I guess that part of the problem that I keep reading between the lines of your factual representations is that you still seem to be in accumulation stage of your BTC investing..
I'm in the accumulation stage of
everything investing
I was really starting to lean towards that assumption, so good to have you clarify that point.
even though you are not sure if there might be a better investment out there.
Chances are nothing else is better, but it's a lot less risky.
If we say that another way. The upside potential to bitcoin seems to be better than any other asset, but bitcoin has a lot of volatility - and a sense of NOT being guaranteed.
Well of course, there is no real guarantee to any investment, but if they have been around for a while then you can get some decent ideas regarding direction and degree of volatility.
if you invest in dollars - you are almost assured of stability and gradual downside losses.. whether that is 2% per year or 20% per year might depend on your basket of goods.
if you invest in real estate - you do have some loss of liquidity and mobility and a lot of costs in acquisition and selling, and also many of us know that real estate prices have been artificially pumped beyond their true value due to debt issuance and lots of dollars being available and surely they are being used as a storage of value, even though they are not very useful for that storage of value purpose.. but it is still happening
if you invest in equities.. same issue with the propping up of value being connected to irresponsible monetary policies (fiat printing)
if you invest in gold, silver or some other PMs..... paper versions of these cause for manipulations that are not necessarily connected with quantity of supply - so one thing with BTC is that you can immediately claim possession of your BTC - and much more difficult to immediately claim possession of various PMs that you might buy and maybe you would not even know what to do with them if you got possession of them, so in that regard, bitcoin is a minimum of 10x better than those various PMs and may well be more than 1,000x better than PMs in terms of verifiability, portability, divisibility, and not having to suffer the various seemingly excessive costs of third-party involvement in trying to manage such supposed holdings of PMs as compared with BTC.
Of course, there are other kinds of assets, and it may well not hurt to stock up on some things such as guns, steel, butter and various kinds of useful personal properties, yet I am not sure how much preparation should be put into the various shit hits the fan scenarios.. but there could be some scenarios in which there is usefulness in having other assets besides just bitcoin and cash.
Furthermore, there is a kind of screaming for DCA’ing in your circumstances, even though you are proclaiming that you prefer lump sum investing, and like I mentioned, I have no problem with lump sum investing, even while it has to be put in a proper context.
My point wasn't that I'd dare to go lump sum, my point was more that DCA is
only better than lump sum when prices are dropping.
My point is that it is way too damned difficult to know when BTC prices are dropping while we are "in it" versus looking at the matter "after the fact." So we need to act now based on what we know, and I personally believe that it is too god damned stressful to allocating too much of your investment strategy in trying to figure out which way the BTC price is going or might go... so sure, you can strategize with part of your investment value in terms of trying to buy dips, but in the end, DCA is proven to be a damned good strategy overall in BTC because BTC has a tendency to go up in the long term, and you have already admitted to me that you believe that BTC is the best of investments.. therefore, you believe that in the long run BTC prices are going to be higher relative to other investments. You need not say no more, DCA'ing would be very, very good for you... because just like the rest of us, you have no damned clue about BTC's short to medium term direction, even though you have a pretty strong hunch that in the long run.. let's say 4-10 years or more, BTC prices are going to be higher than they are now, and also likely higher than any other investment that you could make.. and of course, none of us knows for sure (except at some point we are going to be dead), so we just have to make our BTC investment allocations and strategies based on what we currently believe that we know to have the better of the odds forward.
But if prices are dropping, not investing at all is even better. Of course you can't know that, so DCA can be a good compromise. I'm currently doing it into VWRL, even though I'm pretty convinced most of the stock market is overvalued.
Ok. so you do have some other investment(s) besides BTC and cash.
That VWRL just looks like some kind of general index fund into the stock market, and sure no problem having some amount of value going into that kind of investment.
When I got into bitcoin in late 2013, I had quite a few different investments that were largely pegged to the dollar or to just general market performance. Quite a decent portion (but not all) were within 401k funds, too. I had some guaranteed cashflow kinds of investments too.. kind of like annuities, so in the end of my analysis of my then situation, I had already made some general overall conclusions that all of my various investments were likely sufficient to completely support me if needed, but also at that time, I was no longer able to contribute into the 401k funds, and so I was looking for an investment to attempt to try to match my historical 401k funds with maybe a 5-10 year investment timeline, so when I found bitcoin, I considered that bitcoin would fit the bill pretty damned well, but surely I was a bit nervous about bitcoin, so I authorized myself a 6 month period forward to attempt to build a BTC stake, and then I extended another 6 months, so towards the end of the 12 months I had felt a bit more comfortable targeting my investment allocation into BTC to be around 10%.. but since 2015 was such a suck-ass year for BTC prices, I kept dollar cost averaging into BTC in a kind of more reserved way, and got to around 13.5% by the end of 2015.
So in the subsequent 7.5 years, my various other investments including stocks, 401k etc, had gone up to have maybe around a 50% higher value than they had in late 2013. However, my BTC has went up 28x in 2017, and then crashed down to ONLY being around 4x up, and then went up to around 70x up with the peak to $64,895, and sure it has "crashed" back down to ONLY being around 35x up (something like that, but who's counting? Me?).
Part of what I am trying to say is that even though I still feel that I can completely live off of all of my various other investments that likely constitute around 10% to 13% of my total investment value, my BTC investment has risen to being around 87% to 90% of my holdings, even though I had pretty much only invested around 13.5% into the BTC component... (again overinvested in BTC from 10% that was my late 2014 target and ended up with something like 13.5% invested into BTC and the change in value is mostly BTC price appreciation that was much greater than any or all of the other assets/investments that I had).
Even though the BTC price is quite a bit higher today than it was in late 2013, the investment case for bitcoin seems to be way stronger now as compared to what it was in late 2013.. so therefore no reason not to be striving towards planning around BTC in such a way that prioritizes attempting to reach certain BTC accumulation targets that are within your personal circumstances, including your finances and your psychology.
When anyone tells me that they do not have any other investment besides bitcoin, which is largely implying that they ONLY have bitcoin and cash, then I am concluding that it is fairly obvious that such person is not even close to reaching “fuck you” status, and accordingly such person is likely in a kind of accumulation status.. even if they are stating reservations about whether they have enough or not.. or maybe in your case, you are already feeling overallocated in bitcoin and that is why you are hesitant to acquire more in a blindly kind of DCA-ing way.
I'm not close to FU-status indeed, and even though 100% in Bitcoin gives the best chance of reaching that quickly, it's also the most risky strategy. I might do that if I'd be single, but it's not only myself on the line now.
For sure, I do not agree with anything close to 100% in BTC approach, and I personally believe that anyone investing into BTC and uses some common sense and strategizing would have really decent chances of cutting down the time that it takes to get to FU status and also having greater chances of getting there.
Historically there are all kinds of relatively smart people who work their asses off all of their lives, and they do not necessarily get to FU status by the time that they are due to retire or even at some earlier date whether that is 5 years early, 10 years early, 20 years early or some other early FU status date. So depending on your situation, there may be ways to actually cut the usual time of getting to FU status in half.. or maybe even better than that.. of course there is likely going to be personal variance, and the best that any of us can do is to try to use the resources in front of us and try our best to employ some kind of prudent strategy that does not devolve into gambling strategies (or excessively risky strategies).
I have some difficulties conceiving anyone who is either close or into “fuck you” status that ONLY has bitcoin and cash. Does not make a lot of sense to me, even though I do understand that there could be some situations that justify such a way of structuring assets. Ultimately, I am thinking that there is a considerable amount of justification to go beyond bitcoin in terms of investments into assets, even if many of us consider bitcoin as the fastest horse in the race, but we still are not too likely to conclude that its volatility does not need to be accounted for.
To get anywhere close to FU-status in my book, I'd need Bitcoin to go up 5-fold. It might happen this year, it may take 4 more years. But
if when it happens, I plan to diversify more to increase the chance of keeping said FU-status.
Like you said, 5x seems quite reachable from here (let's call it $32k as I type x 5 = $160k) in this cycle or in one of the next couple of cycles.
Even though my previously submitted 208-week moving average chart does not directly cite tops, it shows ONLY getting up to $145k as a bottom by late 2041, but if I put an extension on such chart it gets above $160k as a bottom by late 2042.. for whatever that is worth..
Date Price gain/time BTC#/Goal6/25/21 $13,333.33 $800.00 150.00003750
12/24/21 $14,133.33 $848.00 141.50946934
......
[edited out the middle portion]
.......
6/23/40 $122,056.67 $7,323.40 16.38583161
12/23/40 $129,380.07 $7,762.80 15.45833171
6/24/41 $137,142.87 $8,228.57 14.58333180
12/23/41 $145,371.44 $8,722.29 13.75786019
6/24/42 $154,093.73 $9,245.62 12.97911339
12/23/42 $163,339.35 $9,800.36 12.24444659
6/24/43 $173,139.72 $10,388.38 11.55136471
12/24/43 $183,528.10 $11,011.69 10.89751388
Sure my 208-week moving average appreciation chart is pretty conservative, but I am sticking to my guns that worse case scenario bottoms are more important than tops, even if many of us seem to get quite overly excited about tops more than bottoms (no homo).
I am really sympathetic to any ideas about starting out investing in ONLY one asset, and then once such asset investment gets to a decently-sized level (could take several years, and maybe even 10 years), then figuring out where else we want to place our value. We do not want to keep too much in cash, right? Especially if we are holding over several years, right?
Here's the thing: I've always played quite safe, keeping cash in a savings account with a nice interest. Then central banks decided against any interest, forcing me towards riskier investments. But I also know I'm irrational when it comes to investing: "I'm not buying, I'm not selling" means I miss out on opportunities because I'm kinda afraid to make large changes, and it also means I just stick to where I am (up and down).
I can totally relate with you. I feel kind of stupid when I look at several of my first 10-15 years of investing, and it almost seemed as if I was spinning my wheels for so damned long in terms of the speed in which my networth went up (I mean like a snails pace, seemingly), and sure part of my own decision was to invest in myself through college, so I am surely no kind of person who down plays the value of college - even though when I first graduated from high school, I thought that I was not going to go to college, so I did not start attending college until I was already spinning my wheels for around 3-4 years trying to teach myself - which hardly got me anywhere.. but college taught me to learn how to learn, and sure some kids from better of upbringing might not have needed college in the way that college really got me ahead in terms of making way more money than I even needed - which ended up getting invested, and even though my making progress on my pre-bitcoin investments seemed to also take a long time, it sure picked up a lot of pace when I 8X-ed my previous income and then seemed like my income went up more than 50% for several years, which surely helped my investment portfolio... lucky as fuck, but comes partly through ongoing persistence in investment that was helped a lot more once there was more capital to work with.
The punch line is that I have always felt myself to be very conservative in my investments, and for example I used to buy government bonds.. every paycheck when I first entered the labor market.. not very risky at all.. but I felt that they were slowly increasing my networth because I had always striven to invest at least 10% of my income into something.;. even if my income was not very BIG in the beginning and even if I was able to increase my investments to close to 30% when I landed what I considered to be a high paying job relative to my previous lame-ass gigs.
Loyce, if you are telling me that you are NOT currently buying bitcoin (by using DCA and other methods) because your investment timeline is less than 4 years, then that would be way more understandable than to imply that you are staying in cash because you are waiting for a lump sum investing opportunity… NOT that you are saying that, exactly.
In retrospect, I should have bought more Bitcoin a year ago. But I don't feel like doing it now, especially since Bitcoin is still more expensive than at my biggest sale ever in December last year (to pay taxes).
Bad rationale to say to yourself that you are not going to buy more BTC because you sold at a lower price -especially since you already conceded that you are in BTC accumulation stage... so once you establish your BTC accumulation goals, don't be fucking around with selling any BTC until you are solidly close to being way over-allocated in BTC or so damned profitable that you need to be taking a wee bit off the table.
I am not going to elaborate on this point beyond pointing out
the SSS thread that goes into the raking of profits topic.
I think that one of the things that you are telling me is that you are not DCA’ing in Bitcoin because lump sum is better.. and you are waiting on a “down opportunity”, but if the BTC price does not go down from here, you are just going to suck it up, even though you could have bought more BTC at these here prices.
If BTC doesn't go down from here, I couldn't be happier
That is what happens when you have not sufficiently prepared for UPpity. You are excessively hoping for down in order to make up for your lack of your preparation.
In other words, you are gambling rather than investing.
But, hey.. do what you like. It's a free country
(just kidding).
There is something missing with our back and forth because surely, as I repeat, your situation is screaming DCA should be in your plan somewhere.. but maybe you are still figuring out a way to say what you are doing in a way that makes sense.
DCA is into my plan, but it's currently towards diversification (stock market) and not (more than I am in already) towards Bitcoin. It does help I have some earnings in Bitcoin too of course, so I slowly gain some anyway.
Of course, if you are earning some income in bitcoin, then that can be part of the formula regarding how much to allocate towards BTC or towards other investments. No problem with that, except just to say that some people will under-allocate in bitcoin because they restrict their lil selfies to obtaining bitcoin ONLY through "earning it," so sure there are a decent number of people who end up screwing themselves because they are "against" buying bitcoin.. and maybe they have a signature campaign or some other lame income that pays $15 per week in bitcoin or maybe they have something that pays $300 to $3,000 in bitcoin, but such income is really erratic, and they end up screwing themselves out of investing into bitcoin because they are against buying it, even though maybe they have an extra $1k per month or something like that that they could dedicate towards bitcoin buys that involve lump sum, DCA and/or buying on dips with that money that they already have coming in on a regular basis.
I say fuck that nonsense, and let’s be more strategic about it. Let’s divide the $12k into three, and invest $4k right away (lump sum), structure DCA for the other $4k (for the next 6 months which is $4,000/26= $154 per week) and buy on dips with the other $4k (if you think that the absolute bottom is $20k then you structure down to what you believe to be the absolute bottom, and since you do not know the bottom beyond pure speculation, you want to use increments with this and not put all of it all the way at the bottom.. that would be nutso.. even though I know some peeps in these here parts are nutso and have to fight back their urges to gamble at every opportunity that they get)… hahahahaaha
The problem with this is I'm pretty sure Bitcoin will at some point drop 85% again.
Yes.. there are pretty good chances that BTC will drop 85% at some point. I agree, but that should not stop you from employing the formula that I already mentioned and just allocating accordingly.
In other words, the likelihood (or should we call it "fact"?) that BTC prices will drop 85% at some point is a reason to tweak the ways that you allocate rather than a reason not to invest at all.
It's done it many times, and just recently dropped 50% again. I'm (a bit) okay with that (even though going up is much more fun), but I wouldn't want to expose more of my everything into Bitcoin. I did set a plan though to sell some at some point, and buy back at another point if it drops enough. I expect/hope to reach those targets in the coming years.
Sounds like you have it figured out... perhaps?
Sure, if you already have some money in BTC, then you might need to adjust how much you allocate to each of the three categories that I describe above.. but nonetheless, from my humble bumble (and not always so humble) opinion the DCA proportion is the strongest of the three… even though for sure, you should be accounting for all aspects of your personal situation in order to plug your amounts into the categories appropriately.
For my personal situation, buying more Bitcoin doesn't make much sense. Each year, depending on my total savings, I pay
0.59%, 1.4% or 1.76% tax on every investment I own. Let's take 1.4%: that basically means I either need to sell 1.4% of my everything, or have enough cash to pay the taxes.
Yes... Let's just use the 1.4% as a rough estimate of what taxes that you expect to have to pay.
Gresham's law will dictate spending the worst money first, and of course, if you only have BTC, then you are stuck selling BTC.
So, sure, I agree that you have to generate 1.4% of income to just pay your taxes, and I am not sure why that would be a disincentive to buying BTC, unless you believe that it is not going to go up in value at least 1.4% per year on average.
Anyhow, sure taxes should be part of any calculation, and you are in the best position to balance all of those aspects in terms of your overall allocations and trying to figure out prudent and reasonable ways to attempt to reach your FU status goals while trying to preserve your principle, too. So, I cannot really disagree with those kinds of calculations and considerations in terms of overall planning and strategizing.
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