- Dave Portnoy lasted just over a week in the cryptocurrency space
- Portnoy quit when his investments went down having bought at the top in almost every case
- His example is symptomaitci of the amateru, short-termist thinking of many newcomers to the crypto space
Dave Portnoy’s swift entrance and exit from the cryptocurrency space this month has reinforced two things – he isn’t the world beating trader he thinks he is and the crypto market is still full of short term thinkers. The Barstool Sports founder, who has made a fortune in the stock market riding the recent rebound, sold out all his crypto positions after a small loss last week, highlighting once again how many of those who come into the cryptocurrency space simply aren’t ready for it.
Portnoy’s Crypto Experiment Lasts a Week
Portnoy, the multi-millionaire founder of Barstool sports, joined the crypto clan for the second time last week when the Winklevoss twins helped him buy Bitcoin and Chainlink. Many in the space hoped that his introduction into the crypto space, after months of being pestered to do so, would lead to a massive influx of retail investors into the space and the resultant pumping of their bags.
Portnoy put $50,000 into LINK and $200,000 into BTC at a time when both were riding high off recent pumps, with LINK especially having enjoyed a 100% pump in the ten days leading up to Portnoy’s buy in. A few days after this he announced that he had also bought into OXT, seemingly showing that he was getting more into the space.
Portnoy followed these purchases with Twitter posts calling for the moon for all his tokens, but things soon turned sour. After hitting $20, LINK crashed 27% within a day and a half, while Bitcoin fell from $12,400 to $11,400 around the same time. OXT also failed to do what Portnoy ordered and increase in price, probably because it had just pumped 5x in the three days prior to his buy in.
What Goes Up…
On Friday Portnoy confirmed that his short-lived crypto experiment was over and that he had sold his entire portfolio at a loss just days after buying in:
I currently own zero bitcoins. I will wait and watch. I lost 25k. Just like with the stock market it took my brain time to figure it out. I know this. The Link Marines are weak and the orchid flowers do die in the crypto world. I may or may not be done. #bitcoin
— Dave Portnoy (@stoolpresidente) August 21, 2020
Portnoy’s “stocks only go up” mantra, while being tongue in cheek, reflects the thinking of many who get involved in the trading and investing sphere at the right time. Portnoy got involved in the trading game in March when the market was at the bottom of the coronavirus-inspired correction. He has ridden the ensuing rebound all the while since then, leading to a feeling of invincibility, something that those who joined the cryptocurrency bull run in 2017 will recognise.
However, every upward spike naturally ends with a correction, but this was something that Portnoy was blinded to due to his lack of experience, the same as many in the crypto space were when 2018 hit. His lack of experience showed, particularly with the LINK and OXT purchases, but he tried to explain away his actions in a later video in which he said had been “buying the top” of stocks for the past six months but that they have just been making new tops, an attitude he took into the cryptocurrency space – and lost.
Crypto is Still Amateur Hour
The fact that Portnoy leapt into the space with a quarter of a million dollars and bought coins that were already hundreds of percent up is testament to the unregulated nature of crypto and those who join in with little or no experience of trading. The fact that he refused to hang on longer than four days because his investments had gone down also suggests that he isn’t suited to the crypto world, or trading of any kind when it isn’t in the midst of an unstoppable bull market.
For all the bluster and showmanship, Portnoy is clearly a man who got lucky with his timing of his entry into the stock market and is symptomatic of the short-term thinking that is prevalent among newcomers in the cryptocurrency space.