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Lost $300,000 staking cryptocurrencies for higher returns.

Wednesday, August 3, 2022

Someone left me a comment and requested that it not be published.

Apparently, he lost quite a bit of money in cryptocurrencies.

He said that he used to follow my blog but found new ways of "investing" his money which he thought could generate wealth more quickly.

Things did not turn out well for him, unfortunately.

He said he should have heeded my advice on not getting into cryptocurrency which I said was like buying nothing with something.

(Eh, did I say that?)

He was surprised to read that I own some Bitcoin now but understood why I changed my mind.




For those who don't know or don't remember, read:

1. Gold, silver and Bitcoin as insurance.

2. Buy Bitcoin at long term support.

He shared that he lost big time on Luna and even on his Bitcoin and Ethereum which he staked for much higher returns than the interest income he could get from our local banks.

Apparently, some of the crypto lending platforms where he staked his coins became insolvent recently.

The comment made for very sad reading but I suppose the reader just needed an outlet.




Something I used to blog about pretty frequently was the subject of fraud.

When something sounds too good to be true, it probably is.

Before investing our money for income, it is important to make sure that it is a bona fide income generating asset.

This is especially true if it promises what seems like an incredibly high return.

Some past blogs which might be interesting especially to newer readers:

1. 24% yield in 24 months?

2. Investment with 6% a month return?

3. $71,000 lost in bogus investment?

4. EcoHouse: Questions we must ask.

5. Is Eagle Hospitality Trust worth it?




For something to promise a return of 20% per annum, it has to be generating a much higher return than that in order to be bona fide.

How likely is that?

If a return of higher than 20% per annum is bona fide, then, the next question to ask is whether that is sustainable?

For examples:

1. 14% ROI per annum?

2. Buy a bond fund that pays 7% per annum?

Remember, bloggers are just regular folks like you and me.

Don't read blogs thinking that they are always right.

I must say this because the person who left the comment said he was mostly influenced by blogs and YouTube videos to put more and more money in cryptocurrencies. 

When I did a search on staking cryptocurrencies, for example, I saw many "experts" telling people how to do it to become rich, focusing only on the high returns but not the high risk.

I have said before that bloggers (and now YouTubers too) who tell people that cryptocurrencies are investments are confused and they are confusing other people.




Cryptocurrencies might be digital assets but to put money in them thinking they would grow our wealth quickly is more speculating than investing.

We can invest in blockchain technology but not cryptocurrencies.

History doesn't repeat but it rhymes.

Anyway, after reading that comment, for many reasons, I just feel that a blog like this is necessary.

I suppose I also need an outlet after all that negativity in the reader's comment.

Thank goodness I have ASSI.

References:

1. 2Q 2022 passive income: Stronger.

2. My final word on cryptocurrencies.

Recently published:
Our CPF money is not our money?

You might want to watch or listen to this video:




6 comments:

keng said...

This is a greater fool's game. If one is playing it, just make sure one is able to sell to the next greater fool.

You can play the game, but the music always tend to stop at the most unexpected moment.

AK71 said...

Hi Keng,

I don't know why but your comment sounds rather evil there. ;p

I rather not play the game at all, to be honest.

Peace of mind is priceless and not selling something to a greater fool than me makes me feel better about myself too. LOL.

ThinkNotLeft said...

I did not buy any crypto, as I find that I do not understand it. E.g. why coins like Luna can be linked to another coin and hence are stable? (turns out not stable.)

There are arguments for Bitcoin e.g. Bill Miller argue that bitcoins are insurance. E.g. if you live in unstable country where the govt can confiscate one's assets, bitcoins is an asset where the govt can never touch.

Maybe bitcoins make sense (as insurance) for super-rich (but not for average person like me).

AK71 said...

Hi TNL,

Yes, it is probably better to avoid putting money in things we don't understand if we want to be able to sleep well at night. :)

It took me quite a lot of research, time and thinking before deciding to get a tiny exposure to Bitcoin and it is all from the perspective of insurance against fiat currencies.

The whole idea of staking cryptocurrencies in order to earn substantially higher interest income than what the banks could pay didn't make sense to me and, fortunately, I didn't go down that path.

I have said a lot in this blog on why it didn't seem like a good idea to me and, so, I shan't say more in case some people think I am gloating.

SgFire said...

Ocbc huat

AK71 said...

Hi SgFire,

Happiness! :D


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