In 2015 I was an entrepreneur, had my last knee surgery, and was still riding professionally from time to time—until my body finally gave out.
I was also on the verge of starting my own fund while working for another one.
In other words, I was busy.
My trading signals back then were based on 10-month highs which reflects how busy I was.
We saw a new 10-month high by the end of the year, and that marked the beginning of one of the most legendary trends in financial history.
When I first bought in, the backlash was intense. You were an “idiot” for investing in Bitcoin at that time.
Then, the tide turned and Bitcoin skyrocketed from $300 to $20,000 in the following two years.
Some mornings, I’d wake up in disbelief that some cryptocurrencies had doubled overnight.
People were selling their homes to get in on the action, and everyone was desperate to own cryptos.
The frenzy was wild, and honestly, the charts backed it up.
This was the historic bull run of 12,000% gain that happened from 2015 through the end of 2017.
By December 2017, things had gotten out of hand.
One of the scariest people I know—someone so intimidating that no one would mess with him even in the middle of a death metal mosh pit—threatened to come to my house and kill me. Why? Because I’d said Litecoin would not reach a dollar amount higher than Bitcoin.
Imagine someone who chews lightbulbs for fun… I’m not joking.
By then, everyone I knew owned Bitcoin. Suddenly, I went from being an “idiot” to a “genius,” and crypto was plastered on the cover of every magazine. Between that, the threat, and the general insanity of people selling their homes to buy crypto or Bitcoin tattoos, it started to feel like it was time to sell.
I decided to turn it into a teachable moment. I brought our kid into the room to watch me sell my position, hoping to teach him about market mania and the importance of knowing when to walk away.
Naturally, he thought I was crazy, because that year he was asking for crypto as a Christmas gift.
“Why sell now?” he wondered, especially when everyone was so sure it would keep rising.
I hit the sell button, at a cost basis of $17,135. Over the next year, Bitcoin crashed by 80%, down to $3,000.
We see bubbles everywhere, people are saying gold is a bubble which is laughable. (Gold is nowhere near a bubble) Basically, people say that anything that they are not profiting from and that they wish they were in is a bubble.
Looking at our past can help us answer the biggest question that we have as traders…
