‘My friend bet his house on Bitcoin and it worked out. Now I feel like a fool’

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Dear Luca,

Two years ago my best friend told me something that shocked me.

‘Robert, I’m selling my house to invest it all into Bitcoin. I’ve researched this, and I’m sure I will benefit. You should do the same.’

I couldn’t believe what I was hearing. I knew he was a big fan of crypto, but this seemed crazy. 

I told him so, and warned him that he was throwing away his best possible investment to speculate in something uncertain. 

Bitcoin was worth around €30,000 at the time. I was not really interested in crypto, but I knew that it had crashed from highs of around €60,000. 

To my horror, he went ahead with his plans. He sold his house for around €500,000, spent most of that to buy Bitcoin and started renting. 

That half a million is now worth almost €2 million, and he’s now planning to buy a house that’s bigger than his previous one, with plenty of cash left to invest.

I couldn’t believe it. My own property has risen in value in the past two years, but it definitely hasn’t quadrupled in price.

I am a lawyer and a parent, while my friend worked as an LSE. Now he’s quit his job to focus on his investment.

All this makes me feel so embarrassed in a way. What’s the point of the law degree and all the years of hard work?

I am ashamed to feel jealous, and at the same time I feel like I missed out. If I had done what my friend advised me to do, by now I’d be at least semi-retired!

Feeling Left Behind

Luca responds:

I understand your frustrations, but understand that what your friend did is extremely risky and not for the faint-hearted. 

Firstly, let’s imagine a scenario where you do what your friend did: sell your home and buy Bitcoin with it.

How would you feel when Bitcoin loses half its value or more? It’s happened several times in the past – there’s nothing stopping it from happening again.

You yourself said that you never really followed Bitcoin, and only took some interest in it when you saw your friend succeed.

I suspect that your friend not only follows Bitcoin assiduously, he also has incredible conviction in it. That conviction led him to take a huge risk and sit tight as prices rose and fell over the past years.

Would you have been able to do the same? 

I am not saying that Bitcoin cannot go higher from where it is – it is not my job to speculate, but to help people make reasonable choices according to their life situations. It may be the case that Bitcoin does very well in the coming years. Maybe it will quadruple in price again. But are you ready to go all-in, just for the chance of it doing so?  

If your friend’s success has picked up your interest in cryptocurrency, then use that as motivation to research and read up, and then start layering in gradually.

But whatever you do, do not sell your house just to be in the game.

You have a family, a house and a career. I understand your desire to achieve financial freedom in a few years – this has been the mantra of everyone lately. But don’t let the dream blind you. 

Some go too far and face financial ruin that is very difficult to recover from, while a few others succeed.

Are you ready to play the game of probability that way?

I hope this helps.

Luca is the founder of the Money Coaching Hub. Email him your financial questions or your response to today’s question for a chance to be featured in a future column.

Disclaimer: This column is intended to provide general information on various topics related to personal finance. The information provided is for educational purposes only and should not be construed as personalised financial advice for your specific situation. Financial decisions are highly individual and can vary greatly based on your unique circumstances, goals, and risk tolerance. The author of this column is not authorised to provide financial advice. Before making any financial decisions, it is recommended to seek professional financial advice from an authorised financial advisor.