The Increasing Significance of Crypto as part of my Personal Finances....

revisesociology (80)in LeoFinance • 3 years ago (edited)

I made my first crypto purchase in July 2017, just £200 of BTC when it was priced around the $4500 mark, and I've been buying in small amounts ever since, although not so much when it really was really mooning in late 2017.

At the time I was three years into an early retirement extreme drive, looking to quit work as a full time teacher, and crypto was just another asset class to diversify my portfolio. Another three years on I've quit that job, and I'm semi-retired and my crypto investments have played their part in this. NB I can't claim to have 'retired on crypto', but crypto has become an increasingly significant part of my wealth over the last three years, and I'm happy to keep it that way.

I've bought somewhere between £50 and £1000 of crypto practically every month or so since 2018, right up until this month, November 2020.

I tend to use Kraken as my buy in exchange as I can transfer fiat there for no fees, and if I want to buy something other than pure BTC I'll just buy LTC then transfer it to another exchange, buy BTC and then whatever I want.

Somebody will probably tell me there's a cheaper way to do this and I've wasted £100s of in unnecessary fees the last three years!

I'm not going to disclose the total amount of fiat I've invested in total, but it's in the several thousands of pounds, and I am comfortably in profit having nearly doubled my overall investment, largely thanks to the recent pumps to the BTC/ ETH and WLEO prices.

NB - this is my reponse to @theycallmedan's CryptoFinance challenge, right up my street!

Crypto's been my best performing asset class in recent years

With what I guess you can call a dollar cost averaging buy-in strategy my crypto assets have doubled in value in three years, which is pretty good in pure financial terms, compared to my other two main asset classes - my shares and property.

After that initial BTC purchase, I did buy some more during the summer and autumn of 2017 but I bought alts with most of the rest - and by April 2018 they'd lost 95% of their value compared to when I'd bought them, as outlined here, and that post also shows you some of the shit I bought!

I carried on buying crypto as it gradually went down in price in 2018, and by far my biggest purchase was Steem, having been bouyed by SteemFest 3 and then SteemFest 4, so I carried on buying, always expecting an upturn, but the price just carried on going down and down and down, at least I bought at the bottom, as this post shows you - I think that was the absolute Nadir with Steem at around $0.10.

Given the current Hive price all I can say is thank god for Justin Sun and the Hive fork - I managed to use that and the little post-fork pump to get half of my Steem converted into NOT HIVE but a mixture of

And no alts this time, well except a tiny bit of BAT and eventually RUNE

And from there I've, well, just held my BTC and ETH, DEC has done VERY well with the land pump, some of which I've sold for ETH, and WLEO has been my Hive saviour in terms of profitability - I bought a LOT of LEO with my Steem PD, and that's gone a long way to compensating for my having bought a fair bit of Steem/ Hive when it was a lot higher than $0.25!

I'm much happier being more diversified now. Before I was too all in on Steem/ Hive. I used to have mostly Steem, now I'm 30-30-30 BTC - HIVE - Others, or something around there. That's a very rough breakdown!

Using Hive and Leo as Compounding Income Generators

I make a decent amount of money out of blogging on Hive and Leo - I was a writer/ blogger before I discovered Steem (thanks to a chance encounter with an ex-neighbour in Sainsbury in August 2017) and so I've really just used it as a vehicle for what I'd already been writing about - early retirement stuff, sociology stuff, and increasingly crypto.

Hive and Leo are currently brining me in around $300 a month, even at these low prices, and that all gets powered up and compounded into more voting and curation rewards.

And my crypto earnings have been partially responsible for allowing me to quit my full time job and move to Portugal. Not entirely what I earn on Hive and Leo or course, but they've played a role! A crucial link in the chain, if you like.

I still make a lot more money from my regular blog than I do on Hive and Leo, but that's no where near as interesting and I really don't like how much my regular income is linked to Google and PayPal, I feel vulnerable there so it's nice to have the crypto-blogging as an alternative source of income.

Crypto has increased as ratio of my overall wealth and I'm happy with that.

At the beginning of 2018 Crypto made up less than 5% of my overall Total Net Wealth, the last time I reviewed this earlier in November 2020 it made up 45% of my Total Net Wealth.

This is mainly because I've sold a few thousand pounds worth of shares to fund me during Covid-19 because of lost income and to facilitate a move to Portugal, but shift in balance is mainly due to my Crypto assets gradually having risen in price over the last few months, which was always the plan!

I'm buying some land in Portugal soon, but I'm cashing in all my other asset classes before crypto.

This latest 2020 price run feels so much different to the 2017 hype-run - I just feel as if BTC has been more accepted, that ETH and Defi projects are offering returns on investments that banks used to, and with a decent amount of security, and that Dapp developments are getting to that point where they are useable by ordinary people - e.g. we're now at Splinterlands, NOT cryptokitties!

And this time I've got a proper diversified portfolio in a few coins!

Qualifier - Land/ Property as an asset class is as important to me as crypto

I don't want to exaggerate how important crypto is to me - I love the decentralised nature of it, but I also own a house and I am going to buy some land in Portugal soon - to me these work perfectly with crypto - giving me physical security and helping me keep my expenses down, or at least the land will, by allowing me to meet some of my food and energy needs.

How I see crypto going forwards.... Crypto and income earning potential

It sounds sad to say that I'm excited about the potential of yield farming through staking - Defi is not really that interesting, it's more 'boring but important' if you want financial security away from banking as usual, a decent return which compounds, then crypto offers opportunities better than banking.

In terms of blogging on Hive and LEO there will be declining potential for earning a living through blogging for most - eventually the rewards for posting will such up to the very best and the primary income for the majority will be through curation, which I'm thankfully pretty well set for.

As to whether I'm ever going to sell any of my crypto, I don't know!

Final thoughts

Echoing what @nathanmars said in his recent video on this tag: I can't see the point in chasing the moon - I need enough not millions of dollars, so I think the future for me on the blockchain is exploring the potential for crypto to help others.