I might need some pointers, regarding:
"how to NOT become too nervous during times in which the BTC price is going down - like it's falling off a cliff, and when I am assessing myself to be running out of money to buy more?"
hopefully the thing on your back that says "ACME - the name you can trust" has a parachute and not dirty socks.
other than that i just keep in the back of my mind thats its not really there.. ie lost.
but you already know that.
I have never parachuted, but I heard that there are two parachutes, which seems like a good idea, and probably a tactic that should be practiced in real life dangerous situations, too.
If you are considering that HODLers are less likely to get stressed out about paper losses when they are not really calculating how much "hypothetically" had been lost because of some "hypothetical" time that they could have sold at a higher price, then I suppose that makes sense in terms of causing a more sound psychological framework.
And, I supposed another angle could be considering: "I am still in profits" or "the loss could be worse"
Probably, there is going to continue to be certain degree of nervousness, but at some point, either the HODLer has shaved off some of the BTC profits and maybe put such profits in other assets that do not seem to be very closely correlated to BTC's price movements or the perception of the amount of the investment is so low that even something like a 85% price correction is NOT detrimental.
So, let's say for example, a BTC HODLer had invested 10% of his/her quasi investment assets into bitcoin in 2014/15 so total investment portfolio is $100k. $10k in bitcoin (average price of $750/BTC - 13.3333BTC), $20k in various property interests, $10k in bonds, $10k in annuities, and $50k in equities.
Between 2016 and 2017, the value of the whole portfolio goes to $379k by the middle of December 2017, yet that appreciation in value mostly came from BTC price appreciation to $262k (BTC prices of $19,666) while the remainder of the portfolio only appreciated to $117k
(** note for argument simplicity sake, I am giving lots of benefit of the doubt to other (traditional) investments to be generally holding constant or appreciating in value.. and I am also presuming that the quantity of BTC held has remained constant through these various possibly stressful periods)When in late 2018, BTC plummeted 85% (BTC prices of $3,124) and arguably the other investments held constant, so the total value of the investment portfolio became $159k by the middle of December 2017, yet that decline in value mostly came from BTC price depreciation to $42k while the remainder of the portfolio stayed largely constant at $117k
Surely, we might feel better on the day of the BTC halvening when BTC prices were up to $10k, but then plummeted down to nearly $8k, but even with $8k price evaluations for our BTC holdings, our total holdings would have been $224k with BTC value of $107k and traditional assets at $117k.
So, yes, if we HODL through these many volatile situations and try NOT to think about the possible negative situation (on paper) for too much time, then we should recognize that over time our overall investment portfolio is going up with the passage of time, and largely because our BTC investment continues, overall, to out perform various other aspects of our portfolio.
Must be noted that even with this hypothetical (which kind of reflects some of my own percentages), the stressful day of March 12 would have brought our BTC value to the similar valuation that it had been in the lows of late 2018, even if that valuation of sub $4ks and staying in the $4ks for BTC only persisted for a few days, and BTC HODLers could not have been sure about whether such BTC price corrections were going to continue and to cause more stresses.
Even though I am largely HODLing through these kinds of dramatic BTC price movements through the years, I am suggesting that I still get a bit nervous by them, even though BTC HODLing seems to have been amongst the best of portfolio management strategies because engaging in large sales of BTC or anything like that in order to attempt to time the BTC price movements may have caused even more difficulties and stresses unless there had happened to have been some luck involved in being able to lock in some additional profits from those kinds of selling higher and buying back lower kinds of plays.
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