Cryptocurrency has been controversial from the onset given that it’s a form of currency you can’t ever lay your hands on, and because it tends to fluctuate wildly in value.
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Despite that, many investors have tried their hand at investing in cryptocurrency, especially when it appears on the upswing. Not everyone is so lucky, however. Sandy Clarin*, an investor from California, invested big in crypto and lost big, too.
Read on to find out what lessons she learned in the process.
Taking a Leap
Clarin had started paying attention to cryptocurrency investing in 2017 when a client attained billionaire status investing in Bitcoin. In June 2020, she began researching Bitcoin and blockchain in earnest. She started by dabbling with a few Bitcoin investing apps, and then eventually moved a retirement account over to Bitcoin entirely.
That retirement account, Bitcoin IRA, is insured against fraud, though it’s subject to the same whims of the market as any other retirement account.
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The Blockfi Catastrophe
Clarin and her husband are no strangers to investing — they have numerous investments in real estate rentals, 506c, stocks, funds, annuities, life insurance, gold, bonds and personal lending. She eventually decided to invest in a company called BlockFi, a digital asset lender, in 2021.
“I bought Bitcoin with Blockfi stablecoin and still earned interest. It’s called interest farming. So now, instead of interest on your money, your interest on your coins and the coins themselves increase in value,” she said.
Bitcoin is not an infinite source of coin, however, she explained. It “halves” every four years or so, cutting the supply in half and potentially increasing in value.
“So when the miners find it, then it’s just basically holding gold and they’re not going to be able to mine anymore. So theoretically it increases in value.”
While she knew that Bitcoin could just as easily decrease in value, she said, “The market was going bananas and so was cryptocurrency.”
BlockFi was doing great at the time she was investing. Unfortunately, she didn’t learn that they…
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