Hoping to strike crypto riches, Joel Stein follows the footsteps of a master degen investor. Here are the secrets revealed to him.
Seeking Bitcoin alpha: How I learned crypto day trading 1 This is Part 5 of a special Forkast series on humorist Joel Stein’s adventures in blockchain. In Part 1, he opens a crypto wallet , and Part 2 finds him immersed in play-to-earn as an Axie Infinity gamer . Part 3 follows him into the metaverse to invest in virtual real estate , and Part 4 features him STEPN’ing it up for crypto move-to-earn.
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What initially interested me in cryptocurrency — more than the anti-Wall Street ethos, the promises of privacy or the “ Byzantine Generals problem ” — was making money. A cousin of mine paid for an addition to his house in Pennsylvania with crypto. A teenage Bitcoin millionaire got Taylor Swift to sign a CD so he could launch it into space on his satellite. The Winklevoss Twins financed a national tour of Mars Junction, their cover band , with a sliver of their crypto billions. I wanted a piece of that. Not the middle-aged wannabe rock stardom. The generational wealth.
I was about to sign up with one of the many self-professed crypto pros who charge for lessons in crypto investing. But then a few friends mentioned a guy who gave them great “alpha” — information that led them to earn amazing returns. The alpha guy turned out to be a 35-year-old standup comedian I had contacted 10 years ago to write a piece for a humor website I was considering launching. Since then, he turned US$10,000 into more than a million dollars by investing in crypto. He asked that I not name him because, as he’s said onstage, “I’m kind of ashamed that I made money on crypto. So instead, I tell people I’m on my family’s trust fund.”
I went to his house in the Hollywood Hills, a few doors down from where Kurt Cobain once lived with Courtney Love and their baby, to learn how to day-trade cryptocurrency.
Alpha guy found crypto in the summer of 2017 when he was working as a writer’s assistant on a primetime network sitcom and he had a side hustle of credit card churning — legally signing up for one credit card after another for their cash bonuses and points. He wasn’t spending nearly enough money to hit the US$5,000 trigger for a 50,000-mile bonus, but he figured out that he could buy crypto with a new card and then sell the crypto back to pay the credit card bill. And because it was 2017 — when Bitcoin went from US$1,000 in April to nearly US$20,000 in December — he kept selling his BTC at a profit. “I was like, ‘Sweet, I made money!’ And I love gambling.”
Before this, he was betting on about four Major League Baseball games a day through online sites such as Bovada, at US$50 or US$100 each. Most of the people he’d later meet who were day trading crypto were former poker players who took up crypto after the U.S. made online poker gambling illegal. He put every paycheck into crypto, leaving him with a negative balance in his checking account as he also had to pay for food and his share of rent in a beer can-strewn house in the Thai Town section of Los Angeles that he shared with seven other roommates. “You know how you have a jar of quarters? I was putting that in. I was just going crazy,” he says. “I went so degen .”
Degen , I learned, is what crypto traders like to call themselves, in an ironically proud way, when they become degenerate gamblers by taking on too much risk. The trick was to go degen at the right time. And Mr. Alpha did. He put US$10,000 into coins with cool-looking logos, figuring other people would want to buy those.
He turned his US$10,000 to US$120,000 within six months. But a few days after that, it shrunk to US$35,000.
In December of 2018, he got a tip from a guy on 4chan who called himself Assblaster. He trusted Assblaster so much that he put all his remaining US$30,000 into a coin called Chainlink. One day after buying it, he lost half of his money. He was so distraught he thought he’d never trade again. He came down with what crypto traders call Bear Market PTSD.
He didn’t look at his Chainlink investment for five months. But in […]
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