From Hairstylist to Crypto Trader: A Cautionary Tale

Silvia never worked a day on Wall Street. She was a hairstylist to rock stars.

She doesn’t have an MBA but she appeared in the credits of GQ.

She never sat on a bank's proprietary trading desk. She sat behind the velvet ropes in the VIP section of clubs you won’t ever get into.

She was never a professional portfolio manager. She traded crypto on her phone from exotic beaches all over the world and was so good at it, her balances at one point would shame a baby banker.

Then crypto winter came, and Silvia’s wealth disappeared.

She found herself in Puerto Rico, having chased the dream of a crypto utopia but now faced with the reality of having to start all over again. Her story is a cautionary tale of how fortunes can be won and lost thanks to how easy it is for a new breed of retail traders to take on levered positions in the wild markets of crypto.

How did she get to this point?

In the early aughts, Silvia (CoinDesk is withholding her last name for privacy) was a glamorous young stylist, living a colorful life in New York City’s East Village. Married at 21 to a photographer, her life and work intermingled. She wasn’t just working with artists, she was very much part of the arts scene and the fabled nightlife that went with it back then.

When musicians needed to a cutting-edge look for their promo pictures, it was Silvia’s haircuts they wanted. Over the years her scissors have cut the hair of the Red Hot Chili Peppers, Jack Antonoff and King Princess. When high fashion magazines – Vogue, I-D, Vanity Fair, GQ Style UK, Interview and The New York Times Magazine, to name a few – did editorial shoots, Silvia was often their go-to person for hair.

Love versus bitcoin

A few years later, long after her marriage ended, Silvia dated a coder. It was 2015.

“He was interesting, he was smart and he was moody,” Silvia reminisced. “One day he was brooding around the house telling me that he had some serious regrets about not investing in bitcoin several years earlier. I'm very optimistic and I always see the bright side of things. So I just said, ‘Well, what makes you think you missed the boat? Maybe the boat hasn't even sailed yet.’”

That’s when Silvia opened a Coinbase account and bought a single bitcoin for less than $1,000.

The volatility was too much for Silvia’s boyfriend. “He told me to sell,” she said. “I sold at a loss, which really bummed me out.”

Shortly after, Silvia made a decision.

“I had to break up with him. What choice did I have? What I mean, come on, when you're not on the same page as a couple,] we all know where this is going. If he wasn't on the same page with crypto as I was, it was doomed for failure. So I kept investing. I moved on. I never looked back.”

Seacoast sunshine and crypto winters

By the end of 2016, bitcoin was on a tear. “I felt for the first time the euphoria of a crypto rally,” Silvia said. “It was so exciting. I decided to get an apartment in California.”

Then the crash of 2017-2018 happened and she was paying hefty rents on two apartments, one in downtown Los Angeles, the other in Manhattan. Yet not only did she keep her apartments, she held on to her crypto, never selling.

That turned out to be a winning strategy and by 2019, Silvia, ever the free spirit, was on the move again. This time running off for a few months to her ancestral hometown of Lipari, off the coast of Sicily. Toward the middle of the year, as bitcoin neared $13,000, Silvia returned to New York.

COVID-19 struck less than a year later.

“After that, I started paying attention to the prices because they were jumping around, it seemed like another exciting time was happening,” said Silvia. “Then I went in all the way headfirst.”

The technical trader

As bitcoin bounced from its March 12, 2020, bottom, Silvia dedicated her time to learning about trading crypto.

“I was trying to educate myself. I was learning how to set up bots. I was watching a lot of YouTube. I was on a couple of Discords. It seemed like there was a lot of enthusiasm at that point.”

She followed the gossip. She also learned technical analysis.

“I had a couple of courses that I was following,” Silvia said. “I was looking at volume indicators, RSI, things like that.” (She means the relative strength index, a technical indicator, not repetitive stress injury.)

“I can't say I was an expert, so let's be real here,” she added modestly. Nonetheless, she quickly became wary of advice from online technical analysts. “Whenever someone's talking with a lot of conviction, that's how you know it's probably going to go the other way.”

It wasn’t just the charts Silvia studied. She began reading up on projects such as Solana, Avalanche and, fatefully, Luna. Things were going so well that she bought a one-way ticket to Mexico.

“I didn't even bring my computer,” she said. “And good things happened. I was swing trading. I did very well.”

The San Juan crypto dream

Beach life in Mexico wasn’t enough to keep Silvia from being homesick. Four months later she flew north to spend time with her parents in New Jersey. It was June 2021 and one of her sisters, a forensic accountant, had an idea.

“She suggested after all of my adventures and crypto trading through my phone and traveling through Mexico, that I go to Puerto Rico, because there was a big community there that was doing this as well,” Silvia recounts. “So I got on an airplane the next day and I went to Puerto Rico for six days. I met a lot of really interesting people. I met a really nice Colombian girl on the beach, who was very gung-ho about me moving there so we could hang out. She ended up being my friend. She helped me move. She took me around to all the stores to get things from my new apartment, which was right on the beach.”

What Silvia found in San Juan was a city that combined crypto with fun. She described it as “paradise” where everyone seemed to be talking about crypto.

“It's exciting, when things are going great – everybody's happy,” said Silvia. “There are kite-surfing classes happening on the beach and crypto business meetings also happening right on the beach. There are lots of meetups. There are lots of conventions that happen at beach clubs.”

Puerto Rico’s capital city was teeming with crypto enthusiasts of all stripes.

“There's a whole cast of characters down there that are really awesome,” she said, including New Age-y “crypto wizards” who trade based on phases of the moon. “There was actually a full moon party in front of my little apartment every month. …There's full moon parties. There's drum circles. There's recreational marijuana. Lots of Medalla beer.”

There were other types of moon worshipers, though, many of whom were in their 20s. “I actually met a lot of really enthusiastic young people who were super bullish on luna and I think about them all the time because I don't know what happened to them … Poor kids.”

As many readers know, luna was the “staking token” for the Terra protocol, backing an algorithmic stablecoin called UST. In May, the luna token could not keep UST in line with the U.S. dollar, the fiat currency it was supposed to mimic. The subsequent $60 billion collapse led to a meltdown of the crypto market.

Older folks as well could be found trading crypto in San Juan.

“Lots of retired people who had just discovered crypto who were DCAing [dollar cost averaging] at the height of the rally – probably losing their mind right now,” she quickly added as an aside. “There was a lot of people leaving everything they knew behind to move to Puerto Rico … a lot of people even ended up moving there with spouses and then things don't work out.”

Leverage and a falling market

Coinciding with the fantasy life on the beaches of San Juan were the fantastic gains Silvia was achieving trading crypto. Documents reviewed by CoinDesk showed stunning, quadruple-digit returns and breathtaking balances over a short period of time. At her request, we are not publishing screenshots nor revealing the precise amounts but suffice it to say, the unrealized gains were impressive – several Lamborghinis worth, by our math.

Like many other retail crypto traders, Silvia began dabbling with leverage trading and options after hearing about them from other traders. These strategies worked until they didn’t.

“I was really out of my comfort zone,” Silvia recalled.

She then learned the hard way the dangers of leverage when the market goes against a position. Luna spectacularly imploded, wiping away tens of billions of dollars in value from the market. Silvia’s unrealized fortune disappeared, as did those of many others trading alongside her in Puerto Rico. The mood shift was palpable.

“You could just tell that the morale had changed,” she said. “ There was an era of sadness.”

Silvia and others were crushed. “Lots of sleepless nights,” she remembered. “I heard of a man losing nearly $80 million in luna, of all things.”

Exodus from crypto paradise but not crypto

Earlier in September, Silvia finally got her things out of her place in San Juan and returned to the New York area. She has the tools of her trade – a collection of scissors, combs, hair dryers and makeup – that paid for the initial capital she used to invest in crypto.

Looking back, she marveled at her story. Being a woman day trader made her stand out in the male-dominated crypto markets, but so did her life story.

“I think I am a little bit of an unusual story,” she reflected. “I don't think there's that many artists who were involved in crypto from an early stage, who can say they packed their bags and moved to a crypto Mecca.”

Silvia is still HODLing bitcoin and is optimistic on ether. “That’s my jam.”

“I’m going to be in crypto forever. I’m not getting out. Let’s be real. I’m a true believer.”