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70% Coiners

bitcoinWhen Bitcoin blasted through $12,000 late last year a Noosa local, who in a previous life promoted herself as a 'health activist', launched a new crypto business.

As you do.

She spruiked:

"...a simple trick that allows you to choose your investments by knowing which coins to buy (so you don't waste money on "bad apples")..."

"Buy, Sell And Trade Bitcoin And Altcoins Easily  (And get started with no money down).."

No money down?.

What could possibly go wrong?

At the same time I received an email from an ex-client suggesting, not politely, that I would be better off jamming divesting the Growth Portfolio and putting it into his new crypto fund.

Ah, yes. Good thinking.

What could go wrong?

At about the same time, November 2017, I started referring to a crypto data point on my Twitter feed.

70%.

No other info provided.

A technical level? Retracement price? Profit target? HODL? FUD? Whale?

The answer shortly, but consider the 2018 Crypto returns^...

Qtum: -96%
ICON: -95%
Cardano: -94%
Lisk: -93%
IOTA: -92%
NEM: -92%
Bitcoin Gold: -91%
Dash: -90%
OmiseGO: -90%
Bitcoin Cash: -89%
NEO: -88%
Litecoin: -86%
zCash: -84%
Ethereum: -83%
Ethereum Classic: -81%
Monero: -81%
XRP: -79%
TRON: -76%
Bitcoin: -67%

So what's with the 70%?

According to the National Endowment for Financial Education, 70% of people who gain a large windfall end up broke several years later.

There are many academic papers* that have studied the impact of a sudden windfall;  lottery wins, inheritances and other 'unearned earnings' such as Bitcoin.

The 2001 paper "Evidence from a Survey of Lottery Players" suggested that individuals retained 16% of their winnings.

I learned about greed, fear of missing out and leverage the hard way back in 1987.

Human nature and circumstances available in the financial markets haven't changed.

Only the players have.

Try before You buy The Chartist 200