I think the scenario analysis helps. Let's say that you have $85k = BTC100 if fully invested, and you would "like" to invest $50k at 500 so that you could have BTC100 and have some fiat left over. What can conceivably happen?

- Bitcoin just rises and rises to the moon, and you still have $85k and no coins.
- Bitcoin rises and you panic buy at some higher amount, for example $1,000, get BTC50 and retain $35k.
- Bitcoin crashes and your bid fulfills at $500, and you retain your $35k.
- Bitcoin goes to zero.

From here on, it is up to your personal preferences. Try to think about utility, and not fear and greed. For example, if bitcoin actually goes to the moon without stopping, it is nice to have BTC100 but perhaps BTC50 or even BTC25 would give almost the same utility, since they are so valuable. But if it goes to zero, or crashes towards it viciously, it is much better to have $35k than $0 as your cash balance.

I aim to keep my bitcoin position in 60-80% range. If it goes over, I sell and diversify. This also helps in the pullbacks, it is both easier to sleep after having cashed out, and also makes it possible to reinvest into bitcoin if it tanks hard with no fundamental reason.

It does not really matter what your allocation is now, and whether you are "in the process of a trade going sour" or not. Just decide where you want to be, should any of the scenarios happen. If possible, try to think which one of them is more probable, but do not neglect any of them. Then buy/sell your bitcoins so that the position is most suitable for everything.

If everything that can happen is something you have already planned for, you do well in all situations and cannot really lose. This is wise position management, and opposite to gambling. Even prediction has very little to do with this.

I have a purpose why I write these things, it is either to learn, teach or have fun. Your continued pestering in Adam's thread made it difficult for me to do any of these. Every time I posted something, you would derail it from the issue to some of my personal quality or quantity. It looked very stupid that you among the hundreds that regularly read the thread, could not even understand my prominent position in bitcoin economy, and distracted the lurkers that are my main audience anyway. So I provided proof that I have 50 times higher trading volume than you have in Bitstamp, after which you promised to apologize. I sent further proof about successful trades in Mt.Gox, but instead of apology, I received more insult.

Now, I am not sure how to behave towards people whose turnover is 50 times bigger than mine, ie. approximately 700 million dollars per month. Such people do not even exist in Bitcoin. But certainly I would try to weigh my words very carefully to respect those people's high position and to maximize the learning benefit I get from the encounter. If I have wronged them by behaving stupidly, I would be quick to apologize after learning my wrongs.

According to research, people - rich and poor alike - are able to maintain only about 150 acquaintanceships. It is not always the case that the rich are pompous asses, but they do have it considerably harder regarding whom to let in their inner circle, and even whom to interact with at all. Every person has the same amount of time, but the rich have many more opportunities to choose from. I have chosen to share my insights here, and will do it as long as it serves any purpose. You are currently banned from my threads, because I see no purpose in interacting with someone who promised and owes an apology and refuses to fulfil it.


This is an example of how I would like to be addressed.

All probabilities are against me that it would even go to 600. So I would be delighted to have gifts if it goes below 500 intraday in Bitstamp. If the year passes without this happening, the remaining stash makes me so rich that I can send gifts to my friends

My taste is "traditional Cuban" - aromatic, balanced, not very strong. The cigar needs to be big (thick) enough to realize the flavour, petit corona (44) size is the minimum. Usually I buy the top end of the range and only a few at a time though, because I never know when I develop a new hobby...

Not really Except that personally I don't like to see me in a position where buying back at a loss is the wisest choice (regardless of the future price development). Therefore I don't get into that kind of position, and I am not now in such a position. Actually only once in my life I have bought back at a loss. This was at $195 after selling some at $130, and was obviously a stellar decision. Selling at 130 was the misinformed decision.

My "problem" now is that after analyzing the exchange rate developments from April to this day, I still regard it as quite possible that we see a crash to 400. It will require a negative event, but there are many negative events in store for Bitcoin


I am trying to get the thread back to the discussion of other people's investment strategies. If we keep on discussing of my position only, it gets tiresome, because the position is quite slow moving. Even if you suddenly see 400, you can just be "yawn, wonder whether rpietila got 60% or 70% of his maximum buyback of coins and whether he is now 60% or 70% invested). I am sure many of you have more interesting things to show! Sorry if that sounded like patronizing 

If ever I send you a gift, the price will be determined in Bitstamp

The silver market is nearing the inflection point much faster than gold. The deliverable reserves of silver coins and bullion worldwide are something like 500M oz, so about the same market cap as the total number of bitcoins.

In March, 2013 I made a public bet for a sum of 7 bitcoins (<$1,000 back then). I got a call from the police, because soliciting public bets is illegal where I live. Therefore I have to structure all bets as financial instruments and have them in the books of my company in another country. And to make this profitable for me, they have to be for a quite large amount, and also give better odds than I could have just by using other options at my disposal.

So this ain't so much fun as it should be

The wisest choice would have been to delete your post, just because it tends to degenerate the thread to endless and fruitless debate over my investment decisions. One of the reasons this was started is that you can keep discussing about me in Adam's wall observer.

Why is it fruitless? Because I already have my own strategy, I have told it to you (buy back some at <$400 if it is visited, otherwise nothing).

Why is it endless? Because I have said that 400 can happen any time before March, and probably only in June I will remove the bids, giving it up and keeping the fiat. The average attention span here is hours, not months.

So there is no point in asking every time it goes up/down, if I have bought or will soon buy back. What determines my buyback is the price, not the time. We have had this same talk numerous times, and could have it many more times, but it does not add anything, nor change anything. I am past the point of having the highest number of bitcoins that I will ever have (probably).

So how about everyone adding something of value to the discussion?

I don't know what is so scary about it. Some people just manage the wealth better. Consider a family of 10 people - the father manages the wealth for the benefit of all.

To achieve a flatter distribution, you should restrict the very poor from buying, because it creates the excessive differences in bitcoin balances.

Meh, this is discussed to the death. To all readers: buy your way to the level that you want to, taking into account that you need to sell minimum 70% of the coins before it's all over.

I still need help for the user figures of the relevant services discussed in this thread! Cannot update without this info.

I have been busy with other matters, and have not updated the analysis on price. It is not a big deal really - if it goes to my buy zone, I wake up and see that I have bought. If not, I will keep the cash. I am not buying anything above 500 for sure, that zone is for newbies

Either way I make a profit. If it goes to 400, I make more coins, if it doesn't, I make more dollars.*

*Compared to the average dishoarding schedule.


Besides I already made that dip by selling 900, buying back 500. Everything else is extra.

Physical silver net investment demand per annum is about 50M oz (0.9B USD). This is way less than what was invested into Bitcoin in 2013 (2.5M USD) and way way less than what is expected to be invested this year (~30B USD).

A large percentage of those who invest in bitcoin are people who have been interested in monetary systems for a long time. They often hold gold and especially silver. Many sell their silver holdings to buy more BTC (including me and the owner of the thread). This reduces net investment demand.

Nobody is interested in investing in silver now. Especially no new breed is coming. The only ones that could be investing in silver are those who have made a killing with bitcoin and are looking for ways to diversify some of the gains. Silver could be a way to do it. I am in the position to do it. I am too busy to do it. Therefore people in my position are not doing it. Therefore no one is doing it. Therefore the price has more room to drop despite the fact that bitcoiners could buy many times the yearly net investment demand. As long as they choose not to do it, there is no hope for silver.

If one knows when it is applicable to look at one's own behavior and deduce general truths from it, one is quite a smart guy.

Your behavior is not fitting for a moderator.

What makes you think your comment was worth writing and posting to everyone?

I don't have much time to buy silver now, so the price may go deeper. But if there is some demand for silver in the future, its price will reflect that demand. All in all, there is still quite much silver aboveground. I recently estimated that 400kg of silverware is required to furnish my castle, to reach even half of the silver/sqm ratio of what I have in my current premises.

I warmly recommend this also. If you are reading this, you know enough about bitcoin already. Now go to work, earn money and buy as many bitcoins as you can during the next 6-12 months. Then start reading forums again

As little as 8 months ago the value of gold alone ($300k) was considered insane by most. The thread outlining the $1M scenario (actually it is $5M but it is adequately triggered when the price reaches $1M) gives more background.

Yesterday was the venerable Behike 56, today something less. Chaga tea is a good companion, preferably lukewarm, but because of laziness, I usually drink it cold. Our tea dates back to the foundation of Silver Club in 2010, so it has some special energy in it.

David brought about the issue of The Chasm, and I would have liked to see some comments on it. I don't have an opinion, except a mild hunch that 2012 could have been a sort of chasm already.

As for the current price, I see no indication that the train is abruptly about to leave the station. Making an ATH so that it is clear it's not a double top would be a confirmation. Then it would be possible to get 66% of the coins relative to buying now. But waiting for 400 would net you 200% of the coins, which is a more interesting proposition for me, and should be for those who already have a position in bitcoin.

As for the superexponential trend some have been suggesting, we already lived through one in 2010-2011, but from the hindsight it has been called a bubble. I think betting for a short-term superexponential trend is not very intellectual if you don't honestly think it will go all the way to the logical end, which is the destruction of the fiat system this year. Otherwise it is likely that you end up buying rather high, and need to guess the top (even if you are right about the short term rapid growth). If not, you only end up buying rather high.

I want to underline that I think 99% of the people should not pay attention to the short term fluctuations of the price. At the instant when you are ready to buy in, do it. Then only accumulate the position whenever you feel like it and don't sell (regardless if you feel like it or not). Then after you are sure it does not make sense for you to buy more (because you already have so many that having more would not matter), construct a diversification schedule to sell a fraction every time the price reaches a certain milestone. Make it such that you have a comfortable number of bitcoins left when the price reaches $1 million. If you have BTC10 now, I advocate to sell anything between BTC5-BTC9 during the runup. Make the plan, and stick to it. After you have started selling, I don't advice to buy back even if the price goes down. Enjoy your gains rather.

Ettei kellekään jäisi epäselväksi, niin vakuutan, että vaikka olenkin karhu, en ole KARHU. Hauskaa trollia!

The General Supernode Meeting will be held in Tallinn, Estonia, starting 18.1.2014 at 12:00. The invitations have been sent.

This is just wow. I would never have thought that bitcoin could have had so many users already in 2011. Even now I distrust the numbers because there has to be a lot of double-counting, but... that $100 would have been crossed only in 2013!!

The person who helped me into bitcoin told that it's very simple - the system will always be worth about $1,000 per user. At the time the market cap was about $500k, so that implied 500 active users, we thought. According to this data it would have been more like 10,000!

Now this raises again the doubts, whether there will be a gigantic asset bubble in bitcoin in the near future. (I almost thought that we could avoid it based on the fact that bitcoin is so much more valuable than anybody can think, and thus cannot become overvalued  ). 

If I use all the data since the beginning, there seemed to be 1.73x faster growth in market cap compared to the # of wallets. If the data before 6/2011 is left out, this is increased to 2.68x.

With the 1.73x growth factor, assuming that both trends stay the same, the projections are as follows:

12/2014 bitcoin price 3k, users 35M, per user 1.2k
12/2015 bitcoin price 32k, users 145M, per user 3.2k
12/2016 bitcoin price 344k, users 596M, per user 9.3k.

Looks interesting.