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If you’re like me, you recognise that bitcoin is egregiously destructive to the environment but simultaneously are like “man, if I’d put a hundred bucks into bitcoin when I first heard of it and vaguely considered it, I’d be a millionaire today, ###regret###.”
I have good news, which is: no you wouldn’t be.
Here’s why: if you’d put $100 into bitcoin back in the day, you’d have sold it when it reached $1000. Maybe $10,000. And holding on to $100,000 in the hopes it’d turn into a million? Come on.
Crypto is gambling, and you should never gamble more than you can afford to lose, right? So the only people who held onto their bitcoin when it was worth $100,000 dollars were:
- People who could afford to lose $100,000
- People who couldn’t afford to lose it and were therefore making a very, very stupid gamble
And that’s the same at every dollar amount. Some people can’t afford to lose $1000, some people $100, but whatever level you’re at, you would have and should have sold when it hit that figure.
That means it’s literally not possible for a sensible person to make life-changing amounts of money from cryptocurrency, because the only way to do it is to bet more than you can afford to lose. Even if you only initially put a little down, every time the price goes up and you don’t sell, you’re effectively choosing to bet fresh each time at the new higher rate.
(There were a bunch of news stories on the ‘Dogecoin Millionaire’, who did indeed become a millionaire by investing in Dogecoin. Specifically, by investing a quarter of a million dollars in Dogecoin.)
I have known a few problem gamblers — they come into work and say “I put $50 on Santa’s Little Helper and won $400!” and everyone congratulates them, which feels great, which is part of why gambling is addictive. But they don’t tell you that they immediately put that $400 on the next race and lost, and that it was the seventh losing bet they made that day. (I try to avoid congratulating people who’ve had gambling wins for this reason — you never know when you’re enabling an addict.)
The ‘Resulting Fallacy’ is when you judge whether something was a good decision based on its results, rather than its likely results. In other words, if someone walks to the shops and a piano falls on their head, we don’t say that walking to the shops was a stupid decision. When someone drink-drives, and gets home safely without injuring anyone, we don’t say they made a good decision.
There may be people reading this who bet more than they could afford to lose on bitcoin, and won. But don’t fall for the Resulting Fallacy.
For the rest of you, there’s just no universe in which you would have put $100 or $1000 into bitcoin and held onto it till it was worth a million, so there’s no need to have any regrets.
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This piece was originally published in The Whippet #130 – subscribe to get the next one in your inbox!
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