This is the story of my first trade: how I made a profit and dodged a bullet.
Since becoming interested in crypto last year, I've done little more than hodl (hold on to it). I gained some BAT through the browser Brave, which I hodled; some ETH from the social network Cent, which I hodled; and most recently a mixed bag of coins from my activity right here on Publish0x - which (you guessed it) I hodled.
But then in September I made my first crypto trade. It was profitable, and pretty much accidental.
I was holding most of my crypto with the exchange Uphold, and worked up the courage to try loaning these assets through CredEarn (a service offered by third-party crypto lending provider Cred). At the time there was a pretty much seamless connection between Uphold and CredEarn, and CredEarn was offering a return of up to 10% per year on hodlings - sorry, I mean holdings.
But there was a complication: CredEarn actually offered two rates for each currency, 'standard' and 'premium'. For example the standard rate of return for ETH was 3% but the premium rate was 6%. To qualify for the premium rate, you needed to hold and pledge 10,000 LBA (Cred's own utility token). Here's a short video about LBA if you are interested:
The difference between the two rates was significant, so I knew I had to have some LBA and unlock the premium rate. I kept my eye on the price for a little while, and when I saw my moment I struck - purchasing 10,000 LBA at a price of £0.01304 per token (totalling £130.40 - prices are in pounds because I'm a Brit). There is no transaction fee with Uphold, but that price did include a small spread. My plan with the LBA was to pledge them - a form of hodling, I suppose.
But then something happened that changed my plan before I'd got round to loaning my assets. I stumbled across Celsius - a UK-based exchange that offers very tempting rewards on holdings. Its annual reward rate for ETH at the time, for example, was 7.06% - or 9.65% if you were happy to be rewarded in Celsius' own CEL token (those rates have dropped slightly since September but are still competitive).
What's more, Celsius pays out weekly with no minimum investment period or early withdrawal fees. And, being from the UK myself, I have to say that the opportunity to support a UK-based business definitely appealed.
Deciding to go with Celsius, I no longer needed my LBA - so I sold them a week after buying them. Entirely through dumb luck, LBA had gone up in value and I sold at a rate of £0.01359 - netting me a huge profit of £5.54! That was my first trade, and it was profitable.
But I was lucky in another way as well. Less than a month after I sold my LBA, Cred froze all funds after a "fraudulent incident". As I write this I believe that the funds remain frozen, although going by Cred's Twitter account another update is about due:
Uphold has also announced that it has discontinued its relationship with Cred.
And what has happened to the price of Cred's LBA? You won't be surprised to hear that it plummeted as a result of the fraudulent incident and hit a low last Friday of £0.00579. If I'd held on to my LBA, the value of my investment (assuming it hadn't been lost to fraud) would have halved. Here's how LBA is performing now:
That's not to say that LBA won't recover, and in fact now might be a very good time to buy pending some positive news from Cred... but that's not financial advice. I'm just a man with one trade to his name. Did I mention it was profitable?