I have never really liked the 2x per year claims because it just does not seem accurate or even representative in regards to how the portfolios of many longer term bitcoiners seems to play out... and we also know that it is much easier to 2x a small number as compared to a larger number... ..
I do not think it is easier or harder to x2 if the price doubles then you are going to get a 2x return if you have a $1 or $1000 invested but I think that there is more pressure the more money you have invested especially when you have invested a large % of your net worth. I think there is a risk to this because a lot of people cannot stop themselves from taking money out when they see a profit so they might see a x0.3 increase and take it out even if their target was x2 because that pressure and fear of missing the top is real. I think that is the only thing that makes it harder is the pressure but some people can turn that off.
Yes, but I think that I am disliking 2x per year because it is seemingly overly optimistic, so from my point of view it is not a very accurate depiction of reality, even though we can find examples of some folks who invested in bitcoin in early days and perhaps their average cost per BTC is quite low, and each year if we double the price, their returns or "on track"..
... If I would have gotten into bitcoin at $100 in mid 2013, then even 2x per year becomes difficult to sustain because it looks like this:
2014 $200
2015 $400
2016 $800
2017 $1,600
2018 $3,200
2019 $6,400
2020 $12,800
2021 $25,600
2022 $51,200
2023 $102,400
So those dumbass claims are wanting us to start back in 2010 (at below $1), 2011 (at $2) or 2012 (at below $10) to make the 2x per year to be sustainable up until now, but it is not likely going to be sustainable into the future, and also it is not fucking ridiculous even if it is true on paper for those people who got in at those earlier bitcoin hardly has a price prices.
I think you might be 1 of those people you seem to be a real believer in dca and I have seen you give financial advise for months and it is always positive. I think you might be 1 of those special people that can turn the pressure off and just follow your belief to the end.
I am not sure if I would proclaim that I am optimistic, but I want to figure out some ways in which each of us should be able to structure some kind of BTC investment and/allocation plan that fits our situations in such a way that we will lessen the amount of emotions that we are going to feel when the BTC price moves beyond expectations, and perhaps it hurts us worse if we are not prepared for the BTC price to go down... and I don't really believe in selling in order to prepare for down as much as I believe in pacing your buying and continuing to buy until you get into sufficient profits and perhaps overallocation that you end up being able to shave off some profits on the way up in order to relieve yourself from so many pressures in order to keep buying when the BTC price goes down with new money...
I understand that it could take a very long time to get to a point in which you have enough BTC that you are free enough to start to sell some on the way up without having to worry about whether you have enough.. could take 10years or longer.. maybe even 20 years?
In late 2013, I was already investing in various traditional assets when I got into bitcoin for well over 20 years, so I had already built up a sufficiently large investment portfolio with traditional assets, so I had a pretty good chunk that I already had available that I could put into bitcoin and even though it took me a year to figure out that my allocation target into bitcoin was ONLY supposed to be 10%, but I ended up going to around 13.5% by the end of 2015 (which was two years later).. and surely I mostly knew what I was doing in terms of authorizing myself to overallocate but at the same time, it was not until about mid 2015 that I likely did not really figure out what I was going to do about the fact that I had ended up overallocating by so much.... so it is not completely as is I knew what I was going to do in advance, even though I had some experience and ideas and some framework that I was attempting to work within in order to tailor what I ended up doing.. and surely also somewhat attempting to share along the way too... .
I think I have got better at this but I still need reassurance from my wife and the support of her when things get tough.
Of course, your initial lump summing yourself into bitcoin probably contributed to some of the additional stress that you brought to yourself, and I am not even suggesting that it might not have been the right play for you and for your then situation, even though I would have probably played it somewhat differently.. in terms of probably lump summing with 1/3, DCA with 1/3 over several months, and scheduling buys on dips with 1/3.. and how I would have allocated those amounts would have also depended partly upon what were my other then investments and my cashflow too... and probably a few other factors too.
so even if it is possible that bitcoin continues to have decently high rates of returns that approach 2x per year, it just seems healthier not to be projecting out or expecting those kinds of numbers - even though one of the rationals for using such a straight-line trajectory does come from our ongoing low level of adoption and how long it has been taking to even get above 1% adoption... so that would be a rationale that justifies more bullish trajectories of future bitcoin prices.
It is not realistic to expect x2 every year. btc would not be a currency if we saw x2 every year for the next 20 years because it would be something that investors gamble on and people would not want to spend their btc because in a years time they think it will double. I agree I think it is unhealthy for the btc network to expect such rises and we know from history that these rises have corrections and they come with big falls which mean a lot of people can lose a lot of money very quickly.
When I got into bitcoin, I was considering that if I could get around 6% per year over a 10 year or so period of time, then I would be happy, and anything more than that would be like "icing on the cake."
Even though my views about bitcoin and my views about various aspects of the economy have changed over the past 9 years, I am not really sure if I would expect much more than 6% per year, even though I had been considering some scenarios that work from the 200-week moving average and then they would project out something in the ballpark of 10% to 12% per year, but using the 200-week moving average as a kind of base point.
On a personal level, my BTC price performance has way exceeded 6% per year even if I count $1k per BTC as my average cost per BTC, so I feel that bitcoin has already met my expectations, so I personally feel that i have a lot of room to work with my own options of what to do with my BTC.. . and so when I get down to talking with others about their choices about whether to allocate into BTC versus other things that they invest into, I do tend to consider very conservative projections in regards to potential returns until you start to get into profits, so you have to consider that your BTC investment might not end up going up, but still 6% to 12% per year could still work as conservative ways to project "better case scenarios" in order that if your investment into bitcoin ends up out performing those projections then you have extra to work with.
In my own situation, my first year into BTC in 2014, my BTC portfolio projected downward little by little into 20-30% into the negative, and then my second year in 2015, I spent most of the time in about less than 50% of the value that I had placed in, and there were a couple of dips in which I had only retained about 35% of the value on paper, but of course, you had seen from my earlier post that in 2015, I had added more than 11% more BTC to my stash during that year... so even 2016 (my 3rd year into BTC), I was largely feeling myself as slightly even or even slightly in profits based on how I was managing my BTC portfolio including that I had largely brought my average cost per BTC down below $500, even though the very first BTC that I bought at $1,200 in late 2013 did not clearly become profitable until about March 2017, which would have been more than 3 years and 4 months after my first having had gotten into BTC.. and subsequent mistakes that I made with my BTC portfolio had caused me to later value my average cost per BTC at $750-ish and then later for easier accounting, since about 2018/2019, I just started to count my average costs per BTC as around $1k per BTC..
So it just seems easier to start to consider more options that you might have when you start to see parts of your BTC portfolio as being in profits, and there is even more comfort if you can start to consider/calculate all of your BTC holdings towards being in profits, even if the numbers that you use might vary based on how you want to frame the situation and if you want to paint conservative expectations (that are more likely to be met and/or exceeded) or pie in the sky expectations (that are more likely to be defeated).
I like to paint my own situation in conservative ways in order to be largely exceeding expectations, and I feel that gives me more options and I won't necessarily overspend or gamble with my BTC holdings, and surely each person needs to figure out a way of framing what they are doing, what they are expecting in ways that are comfortable for themselves and how they see their own situations.
I am not completely innocent in my own trajectories, and even within weeks of
my posting my December 28, 2021 FU status trajectory chart that was using about a 75% per year price trajectory (37.5% per half year), I was feeling guilty regarding my use of a straight line trajectory that is so bullish and I was considering that it may be better to start out with higher numbers (percentages) earlier in bitcoin's history and then to tapper off such numbers with the passage of time, so I had been considering if there might be ways that I could include a formula (or to re-jigger my charts) in order to include a kind of tapering formula (rather than a straight-line formula).
I appreciate you showing your mortality. I started to expect you were the most positive investor here. I try to be positive and I think a lot of other members are trying to remain positive but the last few months have been difficult for all of us and we see people starting to struggle with every day life and not just btc which means they might have to dig into their investment which could mean losses because btc is down.
One mistake that any of us has to be careful to NOT make is to attempt to assure that we are not overinvesting, and for sure that does not just apply to BTC, so we have to make sure that we have our expenses covered if we are putting in new investment, and if we had already gotten ourselves into a situation in which we did not have our cashflow and expenses figured out, then we likely made mistakes in the way that we invested (and we were investing money that we did not have available for investing, even if we had not known it at the time).
I am a BIG advocate of overinvesting providing any of us with more options, once our investment starts to moves in our favor, but I am not an advocate of investing money that you should have set aside for expenses and for an emergency fund that covers unexpected expenses that might last quite a while into the future.. and of course, we should be able to attempt to increase our cashflows, lessen our expenses, and to spend from less valuable resources before dipping into our bitcoin, but if we had been overinvesting in such a way that we did not have our expenses covered, then we might not have a choice, except to spend our bitcoin (if we have run out of resources).
When I talk about my own liberty that I had gotten in terms of overinvesting into bitcoin, it was that I had invested up to 13.5% into bitcoin in 2015, even though in late 2014, I had really ONLY authorized myself to invest up to 10% into bitcoin.. so I had pushed my authorization level during the next year (in 2015), and surely that ended up paying off later down the road when the BTC price started going up and even going into profits territory, then I had way more flexibility in terms of shaving off that extra 3.5% if I had wanted to but it largely ended up growing because over my first BTC bubble in 2017, the BTC portion of the investment portfolio had gone into the 80% territory, and then when we corrected back down in 2018 and thereafter, I had gotten back down to 45% allocation and then went back up into the 90%- arena and currently corrected back down into the sub-70% territory, but then now seems to be around 73%, so I had developed some philosophies over the past few years of letting your winners (BTC in this case) ride rather than reallocating, but at the same time realizing that I have been overinvested in BTC since about 2015 (and maybe for my own good
(am I lying to myself since this seems to be a kind of permanent arrangement?) I should come up with some other way of describing the situation)..
Well? maybe I can give you some numbers?.. $100 per week? Is that a reasonable starting place?
I will say it should not be a fixed amount but what ever you can afford to invest.
Well, once I said that I was going to give a number, I thought that I should at least follow through.. and $100 per week has been my go to starting number for people in the west.. even though between about 2014 and 2020, I used to tell people to "get the fuck off of zero," so that default number used to be $10 per week, but from my point of view, times had changed after March 2020, so I felt that I had to up my "get off zero" starting amount.. and I also changed my recommended starting allocation target range from 1% to 10% to 1% to 25%, and of course, I am not taking any responsibility at all for any of this except to give some kind of a concrete number rather than being whimpy and non-specific about the subject matter... Otherwise, people/normies/nocoiners/precoiners/lowcoiners have to figure this shit out for themselves.. and they cannot tell me that I was not specific enough for them..n but they are responsible for their own investment choices including but not limited to whether they should invest and/or how much and/or how they are going to go about it. I take no responsibility, even though I will give a recommendation, if asked... which largely starts with .. get the fuck started right away... don't be diddly daddly around.. and figure out your own specifics, including your budget and your psychology.
Many people are living paycheck to paycheck and only have a small amount left over every month.
Well, they better get their shit figured out then, and if they figure out that they don't have any money left to invest into bitcoin then that's on them.. they may well have their priorities messed up... if they are ONLY able to figure out how to get $10 per week into bitcoin, then at least that's a start and maybe after 6 months or a year they might be able to increase their income or lower their expenses so that they can become more aggressive in their bitcoin investment, such as $100 per week or more.
In reality, if someone does not have any cornz, then each person should try to be as aggressive as they can afford to be without being overly aggressive that they do not have their expenses covered.. and also, it is up to them to figure out the details and they should be able to learn along the way, too.
Youngsters are the ones which do not have many cash flow because they have yet to accumulate it. $100 might be to steep for a lot of people but if you can afford $100 I think it is a great start.
I had some periods in which I did not have good cashflow.. especially while in college.. and surely decisions to spend on college or invest in yourself or what kinds of things to study might be different today as compared when I was considering the balancing of those kinds of matters... Of course, there should always be some values in terms of investing into yourself, and the extent to which your skills or the things that are studied/learned are practical might vary in terms of personal goals, and surely I knew a lot of folks in college who were way more focused than me, had better role models, had better social connections, but still each of us has what we have available to us, and surely some folks are going to have limitations in some of their abilities too..... so what is available might affect how much to invest into oneself versus how much might be available for financial related investing.
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