4 ms·

I'm sorry for your hardship. My understanding (which is not a professional or legal opinion) is that individual creditors probably come near last in these kinds

I'm sorry for your hardship. My understanding (which is not a professional or legal opinion) is that individual creditors probably come near last in these kinds of bankruptcy proceedings. It's possible that after a prolonged settlement process you may receive some of your money back, but that's not an outcome that I would place substantial faith in. I say this without an ounce of judgement, explicit or implied: can you speak to some of your motivations for putting your life savings into these kinds of vehicles?

twiddling 4y ago
I would build on this and have a frank discussion with your partner about risk tolerance and long term goals around your portfolio. A single exchange failure should not expose you to this much risk.
christiangenco 4y ago
> can you speak to some of your motivations for putting your life savings into these kinds of vehicles? For sure. My rationale was that keeping crypto in cold storage was effectively currency speculation and didn't really do anything to add value to the world. By instead keeping it in an interest-earning account it could be earning interest independent of the exchange rate with USD and providing some value to the world in the form of liquidity and loans. It's the same rationale I use to justify keeping money in VTSAX instead of under my mattress.
- dnissley 4y ago
  Wouldn't the appropriate analogy to BlockFi be to keeping your money in an interest bearing savings account rather than in VTSAX? Since VTSAX isn't a bank choosing to allocate capital in whatever way they choose
- Nursie 4y ago
  > providing some value to the world in the form of liquidity and loans. I'm trying to avoid coming across as blaming or rubbing salt in the wounds, but I just wanted to say that the rates they were offering during times of such low interest rates in general, were really be a huge red flag. However you feel about cryptocurrency in general (and it's safe to say I'm a sceptic) you have to look at that and think either that something fishy was going on or they had to have an exceptional business model.
stickfigure 4y ago
Not the OP, but... in the abstract, 10% in a high-risk investment seems pretty reasonable? Sounds like they're young. For someone with a multidecade investing horizion, 10% is a minor fluctuation; the S&P500 is down 17% YTD. To the OP: Why is losing 10% of your investments a pretty big blow? Almost everyone's 401K plunged by more than that this year. If you're young this won't be the last time.
- christiangenco 4y ago
  OP here! Thanks for the affirmation. My wife and I are 31 so a 10% drop is definitely something we can recover from. We've already lived through this high-risk crypto part of our portfolio falling to half it's value over the last 19 months but the other half completely vanishing overnight has hit me psychologically harder. Instead of the narrative of "sure the crypto dropped in value but it's done that before and gone back up and it's reasonable to think it could go back up again," "now it's on sale," and "time in the market beats timing the market," the narrative is just "it's completely gone because you got defrauded. Here's a list of the specific people responsible. You shoulda been more diligent in evaluating the risk of giving them your money ya freakin' idiot."
  - stickfigure 4y ago
    I get it, it sucks, and it feels like you could have made better decisions. Hindsight is awesome that way. Don't beat yourself up over it; at least you were smart enough to make it a small percentage!
  - soared 4y ago
    Crypto isn’t a high risk investment though, it’s in a category beyond that. You’re definitely going against traditional portfolio structure by having so much in crypto and are kind of getting what you paid for (risk wise).

twiddling 4y ago

I would build on this and have a frank discussion with your partner about risk tolerance and long term goals around your portfolio. A single exchange failure should not expose you to this much risk.

christiangenco 4y ago

> can you speak to some of your motivations for putting your life savings into these kinds of vehicles? For sure. My rationale was that keeping crypto in cold storage was effectively currency speculation and didn't really do anything to add value to the world. By instead keeping it in an interest-earning account it could be earning interest independent of the exchange rate with USD and providing some value to the world in the form of liquidity and loans. It's the same rationale I use to justify keeping money in VTSAX instead of under my mattress.

dnissley 4y ago
Wouldn't the appropriate analogy to BlockFi be to keeping your money in an interest bearing savings account rather than in VTSAX? Since VTSAX isn't a bank choosing to allocate capital in whatever way they choose
Nursie 4y ago
> providing some value to the world in the form of liquidity and loans. I'm trying to avoid coming across as blaming or rubbing salt in the wounds, but I just wanted to say that the rates they were offering during times of such low interest rates in general, were really be a huge red flag. However you feel about cryptocurrency in general (and it's safe to say I'm a sceptic) you have to look at that and think either that something fishy was going on or they had to have an exceptional business model.

stickfigure 4y ago

Not the OP, but... in the abstract, 10% in a high-risk investment seems pretty reasonable? Sounds like they're young. For someone with a multidecade investing horizion, 10% is a minor fluctuation; the S&P500 is down 17% YTD. To the OP: Why is losing 10% of your investments a pretty big blow? Almost everyone's 401K plunged by more than that this year. If you're young this won't be the last time.

christiangenco 4y ago
OP here! Thanks for the affirmation. My wife and I are 31 so a 10% drop is definitely something we can recover from. We've already lived through this high-risk crypto part of our portfolio falling to half it's value over the last 19 months but the other half completely vanishing overnight has hit me psychologically harder. Instead of the narrative of "sure the crypto dropped in value but it's done that before and gone back up and it's reasonable to think it could go back up again," "now it's on sale," and "time in the market beats timing the market," the narrative is just "it's completely gone because you got defrauded. Here's a list of the specific people responsible. You shoulda been more diligent in evaluating the risk of giving them your money ya freakin' idiot."
- stickfigure 4y ago
  I get it, it sucks, and it feels like you could have made better decisions. Hindsight is awesome that way. Don't beat yourself up over it; at least you were smart enough to make it a small percentage!
- soared 4y ago
  Crypto isn’t a high risk investment though, it’s in a category beyond that. You’re definitely going against traditional portfolio structure by having so much in crypto and are kind of getting what you paid for (risk wise).