QuadrigaCX, Litecoins, and Losses: A Cautionary Tale from a Cryptocurrency Investor
How often do we read stories about cryptocurrency investors?
Most of the articles about Bitcoins, Litecoins and all the rest focus on trends, technological advances, and the latest ICOs.
Of course, a few of the more extravagant ones make their way to the collective imagination. You know the ones. Stories about people mortgaging their homes to buy Bitcoins, or couples quitting their jobs to become full-time miners.
What we don’t often hear then are how these stories turn out.
After last year’s crash, I suspect many of them didn’t turn out quite like the dream some people were sold by sensationalist news pieces and over giddy predictions.
I suspect most people enjoy hearing about the success stories. No one likes talking about how they lost money with their investments.
Well, maybe it’s time to break that chain.
I lost money investing in cryptocurrency and I’m not ashamed to talk about it. I was also involved in what’s looking more and more like a swindle by the folks running QuadrigaCX.
My investment experience began fairly sober. I put what was then a week’s income into Litecoins.
Of the three coins that were available at the time, I knew the least about Litecoins but enjoyed that I could own entire coins without having to break out my entire savings.
At some point, I moved my investments from Coinbase to QuadrigaCX. I had done a little research beforehand. I knew that Quadriga was a Canadian company, with Canadian funds as the default currency used in purchases and the charts.
I may have also vaguely known that the CEO was a little eccentric, but then again, which tech company didn’t have an eccentric CEO or founder?
Besides, I was too busy frantically checking the markets, watching them climb and slowly selling off parts of my initial investment.
I was cautious, if anything, preferring to pick up small profits than bunker down like my coins were a magical lottery ticket.
At the tip of the iceberg, when Litecoins were riding above $300 a pop, I realized I would have made much more had I kept my investment intact.
Still, I pulled out half my remaining funds, ensuring that I wasn’t going to lose money if the market suddenly bottomed out (and all the while hoping it would keep on rising).
A few weeks after that withdrawal was the start of the crash. I left my coins on the market, riding it out, hoping (again) that it wasn’t going to be a real crash.
Unfortunately, we all know how that turned out.
Cryptocurrencies bottomed out back to their pre-bubble values and what could have been a handsome remainder of my investment amounted to little more than a (very) fancy bottle of Scotch.
Not that I’m complaining about a fancy bottle of Scotch, of course. I enjoy them as much as the next man, and the thought of trading in my coins for one was pretty appealing.
Still, around Christmas I made the decision to ride it out some more. Play the long game. Markets almost always rebounded; it was just a matter of time.
I purchased a couple additional Litecoins during the slump, put my investment out of my head and promised to revisit it once things got more interesting again.
Things did get more interesting, but not in all the ways I had hoped.
The cryptocurrency markets began slowly climbing back. It wasn’t anything like spike we saw the previous year, but it was hinting at potential growth.
I was getting excited, considering upping my investment and doubling down even further on Litecoins.
But then I got the dreaded email from my exchange. Quadriga was filing for protection and the platform had effectively been shut down, locking up all our currency in the process.
I’ve previously written about the ongoing fiasco of the exchange’s collapse. It’s got a dead CEO, millions in missing funds, a ghastly lack of company transparency, and thousands of victims turned out with nothing but dust in their pockets.
In a recent update about Quadriga, some of the lost coins have been recovered, but only a fraction of the greater whole.
We’re still awaiting details on what this means for us investors.
For thousands of Canadians like myself, our time investing in cryptocurrency has been like the plot of a Hollywood thriller.
We’ve seen our investments rise out of the dust from nothing, attain peaks we could only have dreamed about, and then seem it all come crashing down in a fiery finale.
Maybe there will be a sequel. I’m certainly hoping for one.
Until then, the reality of investing in cryptocurrency is the same reality as investing elsewhere. There are risks and rewards. Recklessness can lead to catastrophe while caution can lead to small bumps in your spending money.
Some people get lucky or correctly read the signs and make it big. Others have different stories to tell. And in the case of us Quadriga users, sometimes things fall apart even when the markets are good.
What we should do is not let the stories of success drown out the equal (if not more numerous) stories of caution and loss.