bitcoin the currency of the 21st century
it's captured the imagination of
governments businesses and entrepreneurs
promising a new era of financial
exchange but in its short history it's
already experienced
several bubbles and crashes the bubble
that i fell prey to started in 2017 when
prices rose from 975 dollars in march
to nearly 20 000 at the start of
december but then on 22nd december 2017
bitcoin lost a third of its value in
just 24 hours falling below 14
000 by february 2018 the price had
dropped another 50
in just 16 days falling back below 7
000. like an absolute idiot i poured
most of my savings
into bitcoin during the 2017 bubble by
the end of that year i'd invested
88 000 into bitcoin and within a few
weeks
i'd lost over 55 000 of it this was a
pretty
interesting time for me in my life i was
preparing for my final year medical
school exams at cambridge university i
was doing this youtube stuff on the side
and i was watching around 90 of the
savings that i'd built up through five
years of running a business in med
school i was watching those like go up
in flames anyway i am now totally
overrated genuinely 100 over it
um i don't think about it when i'm lying
in bed at night and in the shower
i don't think about it at all 100 over
it uh but in this video i want to share
the five
lessons that i've taken away from this
experience of losing the bulk of my life
savings by trying to invest in bitcoin
and hopefully you'll find those useful
cryptos rallying rallying these days a
lot of my friends all my audience
audience equals friends um a lot of
people i know are getting into crypto
these days and i want you to learn from
my experience from a few years ago
so let's start with lesson number one so
the first lesson is that the first rule
of investing is to not lose money this
is something warren buffett talks about
it's something that every investor
in the world talks about when you're
actually investing stuff
rule number one don't lose money by not
losing money you're already doing better
than a lot of people who are trying to
do this investment stuff including me
and i remember there was a moment in
late 2017 where
by that point i'd put in around 50 000
into bitcoin and my portfolio was worth
around like 90 000. so i had a gain of
40
000 and you know me and all my friends
were into crypto and we were like
exchanging screenshots of our portfolios
and stuff and people like oh my god
you've literally made forty thousand
dollars or
thirty two thousand pounds um why don't
you just take the money out now thirty
two thousand pounds is like a whole
year's salary for being a doctor in the
uk's national health service
and i'd made that on bitcoin and i
didn't take the money out
and the reason i didn't take the money
out was because i was like oh bitcoin's
going to go to the moon and all that
kind of stuff
what the prudent thing to have done in
that context was that
i should have set a stop loss which
means that if my portfolio had dipped
below the amount that i put in i would
immediately sell
because the first rule of investing is
to not lose money people might disagree
with it you might say that oh you're
supposed to have diamond hands and you
just like huddle and just hold on and
hope for the best over time that that
sort of stuff
but i think when it comes to a kind of
speculative investment
like bitcoin which is basically just
gambling as i'm going to talk about in a
moment
i think when it comes to those sorts of
investments it's totally okay to play
with house money
i.e once you've kind of recouped your
original investment
everything else is just you're playing
with the gains you made from that
investment and then you can go wild and
do whatever the hell you want with it
but i think for me that was like a
crucial point in my financial journey
where i basically crippled myself
financially by not like keeping in mind
rule number one of investing which is
you're not supposed to lose money lesson
number two that i've learned is when it
comes to this sort of stuff when it
comes to
to be honest investing in anything do
not play with money that you might need
in the next five years
so i was a stupid idiot in that i put
all my savings into bitcoin
i knew full well that at some point in
that next one to two year period i
wanted to try and get on the property
ladder and i wanted to try and buy a
house and in fact this is the flat that
i'm now living in and because all my
money was in bitcoin
when it came to needing to buy this this
apartment
i had to realize the loss i had to take
out around like
30 000 40 000 from bitcoin to be able to
afford
the deposit on this house and i was an
idiot because the money i put into
bitcoin
i knew that i was playing with money
that i i would need in the next five
years
if i'd been playing with money that i
could 100 afford to lose that i wouldn't
need maybe like 5k 10k or whatever
because
that's more than i needed for the
deposit then it would have been fine it
would have been
a less bad thing to do but i was playing
with
money that i needed and so again this is
just a standard rule of investing if
you're investing in anything you know
real estate the stock market
bitcoin crypto dogecoin whatever you
want to invest in then obviously before
you do any of that you want to have like
a six month
kind of emergency fund where in a
savings account or in a current account
somewhere
you literally have in cash six months
worth of savings that can help sustain
your lifestyle if something bad were to
happen like if you lose your job and
then once you've done that you put aside
any money that you might need in the
next five years sometimes
people even say 10 years you know if you
need to buy a car or a house or pay for
a wedding further down the line
you don't want to put that money that
you need for that thing into the
investment because
theoretically over the long term
everything goes up and i still stand by
that with crypto and stocks and real
estate and everything
but if it just so happens that you need
the money
at a time where the market is low it
means you have to take the money out of
the market and then that is very bad
because then you do what i do and you
realize the loss of several tens of
thousands of dollars because you need
that bitcoin to literally buy by real
estate lesson number three that i've
learned is
don't be emotional now i used to think
that i was i was a pretty rational kind
of guy you know i'm pretty logical
and you know i consider myself to be
somewhat intelligent i was like hey i
got into cambridge i must not be a
dumbass and yet
when it came to bitcoin i became
emotional
and i became emotional like and i i
thought it was logic that was driving my
decisions because
you know imagine you know the price was
at like sort of four thousand dollars
and i i bought some and then the price
went up to eight thousand and i bought
some more and then the price went up to
twelve thousand and i bought a bit more
and then the price was sixteen thousand
i'm like oh my god
you know i need to get in on this i
don't want to miss the train this huge
sense of fomo bitcoin is going to the
moon oh my god
maybe bitcoin's going to go to 100k and
if i buy in right now at 16k then it'll
it'll keep going up and then my friends
were like oh my god
oh yes i've just bought some now just
bought some now coinbase is crashing
right left and center trades aren't
really going through and it was a very
kind of
emotionally tumultuous time that i only
realized after the fact
at the time i thought hey i'm a logical
rational person i'm making logical
rational decisions with my money to
invest in
or to gamble with with bitcoin in this
way and so the thing that i've learned
after this experience is that
you want to have a plan and you want to
stick to the plan uh
with some like contingencies in the plan
but preferably by removing
as much emotion from the decisions as
possible and one way that i think about
this now is that like when it comes to
me putting money in bitcoin i genuinely
think to myself
that i the the thing i tell myself is
that i'm basically
setting fire to that money because if i
have that attitude of
by putting money into bitcoin i'm
literally setting fire to it that money
like i've now lost that money
it means that i can kind of in a way
model what it would feel like to lose
all that money and because
these days i only put money into crypto
that i can 100 afford to lose
it means i don't go too overboard in
being like oh you know bitcoins going up
elon musk invested tesla's invested
bitcoin oh my god i need to buy more and
more and more
so i've got these rules that i've set
for myself to
try and combat the emotionality of it
i've also subscribed to this newsletter
called crypto is easy and i've been
following that guy's advice and
basically just using his plan because
his plan is pretty good i'm like great
this guy's done the research i'm going
to follow the plan i have faith in it
and i'm not going to bring my own
emotionality into investment decisions
lesson number four that i've learned is
that
short-term trading is gambling long-term
trading
is like is is investing so i think if
you
invest in in crypto right now with a
view to not touch it to have diamond
hands to hold on for dear life
for the next 10 years then it's fair to
call that an investment
but if you do what i was doing in 2017
and what a lot of my friends
now do which is that you know i'll look
at the price of bitcoin
i'll like buy some now then i'll hope
i'll look at like the indicators and
stuff and then i'll sell maybe tomorrow
and then i'll be tracking the price on
my phone and then when i need to i'll
have a buy order and a limit order and
all this stuff and i'm gonna buy
like this kind of day trading mentality
i think this is basically just gambling
like
you know there is almost no way that us
as individual like
non-professional investors trying to
time the market
by doing all this bs around like looking
at all these different indicators be
like oh the 162-day moving average has
dropped below the 248-day moving average
therefore i'm going to buy some bitcoin
right now and then oh you know if we
look at the ratio of like
pi divided by e multiplied by the
position of mars in the sky
that means i'm going to sell bitcoin
tomorrow that basically what me and a
lot of my friends were doing back in
2017
and what i now know a lot of people are
doing today and i don't know anyone
personally who has consistently made
money from that strategy
this is a video about bitcoin in the
comments below there's going to be a
ton of scammers being like
oh my god i never knew i could trade
crypto until i started trading with mrs
john smith and mrs john smith
whatsapp number plus six blah blah blah
blah blah blah mrs john smith's crypto
trading
strategies are amazing and then these
guys have a ton of like bots and fake
youtube accounts where they're
commenting on one another's posts
being like oh my god mrs john smith's
trading strategies are amazing and i've
had dms from people who have fallen for
that particular scam
thinking oh my god i'm going to follow
this strategy you know it involves day
trading and mrs johnson
strategy and oh just transfer bitcoin to
this particular address basically
the way i think about it now is that
maybe if you're an institutional
investor maybe if you're a big company
like
jane street that does like high
frequency algorithmic trading
maybe in that context you can do like
day trading but for most
most of us most of us watching this
video monitoring the 162-day moving
average and figuring out when to buy and
when to sell and all that kind of crap
that was a big part of how i lost so
much money back in 2017 because i was
trying to day trade whereas now the way
i approach crypto is i'm just gonna buy
and i'm just gonna hold
and i'm gonna have diamond hands and i'm
only buying crypto with money that i can
100 afford to lose
and i have no intention of selling it in
the short term and finally the ultimate
lesson that i've learned i don't know
where i came across this i think
a friend told it to me which is that
when it comes to crypto um
when you think you're gonna be rich you
should sell
and when you're uh when you've lost so
much money that you're vomiting
that's when you should buy and i i often
think back to that i think if i'd
followed that strategy like
when bitcoin was going up and up and up
and it was around sixteen thousand
twenty thousand
i was thinking oh my god i'm going to be
rich that's the point where i should
have sold and
when i was literally vomiting because i
wasn't literally vomiting when i was
figuratively
vomiting because i lost so much money
that would been that would have been the
time to double down and
and buy even more uh potentially
potentially one way of thinking about it
i don't know uh i don't know if i'm
actually gonna do that moving forward
what i'm actually gonna do moving
forward is that i still do buy bitcoin
i buy bitcoin ethereum and cordano these
days
on a weekly basis with a standing
recurring order
and i've just kind of set it and i'm
going to forget about it and i'm not
going to really touch it hopefully for
the next five years at least
and i'm hoping five years from now i can
make a youtube video either saying oh my
god guys you know
holding for the last five years has been
amazing or oh well guys i lost all my
money but it's fine because i was only
playing with money that i could afford
to lose so cautionary tell from me
please don't be emotional about
investing decisions please invest for
the long run please have diamond hands
and hold on for dear life and don't
try and day trade gamble your way into
getting rich this is not a
get-rich-quick scheme
this could potentially be a viable
long-term investment opportunity
and if you want to find out more about
exactly how bitcoin works i have a
comprehensive video over here that
explains the fundamentals of bitcoin if
you want to actually want to get into it
thank you so much for watching have a
great day and i'll see you in the next
video bye-bye