Yeah... it can be difficult to measure the extent to which we might be over or under 1% of world-wide adoption, and even those who own bitcoin, might not really have self-sovereignty over it if it is on an exchange or owned through an ETF.. but it still might count for something of owner-like - especially to the extent that it is backed by actual bitcoin that is not being fractionally reserved and/or double/triple (or more) counted.
For this group of people I would still count them. I acknowledge that self-sovereignty is not that easy, especially for groups like the elderly.
A few years ago (it may have been in the summer of 2021), i was talking to one of my relatives, and he had become a recent entrant into bitcoin and shitcoins (mostly shitcoins) and he was calling himself a crypto influencer, and he had not even been involved more than a year. I asked him about one of his shitcoins, and he said that he was planning on holding it "for life," and I was quite surprised, since I was trying to let him know that he is not investing, but instead trading if he is not willing to hold for many years, perhaps a cycle or two.
The next summer when I saw him, he had sold all of his shitcoins and bitcoin, and he was being a bit coy about whatever he was doing.. like he was not involved in any of it anymore.. so surely he did not have any stamina, and a bit embarrassing to try to talk with him, since he acts a bit like a know it all type, and that did not really work out for him very well in regards to whatever he was trying to do in "crypto," and he did not seem to understand the difference (in any experiential sense) between investing and trading.
These people are a bit funny but also sad, they do come in many variations of this type though..a lot of people think they are geniuses with their shitcoins and when that ends up burning them they sell Bitcoin too and put it into the same category of scams. Unfortunate but nothing can be done about it really. You can fix some people that you meet in life as a person, but most you can't and the world definitely not.
Accordingly there is a difference between earning a living outside of investing or believing that you are going to earn a living (or gain income) from trading when there may or may not be a good income source to supplement that trading behavior, that might not work as well if money is needed to draw out of it to be able to pay for living expenses.
This one is definitely not something that I would recommend because of the data that I have provided but also other studies. The odds are stacked against you, the failure rate is similar as with startup businesses. Many of these would never take the risk of opening a business but somehow marketing tricks them into believing that they can make it by trading when the risk is the same or even worse!
There can be ways to make trading sustainable, but frequently there needs to be some way of supporting oneself with a fund that is not put at risk and then figure out ways to build the trading fund separately. Like you suggest, it might not be a very good quality of life to be trying to build up a trading account.
Yes, I would consider it more sensible to take the risk with this if you had other sources of income. Still I would limit the involvement until or if it works out really well, only then would I consider it worthwhile to invest more time into it. Really very few people in the world should try to do trading as a career.
I have heard some strategies that are similar to my own.. and some folks complain that mine is overly complicated since it focuses on bottom prices (such as the 200-WMA) to valuate holdings and action versus focusing on spot prices.
So surely guys use the spot price and use something like a 4% withdrawal rate, and I was doing something similar until I realized that using the 200-WMA was much more useful, and stock to flow (plan B) likes to use the 200-WMA too... but yeah, I might have come up with my own way of framing of the matter that can resonate, even though I still claim that it is not completely original, since it is a spin off from other approaches that I have come across over the years
Complicated
Your strategy is elegantly simple, it is almost beautiful.. I find it very strange that someone could call it complicated.
It is likely that we hedge our future in various ways, and yeah when it comes to investing, we also likely hedge... since we can have base case scenarios and then various back up scenarios, and sometimes some version of our base case scenario plays out and other times we might enter into realms of our hedge.
You are right though that we have to take action, and we might have a lot of mediocre choices, yet surely many of us have concluded that bitcoin is not a mediocre choice, so in the sense that bitcoin has come along, we may well have gotten lucky to have such a choice in front of us, and still some folks still either remain on zero or way underallocated to bitcoin. There is ONLY so much that any of us can do to convince others to include bitcoin in their path forward, whether their initial allocation is 5% to 25% or some other amount that they deem suitable.. .and for years, staying on zero has seemed to have not been a very good path forward, even though something like 99% of the world's population remain at zero or somewhere close to zero allocation into bitcoin.
Strong agreement here, I actually wrote a response that would be appropriate for this part before I read it. There is only so much that one can do and over the course of our lives we will only manage to convert so many people. Some don't get it. They didn't get it at $100, they didn't get it at $1000, $10k, $100k and they won't get it at $1m or $10m or more. There will always be an excuse that they will have for it instead of simply admitting that they don't get it!
Some people might start in bitcoin with a very timid approach, yet their timid approach could incentivize them to investigate more, and as they investigate more they become more and more aggressive with their bitcoin investment.. so even if these days I am recommending that guys try to get to 5% to 25% allocation into bitcoin, prior to 2020, I used to recommend that newbies shoot to get to a 1% to 10% allocation into bitcoin. I upped my recommendation of an initial bitcoin investment target based on changed circumstances in the world, and sure bitcoin has grown since 2020, yet still bitcoin has not seemed to have had grown anywhere near the levels that it could have had grown.. It just takes time for growth to happen, even when world events seem to justify greater and faster growth, yet bitcoin remains a bit of a niche, even though the word bitcoin is better known since 2020 as compared to before 2020.
The gradual increase makes perfect sense to me. Imagine if we reach the point where the world is on a Bitcoin Standard, obviously we won't recommend newbies to allocate 1% into Bitcoin.
I just tell people to adjust your expectations. Whether something will work out financially does not determine whether it is a good idea or not. Life is not that simple.
Herewith I want to say the following. Is putting money into Bitcoin a good idea? All the data points to that it is a great idea and this is with putting aside any philosophical or practical usefulness of decentralization, freedom, self-sovereignty. We just consider financial data and economics. Does that mean you will profit off of it or that its continued rise is guaranteed? No. Speaking from some point in the future.. If you did not make a profit on Bitcoin, does that mean your past decision to invest in it was a bad idea? No!
If you adjust your expectations and understand the world the correct way, nothing can go wrong here. If things don't work out, sure you lose some fiat but you took the best decision possible at this point in time. I mean what else would you put your money in??...In ancient Japan there was once a very wise sage who said something roughly translated to... there is no second best.
