What to know about the crypto-craze before it implodes.
Bitcoin’s wild year has turned a lot of speculators (and cryptocurrency true believers) into paper millionaires (or, at least, hundred-thousand-aires). But how are people actually spending their crypto gains? Below, six New Yorkers talk about what they’re doing with their bitcoin winnings.
Matt Russell, lives off of his bitcoin:
“In 2013, I paid $120 for one whole bitcoin. In February 2015, I sold my apartment, got the proceeds, and immediately turned around and bought $50,000 of bitcoin over the course of the month. By March, I was buying T-shirts with bitcoin. I bought socks. I bought gold. Like gold coins. I bought a high-powered blue laser from some crazy laser company for $400 in bitcoin. You had to put special glasses on to even use it, so it wouldn’t burn your retinas. It sat in my closet for a few years. My premise was, I just wanted more and more people to use this so we could all be in this collective consciousness of how this works, to get to the next stage of monetary freedom. I started running out of money from my savings right as the value of bitcoin started to dramatically increase, and I’ve lived off of it for two years. At this point, I’m comfortable enough where I do not have to worry about living for the next five years, and I’m probably underselling that. I live by myself; I rent in Gramercy; I don’t live a very extravagant life. With bitcoin going up, the most extravagant purchase I’ve made is the Arne Jacobsen egg chair from Design Within Reach. But I waited until it was on sale. I don’t want to buy another apartment or a Lamborghini, which I could. But I am also about to take possession of a Keith Haring print that I just purchased from an art gallery downtown. I wasn’t dressed to the nines when I walked in, but when they asked for my budget, they were like, ‘Oh, okay, we think we can do something.”’
Jon and Samantha Fox, husband and wife, entrepreneur and finance worker turned stay-at-home mom:
Jon: Around nine months ago, we sat down one night and learned how to log into Coinable to buy some bitcoin. It was around $3,000. We bought about ten bitcoins, so we put $30,000 in the market. And then we quickly transferred some of that to ethereum; we spread it around a little bit. We bought some ethereum classic, iota, ripple.
Samantha: Every time we purchase cryptocurrency we discuss it beforehand. Jon comes to me with an idea, and I usually play devil’s advocate the whole time, and if it sounds good to me after I’ve gone through as much technical analysis as I can, then I’m like, “Absolutely, let’s do this.”
Jon: Oh, I didn’t know she had gone through all those gymnastics on it. My memory is, I said, “Hey, babe, I want to get into this,” and she’s like, “Cool, trust you.” I would say we have a very high risk tolerance. We’re not gambling our retirement money, but we can afford to be wrong.
Samantha: We got an email from the Montessori school saying that they accepted bitcoin for tuition, and it was a no-brainer.
Jon: We paid it all at once a few weeks ago, the day they accepted us. When you live in the city and you get your kid into the school you want to go to, you don’t hesitate. Somehow, sending $33,000 in bitcoin instead of writing a $33,000 check feels like Monopoly money, like free money. The school sends us their 30-digit code, I log into my Trezor, send the money to this code, and it transfers. I don’t think it’s going to eclipse the USD dollar anytime soon. But at some point, we would switch everything over to cryptocurrency.
Samantha: We’d have to discuss that.
Dylan Chenfeld, musician and T-shirt designer:
“I was briefly working for Universal Records in midtown, and I was joking with one of my best friends about how I had some money to spend for a hot second. He said I should just buy some of this crypto stuff. It wasn’t as formal as a stock-trading tip, it was like, ‘Oh, give me your computer and we’ll do this real quick.’ Buying ether back then, in 2014, you had to download the ethereum node, which interfaced with the blockchain — you can still do this, but it’s beyond hard. I bought some ether when it was $15 a coin. I do probably an hour a week of crypto. I’ve got a bookmarked folder with some serious crypto traders, I follow some on Twitter, and I’ll hit the Slack exchange and see what the New York cryptoheads are doing. Right now, I’m invested in nine kinds of coins, all in. I’ll probably cash out my big bags in 2018. This hasn’t changed my lifestyle, though. I haven’t made buy-a-house money; I’ve made ‘finally pay for my apartment on Avenue A for a year’ kind of money.”
Owen Doherty, barber:
“Two years ago, my dad started chirping in my ear about this stuff. He’s the most non-technology-savvy person ever, but he always talks about how in the ’90s he missed the internet boom, so I told him I’d look into it. I was reading a lot of stuff on Reddit, watching YouTube videos, listening to podcasts. I had a friend who’s a lawyer look into it, and when programmer clients or finance clients came in for haircuts, I’d ask about it. But no one knew anything beyond what you could hear in a podcast. When I finally found an exchange to buy ethereum, it only let me buy $500 at a time until I verified my identity at more levels. Now, the amount of clients that come to me for advice, I feel like a veteran in this game already. The money is a long-term investment; I’m not using it. It’s too volatile to want to spend it. Cause you know, today you spend it for a $30 haircut, but in a year from now that $30 could be $3,000. So until that currency becomes more stable, I’m not going to be using it on a day-to-day basis.”
Christina Lupinacci, assistant GM at the Knitting Factory:
“In 2013, I bought a tenth of a bitcoin, but just to get a meme coin called dogecoin, based off that Shiba Inu meme. It was a joke, and I bought it almost for research purposes, just to dabble. Anyway, then I forgot about it. Then in 2016, a friend posted some article about bitcoin on Facebook, and I was like, ‘Oh, yeah, whatever happened to that?’ I realized the prices had gone up significantly, and then I found my wallet info and I was like, ‘Oh, cool, I still have some bitcoin. Cool.’ I cashed out some of it over the summer to pay off student loans. It was significant to me, but now I kind of regret doing that.”
*A version of this article appears in the December 25, 2017, issue of New York Magazine.