Why T&T crypto investors need a strong pull-out game…

I got into crypto in 2017. And no, I did not get rich . I would consider myself a somewhat early adopter for the Caribbean but the beginning of cryptocurrency ‘as we know it’ goes back to 2009. Since then, the price of one Bitcoin (BTC) has moved from roughly $0.0008 in 2010 to a high of $63,729.5 in 2021. That means that if you had invested $100 USD all the way back then you would now be worth over $70 million.

That of course, is a very simple way of looking at things. The technology that underlies Bitcoin and other cryptocurrencies (Blockchain), has been nothing short of revolutionary. Bitcoin, in its gentlest sense, is a reward provided to a computer for helping record a new transaction. You can earn them by letting your computer run special software (to record transactions) or you can can buy it on exchanges (For e.g. Binance, Coinbase,Changelly).

The dollar value of this ‘work’ done by the computer is subjective, however the idea that you no longer require a trusted intermediary such as a bank or Western Union etc. to transfer funds from A to B is downright remarkable . No more $100 daily limits to USD purchases at the bank, no more high transfer fees, no more tedious bureaucracy in getting funds to friends and family abroad. All you need is a computer or mobile device, an Internet connection and the right software (crypto wallet).

This technology when I first bought in (BTC,ETH) seemed a bit confusing and far fetched as a rival to traditional banking. What’s more, it was impossible for me to sign up for an account due to my nationality on exchanges such as Coinbase.

After much research, I was finally able to create an account on Binance but there was no way to put money onto it. I did as I suspect many Trinis do, wired the funds to a friend of mine abroad, they purchased the crypto on my behalf and then transferred the currency back to me on my wallet.

In November 2017, I put $500USD ($3500TT)in when Ethereum was valued at $472USD , Bitcoin $12,230, Cardano $0.0019. The sad part is that I had been trying to buy in since September. However the major exchanges had lots of restrictions, I couldn’t get the USD and I did not have a credit card (Prices had gone up roughly 10x in the meanwhile). Prices peaked in December.

Some news about China banning cryptocurrency and other negative sentiment brought prices crashing down and basically gave me my first lesson in cryptocurrency. If you are going to buy into something that is a non producing or interest bearing asset, the odds are quite high that you will lose your money.

Fast forward four long years of volatility, far lower prices than I expected and feeling like a sucker for having bought into something Warren Buffett described as “rat poison squared”. When the most recent bull market got started I could not wait to at least reclaim my initial investment. Prices climbed and climbed and once they were about 25% more than I initially bought, I sold.

Prices as you may be aware rose more than 25%. Ethereum just crossed $4000USD and Bitcoin hit $63,000 earlier this year. Up till now, I am flabbergasted. If I could have merely remained still I might not have had to come up with an exit strategy. It has been an overall puzzling experience and a lesson in knowing what you are paying for.

Binance CryptoCurrency Exchange

As I finished the final chapter in my career as a cryptocurrency investor. I remembered that I had completely forgotten about my Cardano (ADA). Problems with logging in to Binance (2018–2019) due to a lost password and bad customer service left me considering my funds as lost. Early February, I tried one more time. Their interface since 2019 was much improved, security and facial scanning software got me back my account. Cardano was now valued at $0.34USD. I did not bet the house on it in 2017 but I had made a pretty good return on funds that I thought were lost.

This time around with values skyrocketing, having made a few hundred percent on my initial investment, I did what any rational person would do. Buy more. The problem though, is that this feels like chasing the wind or maybe like paying full price to get into a Carnival fete an hour before the end. Should I buy Doge? Will Bitcoin hit a million? Why didn’t I buy more back in 2017?

Wishing I had bought more crypto earlier may not have an official psychological diagnosis. However, it does feel like some sort of PTSD. That said, there is one thing that I am certain of. And it’s that many techies are kept up at night thinking about the exact same thing. The gains they could have had if they had gotten in earlier or didn’t sell so soon.

To the Trini investor, my advice; Beware! I recently did an experiment to see what it might cost me to get a couple thousand dollars out of my crypto wallet and into my bank account. Would there be any blocks to withdrawing my funds? What would the gas fees (Ethereum network) be like? Would I be able to withdraw funds to Paypal or a local bank?

I would recommend that before you buy yourself any crypto, ensure that you know someone who has a foreign account. That their bank accepts funds from the major crypto exchanges. Ensure that you trust them. And depending on the size of the transaction, make sure they would be able to withdraw the funds and then wire them to you (another 5% at least). I did not even bother requesting that my trusted person use Paypal (They took almost 25% out of a previous transaction).

The conclusion being that if your crypto appreciates by anything less than 10% (5% gas fees + 5% wire fees) you would be exactly where you started. Additionally, if you purchased funds via credit cards (now possible on the Binance Exchange), you would have to pay interest if you don’t repay the funds on time. This means possibly another 25%. So in concrete terms if you were to buy for example $1000 USD of Ethereum ($3500 at the time of writing). It’s value would have to increase to $4900 for you to make $1400 dollars and thus exit with your shirt on.

Have an exit strategy!

To the important part. These cryptocurrencies are by no means safe or logical investments. Holding your funds online or on exchanges is generally insecure and often a temptation to trade back and forth between trending coins or tokens. Exchanges make millions and you do not. Gloom, Boom and Doom Report editor and economist Marc Faber says that “a major fraud will reveal itself in the crypto space” , too many of them currently exist and that “90- 98% of the cryptocurrencies will be worthless”.

The blockchain technology which is at the heart of cryptocurrency and many other potential applications is in my view here to stay. There are some interesting projects currently underway in the AGI (Artificial General Intelligence) and microfinance in the developing world. However, to date, I have never conducted a transaction with crypto in Trinidad and Tobago, I have never worked on software that utilized the blockchain architecture and only know of one restaurant in Port Of Spain that accepted it a few years back.

If you have had any experiences with local businesses or projects utilizing cryptocurrency, blockchain or smart contracts please do share. Technology and business in T&T have so much to gain from shared knowledge and experience. Be sure to mention them in the comments section.

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Raphael Jones

I am all about personal growth, sharing great ideas and exploring new technologies and businesses. Looking forward to your support. Let's go!