[MarkCole]

Is there a specific reason you're keeping so much of your wealth tied up in Ethereum? (Not that clued up on it, perhaps there isn't a big enough market there to sell it yet?) It seems to me like having all of your eggs in one basket. Wouldn't it be better to convert a decent portion of it to cash and invest that in a nice mixture of stock and bonds?

[zen_boy]

Ethereum seems to have great potential to multiply its value in the next 12-24 months. I think the probability of ETH going from 1B$ -> 2-5B$ market cap is far greater than BTC going from 10B$ to 20-50B$ due to several factors.

My line of thinking has been that in order for the 4% to be meaningful, you need to start with at least a million. Saving a portion from the salary and getting 4% annualized growth just wouldn't have ever achieved the type of financial wealth I had in mind. YMMV.

But now I feel like the time has come to diversify and start reducing the risks. Going from 20$ to 10$ per ETH definitely hurt.

[chillydawg]

You do realise you're gambling, right? There's nothing wrong with that, but be honest with yourself about the risks of having nearly all your money in one instrument (ETH) which could easily wildly fluctuate up or down. If you honestly think it's a bet worth making, go look up the kelly criterion.

[zen_boy]

This is always a good reminder. Then again, had I not done that investment or cashed out earlier, that 20k€ would be nowhere near 1M€. There simply doesn't exist many ways to achieve 50x ROI in <5 years. Seems like majority of people are happy with lower yield plans, but I personally would have not achieved my goals without some aggressive increase in wealth.

Hard to say what I would be saying had I lost everything though. It's easy for me to rationalise the decision now that it paid off. And yes, we have to remember to look at the graveyard too.

The non-linear utility of money puts an interesting twist on things though. The effort and risk one should take to achieve additional wealth seems to reduce logarithmically after a certain point. I guess that point seems to be further for me than most people, but I feel it's close now.

[morgante]

If someone won the lottery for $1m and proceeded to dump their entire proceeds back into lottery tickets, you'd rightly think that they were insane. Yet that's exactly what you're doing.

You don't have to liquidate your entire stake. Heck, you could keep a full 100k in Ethereum—if it has a run-up on the scale of Bitcoin, you'd be making millions. But you wouldn't have all your eggs in one basket.

I definitely understand the desire/impulse to make big bets, but as with any gambling operation it's important to consider when you cash out. Right now you're betting $1m on the potential to make $50m, when you could have a guaranteed $900k with the potential to make $5m.

[chillydawg]

You could probably say that about playing roulette if you happened to win your first spin. Doesn't mean it's a good bet, though.

[zen_boy]

Comparing an educated crypto investment with a negative EV gambling game seems a bit too farfetched. I'm quite considerate and picky investor, and did extensive research beforehand.

I do get what you are saying, but I think this is over-simplifying things. There were a lot of interesting facts and conclusions available to be made early on about the possibilities.

Again, extremely hard to say what the odds of failure still are and were in the past. And hard to say what my stance would be had I lost the initial investment. It's easy to rationalize the investment in hindsight.

[uniqueid]

The annoying thing about survival bias is that the survivors who took the largest risks often get the greatest rewards, and then carry the most influence.

So someone who sank her entire life savings into LTC a couple years ago, would sound more worthy than this person.

And, depending on how credulous the reader is, someone who went into debt to buy a few lottery tickets, and was lucky enough to win, could trump both of them.

[DennisP]

It does wildly fluctuate up and down, but he's also got a 1.5M startup and he's only 30, so he can easily afford the risk.