My biggest crypto loss is an opportunity cost.
I didn't buy Bitcoin when a good friend of mine was basically begging me to buy it.
I was under the impression that he was suffering from The Bigger Fool Theory.
If you've ever been victimized by any kind of stock hype, you should already know what The Bigger Fool Theory is.
But just in case you guys don't know, The Bigger Fool Theory is basically a process where people bid up the price of something, not because they believe it has value.
They believe that, when people see the price going up, they would think that there is some inherent behind that thing.
I'm not even going to call it an asset.
I'm not even going to dignify these pump-and-dump schemes with that terms.
But the idea is that when the price moves fast enough and enough people buy it at an even higher price, it creates a stampede mentality.
This is called the Fear of Missing Out, and this is closely intertwined with the idea that even if you know you may be making a foolish move, there is a bigger fool out there who is going to outdo you.
I was afraid that this was going on with Bitcoin.
Think about it.
It has no physical equivalent.
Basically, it is just a measure of electrical energy expended to make calculations online.
That's the bottom line.
But I was mistaken because Bitcoin, at the time my friend was trying to get me to buy it, was around $10 or slightly less! Everybody knows its price now.
The biggest loss is that I didn't get in early enough.
I'm not big on the other markets that have developed around Bitcoin, but I believe Bitcoin is here to stay.
It will continue to have value because it has a large enough base.
I can't say the same for other cryptos.
