David Barrett of Expensify about their adoption of Bitcoin and why they’ve chosen to support it. If I was a real reporter, you’d probably see a quote here. Instead I’ll just paraphrase how it went, using my own interpretation (not David’s). Reimbursement via direct deposit is great because it only costs Expensify a few cents in transaction fees. Reimbursement to other accounts, such as Paypal are really tough, because Paypal fees eat up 3-5% of the reimbursement. As Expensify deals with more international clients, they have a need for a payment system that A) can meet their needs of servicing many countries and B) can keep the fees low. Bitcoin fits with exactly what Expensify is looking for.

I think many other companies will feel the same. That’s one of the big benefits of Bitcoin. However, again the downside was support for Bitcoin. I asked Barrett about that and he was quick to point out that while Expensify is clearly an early adopter, the path for Bitcoin’s legitimacy is already paved. Companies like CoinLab have been attracting venture capital funding in it’s quest to provide support tools for Bitcoins. Silicon Valley Bank will be holding Bitcoins for CoinLab.

So now it’s time for me to ask the readers? Is it time to start putting some of your money in this extremely speculative currency that may be where the future is going? Let me know if the comments.

[Final Thought that Maybe Only I Find Interesting: I didn’t realize when I was talking with David Barrett that he was the CEO of Expensify. It wasn’t until I read this this article on the Verge (which has the real quote from Barrett) that I learned it. Someone less professional than I would probably do Xander’s imitation of the Snoopy Dance at getting the same level of access to the story as the Verge. Someone more professional than I would probably have not mentioned this…]