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I sold my car for Bitcoin

By: The Fire Lane

In December of, 2015 I purchased our first $20 in Bitcoin (BTC). I bought Bitcoin and was hooked.

A Facebook friend from High School had been purchasing it for a few years.  I’ll never know for sure how many or how much he had.  He would post the benefits of Bitcoin to his Facebook Wall. Over the course of these years, it was spreading. I saw more friends from High School replying about their own cryptocurrency adventures.  You could tell the exposure to Bitcoin was growing.  At the time, my interest was because of the hype around the potential for huge investment gains.  This is long before I began contemplating our journey to FIRE.

What is Bitcoin exactly?

Without writing a 50-page thesis, Bitcoin is the following:

  • Digital Money – Currency and Stored Value
  • It’s highly secure – It’s for all practical purposes uncrackable which mean your value is safe.
  • It’s trustless – You can exchange it peer to peer without an intermediary like a bank, Visa or Paypal.
  • It’s not physical – The value is stored on the Bitcoin blockchain.  The blockchain is a virtual ledger.
  • There is no central bank or owner of Bitcoin.  No central power can take or manipulate your money.
  • There are only 21 million ever to be created.  There is no printing additional money to manipulate the value.

How did I buy it?

I purchased my Bitcoin using the web service Coinbase.  I created an account and then submitted the relevant verification information. I provided a copy of my driver’s license and social security information. The process is not much more intensive than creating a new bank account.
 
My course of action was to purchase using a monthly automatic investment of $20.  I provided my credit card and set up the automatic exchange.  For our first purchase, I was purchasing at an exchange rate of $435.25 per single BTC. 
 
Hint: Buying through Coinbase. Check that your credit card purchase will not count as a cash advance.
Dollar Cost Averaging Bitcoin.

Each $20 purchased less and less coin as the price went up.  The price rose slowly at first.  In 2017 something changed.

I bought in $20 increments until April 11th of 2017 when I realized I was now purchasing the coins for an exchange rate of $1214.69 per single BTC.   This equates to a 179% increase from the intial rate.  This was a great gain and I took notice.

I began getting major FOMO.

I had only managed to procure about 0.5 BTC in the 18 months I’d been investing.  I wanted more because I saw something coming.  So what did I do?

I Sold My Car and Bought More Bitcoin

That might sound hyperbolic.  But it’s true.

In April of 2017, we were hit with a rather strong thunderstorm which produced nearly baseball-sized hail.  It’s Texas Y’all!  Hailstorms in Texas cost Billions in damage.

My son demonstrating the size of the hailstones
My wife Erica’s Explorer made it into the garage. But, for lack of room, mine stayed on the driveway to deal with the storm and the hail.  My paid-in-full 2014 Mazda 3 was destroyed.  Glass was shattered, the back window has been knocked out completely. The rest of the car appeared to have been beaten with a baseball bat. We called our insurance agent at Travelers and they met with us rapidly.
 
Surprisingly to us, the car wasn’t totaled. The insurance agent wrote us a $6,100 check for the damage to get it repaired.  I then replaced the back window for $125 and took the car to Car Max who offered me $9,000 for the car in its current condition.  I made the deal.  Between the $6,100 from insurance and the $9,000 from Car Max, we cleared $14,975. The value of the car at the time was roughly $12,000 for a private party sale. It didn’t make sense to repair it.
 
Here’s where we definitely begin to deviate from a solid financial plan.  We weren’t yet on FIRE.
 
I took my $14,975 and put $3,000 on my current car Lease.  That wasn’t the best idea. About $5,000 went to bolster savings.
 
But what did I do with the rest of the money?
 
I bought some Bitcoin!  I invested $7,000 in total.  In hindsight, we should have purchased more.  C’est la vie.

Great Timing, Buying on the Run Up

I was still intent on dollar cost averaging.  I wanted to do so at a faster pace since the market was moving quickly. Some of my larger purchases include:

May 2017

  • 05-05 | 0.15 BTC @ $1,574 per coin
  • 05-10 | 0.15 BTC @ $1,794 per coin
  • 05-19 | 0.11 BTC @ $1,997 per coin
  • 05-27 | 0.25 BTC @ $2,057 per coin
  • 05-28 | 0.25 BTC @ $2,210 per coin

June 2017

  • 06-07 | 0.25 BTC @ $2,780 per coin
  • 06-11 | 0.19 BTC @ $2,919 per coin
  • 06-12 | 0.30 BTC @ $2,677 per coin
  • 06-14 | 0.20 BTC @ $2,451 per coin
  • 06-28 | 0.15 BTC @ $2,534 per coin

July 2017

  • 07-16 | 0.50 BTC @ $1,838 per coin

This was reckless spending.  We took a 3 day trip to Las Vegas at the beginning of June right as prices were spiking.  I was buying Bitcoin one minute and playing blackjack the next.

Where was I really gambling?

i bought bitcoin

I purchased a more here and there for the next few months.  My last Bitcoin purchase (to date) and my most expensive Bitcoin purchase was on October 15th, 2017.  I purchased 0.25 BTC for $5,557 per coin.

Shattering the Glass Ceiling

Bitcoin began another Rally in November 2017 and ending in December 2017.  It ran up from the $5,557 purchase in October to a glass ceiling of $20,000 at it’s high in December.

It was obvious to many that the price had reached a level that couldn’t sustain itself.

My Facebook friend who had introduced me to cryptocurrency 2 years before chiming in.  He posted to his wall a convincing argument.  This showed Bitcoin support levels somewhere near $8,000.  It appeared the current market was due for an immediate correction.

I didn’t listen to him in 2013 when he started posting on Facebook about Bitcoin.

I half listened to him in 2015 and purchased way less than I should have.

Now he was offering one more piece of advice.  So I was going to listen to him this time.  I sold.

i bought bitcoin

In January of 2018 Bitcoin Began a New Downward Trend.

In what appears to be a cyclical flashback.  Repeating cycles from 2014 and 2015.  Bitcoin came off it’s high of $20,000 and entered what’s now a 9 month bear market dipping as low as $4,500.

Many people who purchased Bitcoin at the top of the market in 2017 have seen a major decline in value in their investment.  Many sold and took the loss.

When will the trend reverse?  It could be a month, a year, 2 years or never.

Still a Believer

I do believe that Bitcoin has a future and a place in society even with the decline to current levels.  I believe it’s more useful as a digital store of value than a currency.  But there are also great products built on top of Bitcoin that can help Bitcoin take the place of Paypal and Visa.

I still own Bitcoin.

About 1.5 BTC at the time of this post.

Pay attention to my Net Worth reports and you’ll see I track my cryptocurrency holdings.  Along the way, I picked up some Litecoin and Ethereum.  Neither of these coins are profitable for me at Current Levels.

I would likely buy more Bitcoin if the price gets below $3,000.  I’m not sure if it ever will.  I’ll let you know if that happens.  Maybe you will decide it’s a good time for you to purchase just like I did back in 2015.

Let me leave you with this great link from Investopedia on what your investment in Bitcoin would be worth if you began purchasing in 2011.

Republished with the permission of TheFireLane.com.

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