For the past year, I embarked on a simple experiment: investing $5 in cryptocurrency every single day. The goal wasn’t to get rich overnight but to better understand the crypto market and see what would happen with consistent, small investments over time. By the end of 12 months, I had purchased 365 different cryptocurrencies. Here’s what I learned from this journey.
The Plan: $5 a Day, 365 Cryptocurrencies
The experiment was straightforward: invest $5 daily into a new cryptocurrency. I believed this approach would reduce risk by spreading investments across a diverse range of coins, making it a cost-effective way to learn about the market without risking too much. My hope was to see if small, consistent contributions could lead to significant returns.
But as the year unfolded, I realized the crypto world is far more complex than I had anticipated.
Crypto Prices Are Extremely Volatile
One of the first lessons was how wildly crypto prices can swing. On some days, the value of a coin I bought surged by over 15% within hours. On other days, it dropped just as quickly—or worse—overnight.
Despite diversifying across hundreds of cryptocurrencies, my portfolio often moved as one. When the market trended downward, nearly every coin followed, making it difficult to maintain any sense of stability. This unpredictability showed me just how challenging it is to stay calm when prices are constantly fluctuating.
Diversification Doesn’t Guarantee Stability
I assumed spreading my investment across 365 cryptocurrencies would shield me from major losses. The logic seemed sound: if one coin underperformed, others might compensate.
However, I quickly learned that when the crypto market declines, most coins fall together. Even though each cryptocurrency is unique, they are often driven by the same market forces. While a few coins occasionally outperformed, their gains rarely offset the losses in the rest of my portfolio.
This experience highlighted an important truth: diversification can help reduce risk, but it doesn’t eliminate it in a market as interconnected as crypto.
Timing Matters More Than Expected
My approach was to buy $5 of crypto every day at the same time, regardless of market trends. While this routine was simple, it often resulted in buying at less-than-ideal prices. On lucky days, I purchased coins just before their value surged. But on other days, the price dropped almost immediately after I bought in.
This taught me that timing plays a crucial role in crypto investing. While consistency made the experiment easier to manage, it didn’t always lead to the best outcomes. Paying closer attention to market trends or researching optimal buying times could have helped me avoid losses and make smarter decisions.
A Crash Course in Cryptocurrencies
One unexpected benefit of this experiment was the opportunity to learn about so many different cryptocurrencies. Each day, I spent time researching the coin I was buying—its purpose, the team behind it, and the problems it aimed to solve.
Some projects seemed innovative with real-world potential, while others felt speculative and risky. This process deepened my understanding of the crypto space and helped me identify which coins might be worth considering for long-term investments. Even when my picks didn’t always pay off, the knowledge I gained was invaluable.
The Emotional Rollercoaster of Crypto Investing
I wasn’t prepared for the emotional toll of watching my portfolio’s value rise and fall daily. On days when prices surged, I felt optimistic and energized. But when prices dropped, I experienced frustration and disappointment.
This taught me an essential lesson: emotions can easily cloud judgment in the crypto market. The key to success is staying calm and avoiding impulsive decisions based on short-term changes. Crypto investing requires patience, discipline, and a long-term perspective.
