My Advice to a Bitcoin Crorepati in 2014 (Hint: Didn’t Work. He is Richer now!)

A close friend (outside India) recently forwarded me a mail that I had sent to him in 2014 about Bitcoin (BTC).

Have a look at the mail that I sent him (in January 2014):

Friend advice to sell bitcoin

Please ignore the typos in the mail. But what I was trying to tell him was that he should get rid of his Bitcoins as the price had moved up very high very fast. I just checked the historical BTC prices and found that during the early part of January 2014, the BTC was trading at $800-$900 per Bitcoin (check historical BTC prices here by modifying the URL appropriately). And just a few months earlier to that, it was in the range of $100-$200 per BTC. So it had run up a lot in a short time.

In my view, the rise from $100 to almost $900, which is 9X (almost 9 times or 800%) was something of a too steep a rise. And hence, I advised my friend to sell out and book profits.

By the way, he had mined some Bitcoins and also bought a few at a low price of around $100. So his overall cost was way too low when compared to the then current price of $900.

And I remember that why I was even more excited and pushing him to sell his cryptos was because the value of his BTC holding then (at 1 USD = INR 63 in early-2014) was close to Rs 1 crore. Remember that this was in 2014 when Bitcoin was at $900.

What happened next?

He told me that since he had bought (& mined) them so cheap, he didn’t want to sell them. He wanted to let his luck play out longer. I tried harder to convince him about the meaning of Rs 1 crore (when we were both aged 29 only) but he didn’t budge. He had his views.

As fate had it, the BTC prices from there on kept grinding lower. It eventually went down to the lows of $250 in mid-2015. And I used to laugh at him for not listening to me. He still did not sell his coins till then. In fact, he bought a few more Bitcoins and few other Altcoins as well. This continued till December 2016, when after almost 3 years, the prices finally climbed back to the point where I had asked my friend to sell out ($800-$900).

Bitcoin price 2014-2016

And then, all hell broke loose.

Suddenly and out of almost nowhere, Bitcoin prices rose from $900 and shot up to $19,000 by the end of 2017, i.e. in just 12 months!

Bitcoin price 2017

That’s up 19 times in a matter of 12 months.

In between and around $15000, he did sell a small portion of his Bitcoin holdings finally. But still held on to a major chunk of it.

And then, you all know what happened.

After again falling a bit for some time, the rise started again and in April 2021, Bitcoin crossed $63,000 per coin!

Bitcoin 2014 to 2021

Remember his effective cost price per Bitcoin was around $100. And a few years, he back had about a Crore worth of Bitcoins. And he did sell some but the prices from the Rs 1 crore valuation days are now up almost 50+ times! Do your maths and imagine how rich my young friend got by not listening to me. 😉

Sometimes it pays to just do what your gut feeling tells you to do.

We now joke about this and laugh about it. I wish I myself had invested some money back then. 🙂

He is honest enough to say that he got lucky. But I think it still required a lot of conviction and willpower to stay put when something you hold (and which is wild like Bitcoin) goes up almost 50X and turns into an amount that will be more than enough to retire early. Not only that, it is an amount that will be more than enough for his future generations as well.

It indeed has been a crazy ride.

Moral of the story?

I don’t know.

Maybe luck deserves a lot more respect than we give it. And at times, you just got to do what you feel like without listening to what others (even wellwishers) are telling you.

I just felt it would be fun to highlight how one can be right in the short term and then be so horribly wrong in the long term (that’s me).

The joke is definitely on me. But never mind. It was an incident worth sharing.

PS – My friend has still not retired or anything. He still continues to live his life regularly as if nothing has happened.

By the way, I have written a few detailed notes on other aspects of Bitcoin and other cryptocurrencies. If you are interested in this, you can check the below links:

One more thing. This story might seem like a fairy tale. But the fact is that Bitcoin in particular and cryptocurrencies, in general, are extremely risky and volatile. It’s not for everyone. But that doesn’t mean that it is not for anyone. So make an effort to understand what it is, what its potential is, and only then, decide how much you want to invest in it. Don’t do it just because your friends are doing it. Or maybe I should have done that myself a few years back! 😉

And nothing that I have written here or in the posts linked above should be considered as investment advice, please. I am a SEBI-registered Investment Advisor and for more traditional management of finances (in equity and debt), I do goal-based financial planning for my clients. I don’t advise on cryptocurrencies as of now.

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