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Question: Should i allocate 100% of my savings to bitcoin ?
Yes - 105 (38.9%)
No - 165 (61.1%)
Total Voters: 270

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Author Topic: Should i allocate 100% of my savings to bitcoin ?  (Read 7842 times)
DoomDumas
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January 20, 2013, 08:06:42 AM
 #21

Sure !

Unless you can afford to lose it all over night !

I mean, In my humble opinion, BTC will reach 100$  (before,  ((if it does anytime)) go back to 10$) !

I do invest any $ I can spare on BTC, each month.


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January 20, 2013, 08:58:41 AM
 #22

Diversify, while Bitcoin is a fantastic idea that I'm optimistic about there are things that can go wrong and you also have to take into account incredibly basic things security wise like hacking, nothing much happens now but I guarantee you if you keep a large amount of Bitcoins on your PC with an internet connection someone will eventually sniff it out in the future and you'll be one of those people rage posting on this forum about how you lost all your Bitcoins because you didn't keep them offline.

From the conversation everyone seems to be having I would definitely pick Bitcoin over bullshit like government treasuries or paper money.
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January 20, 2013, 09:16:44 AM
 #23

I mean, In my humble opinion, BTC will reach 100$  (before,  ((if it does anytime)) go back to 10$) !

I do invest any $ I can spare on BTC, each month.
Yes, but the question is if you can cash out once it reaches $USD 100, are there going to be any buyers? Will you put it all for sale on an exchange like MTGox? Can you trust them with a big chunck of your savings? How will you get your money out?

And if you cash out, do you want to put it in gold or silver or FRN? Or back into more BTC?
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January 20, 2013, 10:00:53 AM
 #24

I think the best outcome of this experiment for you in the long term would be if the poll said yes; you then followed it, invested all and subsequently lost it all.  I am not saying this out of malice but because my fear is the more times this kind of thing works for you the more likely you are to think it's a good idea.  If a sharp shock is what it would take you to realise how crazy this plan is then that is what I wish for you.

Unfortunately for you I suspect if the majority said yes and you did follow the advice you would do very well from it if you were prepared to ride out subsequent temporary dips.  But there are also some circumstances the consequence of which would be a non-recovering plummeting Bitcoin value in relation to FRNs.

Some more reasons not to base your decision on the poll results:

  • I suspect a significant number of those on this forum whose judgement you may most highly value won't participate.
  • Those who do may vote in a way that serves their best interest or purely out of mischief
  • As some have pointed out there is no indication in the OP as to your personal circumstances e.g. whether you have dependents, what the ratio of these savings v. the your income (i.e. how long would it take to save the same again), how you personally deal with risk both for your emotional well being for the duration of the highest risk period and for the likelihood of your sticking with your decision if/when the going gets tough.

May I strongly suggest you add a third option to your poll to say:
"Don't be so ridiculous.  Do what you need to do to learn enough about the subject to make your own informed judgement and more importantly do what you need to do to trust your own judgement over random others'."

That's where my vote would go.

Please disregard Litecoin and Zcash badges to the left. I have just gathered they are an April fool's joke!
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January 20, 2013, 10:35:30 AM
 #25

looks like you'll only put 35% according to the poll... probably a good thing.

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January 20, 2013, 12:11:17 PM
 #26

I will give you one of the best advices out there: never go full retard, man.
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January 20, 2013, 12:18:19 PM
 #27

Yes and make sure you buy at full leverage too!  Grin

I hope it is clear I am joking.

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January 20, 2013, 12:20:44 PM
 #28

If you did it a month or two ago you would not have regretted the decision, I don't feel like coins are going up much more they went up to fast.

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January 20, 2013, 12:40:38 PM
 #29

Yes you would, markets are unpredictable on the short term and in a buy and hold scheme allocating all your net worth to one single asset exposes you to two risks:

1) People make mistakes and your analysis could have been incorrect. Spreading your wealth across multiple assets and asset classes makes it exponentially more unlike that a mistake in your analysis casues your entire net worth to evaporate.
2) Markets are irrational and can remain irrational for a very long time while humans have quite a limited lifespan. Spreading investments also helps alleviate this risk.

Of course you shouldn't spread too thin because you are sacrificing return by spreading.

Remember the two rules of investing:

1) Do not lose money
2) Do not lose money

A percentage-wise drop in price needs a larger percentage-wise rise to compensate.

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January 20, 2013, 12:44:43 PM
 #30

I have gambled with my savings and lost before, and believe me its not a happy place to be. Now, for myself, I am reasonably sure that in a years time Bitcoin will be up between 50 and 150% and there is little else that you could invest in that would bring you that return. And I would say little so certain as well.  

But the nature of investments are that everyone is trying to work the magic, and because of this, things are not always what they seem. Risk is hard to assess, you need to include risk of swindle as well as risk of failure. Mass public opinion often turns out to be 100% wrong. My opinion for what its worth is that bitcoin is pretty solid, but be aware that it has suffered massive drops in value before, and if you happen to buy just before one of those your savings will be in trouble. Put everything into Bitcoin? No, do not do that. Its an experiment, and its not even your experiment. Keep some of your savings elsewhere and then in the very unlikely event that something happens to bitcoin, you will not be a completely broken man.

Thats my 2 cents.

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January 20, 2013, 01:57:31 PM
 #31

mintymark, everything you said in your post makes sense, only your use of micro coin in your sig doesn't  Smiley
micro means 10-6 not 10 -3

yep, he wants a millibit

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January 20, 2013, 02:23:11 PM
 #32

Spaceman_Spiff, you are correct about my signature, fixed that!!

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January 20, 2013, 02:40:37 PM
 #33

Yes I do. I've sold my house and been buying at $5, $10 and $13 but I'm a reckless student now so I can afford to lose it all.  Grin

I did some mistake daytrading so now I'm only buying and holding.

Never invest what you can't afford to lose. If you're risk adverse try to diversify especially if you have a family to feed, a mortgage or near retirement. Even if I invested some money with BTCST and GLBSE I've been lucky enough to withdraw just in time. This taught me that most bitcoins should stay untouched on a paper wallet. Now I'm keeping away from all "investing" opportunity denominated in bitcoins.
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January 20, 2013, 03:10:32 PM
 #34

Even if I invested some money with BTCST and GLBSE I've been lucky enough to withdraw just in time. This teached me that most bitcoins should stay untouched on a paper wallet. Now I'm staying away from all "investing" opportunity denominated in bitcoins.

I was pretty lucky to widthraw most of my coins from bitcoinica right before they got hacked, and lost only about 70BTC. That taught me to keep them to myself. Bitcoin is very risky investment by itself, so no need to invest them further, especially when price is rising more than 100% per year. Just by holding them I'm getting more than enough for me.
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January 20, 2013, 06:12:36 PM
 #35

It will likely take some sort of black swan event in order for Bitcoin to reach some of the numbers being predicted here in this thread and elsewhere on the forums.  If you subscribe to this, just read Taleb's book, he even tells you what percentage of your investment portfolio should be allocated toward black swan events. 

http://en.wikipedia.org/wiki/Black_swan_theory

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January 20, 2013, 06:49:32 PM
 #36

Do you like to gamble with your savings? It is historically true that the value of bitcoin, and almost everything else, retraces as it finds new value. A better strategy, in my opinion, would be to buy in small chunks over time. That way, in the unlikely event that price rises continuously, you are still profiting. However, in the more likely event that price drops before rising again, you won't lose so much because you will have better entry points. It is a more balanced approach. Balance is smart when you're talking about your savings.

i'm skeptical about 'price-averaging'. given a stochastic market, aren't the chances that you end up with an average price higher than whatever initial buy-in price equal to the chances that you can achieve a lower average price?

i understand that large buys are prone to slippage, and that is one advantage of multiple smaller bids, but does the technique really average dollar cost?

But by that logic you're 50% likely to lose money as you are to make money in any investment, in which case investing is pointless.

Dollar cost averaging just provides a simple way to buy more when it's cheap and less when it's more expensive, without having to spend your whole life doing analysis, or beating yourself up when you call the bottom wrong.
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January 20, 2013, 06:53:09 PM
 #37



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January 20, 2013, 08:02:15 PM
 #38

It will likely take some sort of black swan event in order for Bitcoin to reach some of the numbers being predicted here in this thread and elsewhere on the forums.  If you subscribe to this, just read Taleb's book, he even tells you what percentage of your investment portfolio should be allocated toward black swan events. 

http://en.wikipedia.org/wiki/Black_swan_theory
Thanks for introducing me to the 'black swan event' concept.  I'm far from understanding it properly but reckon it's worth getting Taleb's book to check it out properly (would you recommend the original 2004 book -which I like the idea of because it was prior to the 2008 financial crisis - or the later 'The Black Swan'?).  It sounds to me like one of those concepts which at first seems to describe nothing new but could well be a concept that draws to itself enough distinct characteristics so as to give the concept the power to allow us to see and understand certain things better.

Your use of it in the case of Bitcoin is intriguing me in that you're saying 'It will likely take some sort of black swan event in order for Bitcoin to reach [high] numbers'.  An example from the Wikipedia entry of black swan events is the rise of the internet yet it is also talking about these things from the perspective of 'the observer'.  To those who were around the net and playing with html in 1996 I would say the rise of the internet was not a black swan event (it was neither one prior to that because it hadn't had the global impact nor since because to those who were around its rise was not unexpected).

I'm guessing if Bitcoin rises as the internet did, with respect to the financial and political worlds who know very little about it, it will indeed be seen to have been a black swan event, yet to many of us here now there would be no major surprises were it to become massive and have huge implications on the way the financial and political worlds work.  And should it do so then Bitcoin being valued at $100 and $1,000 USD are merely markers predicted and expected to be passed along the way.

From this perspective I would say it's getting to the stage where a black swan event such as large-scale unprecedented actions by financial/political powers or out-of-the-blue technologies would be required to prevent this from happening.

Again, I stress I am new to the concept but from what I do understand I read the Bitcoin situation very differently from you so would appreciate any further comment you'd like to make on it with respect to the black swan theory.

Please disregard Litecoin and Zcash badges to the left. I have just gathered they are an April fool's joke!
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January 20, 2013, 08:26:02 PM
 #39

It will likely take some sort of black swan event in order for Bitcoin to reach some of the numbers being predicted here in this thread and elsewhere on the forums.  If you subscribe to this, just read Taleb's book, he even tells you what percentage of your investment portfolio should be allocated toward black swan events. 

http://en.wikipedia.org/wiki/Black_swan_theory
Thanks for introducing me to the 'black swan event' concept.  I'm far from understanding it properly but reckon it's worth getting Taleb's book to check it out properly (would you recommend the original 2004 book -which I like the idea of because it was prior to the 2008 financial crisis - or the later 'The Black Swan'?).  It sounds to me like one of those concepts which at first seems to describe nothing new but could well be a concept that draws to itself enough distinct characteristics so as to give the concept the power to allow us to see and understand certain things better.

Your use of it in the case of Bitcoin is intriguing me in that you're saying 'It will likely take some sort of black swan event in order for Bitcoin to reach [high] numbers'.  An example from the Wikipedia entry of black swan events is the rise of the internet yet it is also talking about these things from the perspective of 'the observer'.  To those who were around the net and playing with html in 1996 I would say the rise of the internet was not a black swan event (it was neither one prior to that because it hadn't had the global impact nor since because to those who were around its rise was not unexpected).

I'm guessing if Bitcoin rises as the internet did, with respect to the financial and political worlds who know very little about it, it will indeed be seen to have been a black swan event, yet to many of us here now there would be no major surprises were it to become massive and have huge implications on the way the financial and political worlds work.  And should it do so then Bitcoin being valued at $100 and $1,000 USD are merely markers predicted and expected to be passed along the way.

From this perspective I would say it's getting to the stage where a black swan event such as large-scale unprecedented actions by financial/political powers or out-of-the-blue technologies would be required to prevent this from happening.

Again, I stress I am new to the concept but from what I do understand I read the Bitcoin situation very differently from you so would appreciate any further comment you'd like to make on it with respect to the black swan theory.


It all depends on your perception of what is more likely. I, for one do not believe it would at all be unreasonable for bitcoin to either:

1. Be 1000/btc +
2. To fail and lose all of its value

Therefore, I do not believe that this analogy fits into the possibilities for bitcoin. Both are almost equally as likely, it just depends on whether corruption and existing power will win out over the possibility of the new and the people.

Bro, do you even blockchain?
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January 20, 2013, 08:45:32 PM
 #40

..read Taleb's book, he even tells you what percentage of your investment portfolio should be allocated toward black swan events. 

http://en.wikipedia.org/wiki/Black_swan_theory
What percentage does he suggest?

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