The Price of Procrastination (But Alas…)

Procrastination hurt me in my Bitcoin purchase. I wanted to buy in at $44. I meant to buy in at $500, then at $700. I tried to buy in at $2,000, and I ended up buying in at $3,909.

The first time I heard about Bitcoin it was $44. Research indicates that must have been January/February of 2013. I probably read about it in a waiting room’s Wired magazine. I remember thinking “I should buy 10 Bitcoins”. But at that time, $440 was a lot (my spouse and I had 2 babies and were recovering from the Great Recession). I don’t know why I came up with “10” and not “1” or “5” which would have been more economically reasonable at the time.

Also, back then I wasn’t sure WHAT I would be purchasing if I bought Bitcoin. I assumed I would get a physical object like a casino chip. I also wasn’t clear on WHERE or HOW to buy. I think I googled it and saw there were informal peer-to-peer networks but I wasn’t thrilled about meeting a stranger and handing over hard earned dollars for something I couldn’t validate to be legitimate. There’s something unsettling about spending money on a coded series of numbers that you can’t hold in your hand. So I did nothing. And Bitcoin became more valuable. And I hated that I didn’t buy any.

In 2014, the biggest Bitcoin exchange was Mt. Gox, and it got hacked. All Bitcoins at that exchange were lost.  I felt an odd sense of relief at this news. I was sure that if I had bought Bitcoin, I would have bought them through the biggest exchange. By NOT buying Bitcoin, I prevented myself from losing my $440 worth of Bitcoin. I was smart to procrastinate – or so I thought at the time. Here’s a fun fact: I finally bought in at $3,909.  So even if I did lose all 10 coins in 2014, and purchased them again at the 2014 price, I still would have been far better off. But alas…

In 2015 Bitcoin was $300 – $400, and I thought our family business should start accepting Bitcoin payments. I planned to write a press release about it. It was really a publicity stunt to differentiate us from competitors, but I figured before issuing this press release, we should actually have an account to accept Bitcoins in case someone wants to exercise that option. As you can guess, I never got around to creating an account to accept Bitcoin, so I never wrote that press release. I’m sure I would have bought some Bitcoins at $300 or $400 (probably 10 since that’s my preferred number) and they would have appreciated ten-fold. But alas…

Around 2015-2016, I started following Twitter accounts @CoinDesk, @Cointelegraph, and @WorldCoinIndex to study valuation fluctuation trends. I also became familiar with altcoins like Ethereum, Litecoin, and Monero.

During the summer of 2016 amid the Hillary/Trump presidential campaigns, I felt a strong urge to invest in Bitcoin. I still wasn’t sure how to do it, but I saw there was a “Bitcoin Center” a few miles from me that offered information sessions and a “Bitcoin ATM”. I meant to attend an info session but didn’t. I liked the idea of an ATM but I wasn’t sure what it gave you. It would have taken little effort to travel the few miles to go check it out, but I did not. And the price of Bitcoin continued to climb.

After the surprising win of Donald Trump, the voice in my head screamed BUY BITCOIN NOW. The price was around $600 or $700. I was still fixated on buying 10 Bitcoins, and I had $7,000 available, but I was conflicted: I wasn’t broke like in 2013, but $7,000 is a lot of money if it turns out to be a bad investment. How would I tell my kids they can’t take gymnastics lessons anymore because I poorly invested our discretionary funds?  My spouse wasn’t following this market and maybe wouldn’t object to this investment, but I sure as hell would hear about it for the rest of my life if this lark of mine went wrong.

One morning about a week before Trump’s inauguration, I woke up determined to withdraw $7,000 cash and buy 10 Bitcoins from that Bitcoin ATM. But then I had to join a last minute conference call, and then I wanted lunch, and then it was cold out and  I had second thoughts about the 5% ATM fee because I’d have to take out MORE than $7,000 and that seemed excessive,  etc. etc. etc. So I didn’t do it.

After Trump’s inauguration, Bitcoin jumped from $800 to $1,000, then climbed to $1,200. Week after week I watched in horror as the valuation continued to rise. “When it gets back to $1,000 I’ll buy 10,” I said to myself. It never went back to $1,000. In May it reached $2,000. I couldn’t believe how quickly it rose. I hated that I didn’t buy at $700 or $800. I would have more than doubled my money in less than 6 months. Now I’m late to the party and need to spend more to get less.

In June I committed to buy at $2,000, bitter about not using the Bitcoin ATM to buy in at $700. The 5% fee on $7,000 would have been only $350, which is a rounding error on the gains I could have made. But that was the past and this was the present. I was ready to buy Bitcoin THAT DAY in early June. I chose Coinbase for this transaction. I made a user name and password and was ready to go to my bank and finally get this transaction over with. It was then I learned buying your first Bitcoin online takes more than one day. I wrote about this fruitless experience in the post My First Bitcoin. To make a long story short, I was not able to buy in June at $2,000. I wasted a lot of time on Coinbase until I finally moved to a different platform (click here to read this sad tale). I finally bought my Bitcoin at $3,909.

Let’s do some fun calculations. At $3,909 I could have purchased almost 89 Bitcoins when they were $44. I could have just about purchased my 10 Bitcoins when they were $400 each. I could have purchased almost 2 Bitcoins just a few weeks sooner when they were $2,000 each. But I procrastinated and ended up buying 1 Bitcoin for $3,909. If I could kick my own ass I totally would.

Since purchasing, my solitary Bitcoin has increased almost 85% in value. Some analysts predict Bitcoin could reach $100,000. Some analysts predict it’s a bubble ready to burst. Obviously I’m hoping for the former to be true. But if the latter happens, I know I’ve spent the same amount of money on less interesting things, and at least I experienced a part of financial history first hand. I also learned that procrastination is expensive, and I should listen to that voice in my head when it’s screaming to do something.

Let me know about your Bitcoin buying adventures in the comments section. Are you kicking yourself for procrastinating? Or were you able to get in at a good price and ride the upswing?

The Day I Bought My First Bitcoin

I bought one Bitcoin on September 19, 2017 for $3,909. This purchase was approximately 4 years in the making. For those who haven’t yet bought Bitcoin or altcoins, I’m reporting my experiences to help you avoid the problems and frustrations I encountered. Much of it was self-inflicted. Some of it was bureaucratic.

By the time I finally acted on my intention to buy Bitcoin, the price increased X100. During the summer of 2017, I trolled the Internet researching the best platform to buy, and decided on Coinbase. This was my first mistake. To be fair, it seems that people who signed onto Coinbase between 2012 and mid-2016 are happy with the platform. But those of us who signed on mid-2016 and later had a terrible experience.

In the spring of 2017, Bitcoin climbed from $800 to $1,300. I could see the steady rise in valuation and I wanted in. When Bitcoin reached $2,000 at the beginning of June, I signed up for a Coinbase account. I was wanted to buy immediately. That day I learned there is no “immediately” when you are buying for the first time.

In hindsight, all crypto platforms I’ve encountered (in the US) require a “validation” process, which basically means you prove you are who you say you are before you are allowed to buy or sell. Basically, without this ability, having a Coinbase account is pointless. On Coinbase, getting “validated” takes A LOT of time. In fact, 5 months after signing up, Coinbase STILL hasn’t “validated” me. And during that time, the price more than doubled. I tried reaching Coinbase’s customer service and learned they don’t have customer service. They only provide canned FAQ answers and “chat bots” but no live humans to call or email. A heroic amount of digging uncovered a customer service email address. I sent many requests inquiring about my status and how to expedite the process: Provide more information? Clarify something? I never received a response.

I’m embarrassed to say it took 3 and a half months before I moved on to a different platform. Archived Reddit chat rooms indicated Kraken as a decent platform, so I signed up for Kraken and discovered Kraken has 5 “Tiers” of validation.

The first is “Tier 0” which means you activated your account, and you can look around but not buy, sell, or trade. If I recall correctly, you click on a link that’s emailed to you. It only takes a few minutes.

The second is “Tier 1” which means you can trade Bitcoin you already have, but you can’t buy anything with real money (or “fiat currency” as they call it). You provide your full name, country of residence, birth date, and phone number. You can reach “Tier 1” certification within a few hours, but for someone buying their first Bitcoin, this Tier is useless.

So you move on to “Tier 2” which gives you a little more functionality but still restricts a US resident from buying their first Bitcoin. You are asked to upload a scan or photo of the front and back of a government-issued photo ID, like a driver’s license. It also asks that you upload a scan or photo of a bank statement or credit card statement with your full name and address on it. It also asks you to take a selfie holding your government-issued photo ID and a sign with a statement declaring “Only for trading digital currency on” with the date and your signature. It felt like a posing for a “proof of life” note in a hostage situation. I uploaded it all and waited for confirmation. After a few days of no change in status, I became concerned and looked for a customer support outlet. Of course there was no phone number but there was an email address. Remembering my bad experience with Coinbase, I reluctantly emailed Kraken customer service and I was shocked to receive an answer a few hours later that day – signed by a person’s name. He said my application was working through the system but it all looked fine. I thanked him for the speedy response, and received a response saying “you’re welcome” which was not necessary but nice.

I think a week passed before I received the email indicating my ID was accepted and I was “Tier 2” validated. In the mean time, Bitcoin price rose 10%.

I moved on to “Tier 3” which lets a US citizen link a bank account to a Kraken account. I was eager to complete this phase because Bitcoin value was rising quickly. Unfortunately, linking your Kraken account to your bank account takes almost a week.

First of all, you need to know your bank’s wire routing number WHICH IS NOT THE SAME as the routing number on your checks. Finding the right person at your bank who understands what you’re asking for is a process that may take an hour or more. Once you get this information, you populate it into your Kraken account. Then you have to decide EXACTLY HOW MUCH money you plan to wire from that bank account into your Kraken account. I found this nerve wracking since Bitcoin prices were rising daily. I ended up wiring enough to buy 2 Bitcoins at the time.

When you identify the amount of money you plan to wire, Kraken sends you special instructions that you MUST PRINT OUT AND TAKE TO THE BANK. You need the special instructions to wire the money into your Kraken account successfully. If you make a mistake, your money can be stuck in limbo for who knows how long.

I printed my instructions and went to the bank. My bank charged $35 for the wire. The funds’ destination address on my print out didn’t match what was in my bank’s system and I was concerned my money would end up in purgatory. The bank employee assured me their system was correct which gave me no comfort. I logged into my Kraken account every day for the next few days and saw my wire transfer “pending”. I wired the money on a Friday and the following Thursday the wire cleared and appeared in my Kraken account. Apparently, funding your account the first time takes the longest and subsequent wires will clear faster.

That day Bitcoin was $3,909. I wanted to buy 2 (one for each of my kids) the amount I wired was just short of the $7,818 I needed. So I bought only 1 Bitcoin and had about $3,500 left in my Kraken account. I was glad I finally bought my Bitcoin, but disappointed I procrastinated for so long that I could only afford to buy 1. With my remaining $3,500, I bought some altcoins and I’ll tell you about that adventure in a separate post.

Kraken also has a “Tier 4” which is just like Tier 3 but gives you higher spending limits. This is for ballers, not civilians like me. There’s a whole menu of “leveraged options” and “stop limits” that I’m quite confident I will never use.

So, the moral of my story is if you’re THINKING of buying Bitcoin (or any cryptocurrency), you should set up your account NOW because it’s a very time consuming process. It might be a good idea to sign up for a few exchanges simultaneously so you don’t lose time if you find one platform is not good.  When trying to choose which service to commit to, test out its customer service. If they aren’t responsive when you test them, they won’t be better when you actually need them. When you decide on a platform, fund your account before you’re ready to buy. Wire a small amount to make sure you’re doing it right. When that arrives successfully, wire more money – enough to make a purchase so you’ll be ready when the price is right.

I wish I had the benefit of someone’s experience before I muddled my way through the process. Let me know about your first Bitcoin purchase in the comments section. I’m also happy to answer questions to help you get through the buy in process.