#3 2x in $$ would be nice (don't care about 5X), so I don't dismiss it and will look at it more.
Maybe I am not very clear about what you mean here, since if you and I have been into bitcoin a similar amount of time, we both went through 2015, so we both have had the opportunity for more than 7 doublings, just at today's price... so just another doubling or two? that is what you are saying that you want? But then would you be pulling out large chunks or just a reasonable chunk?.. so if we have a 2x from the previous ATH, or from where are you measuring 2x? The most logical point is to measure 2x from the current price, but that barely brings us out of no man's zone which still seems like anything under $100k is still a kind of bat country... so the suggestion that I had in the chart of $130k was tailored for some things that TrueMyth was saying. .but maybe that is a comfortable area for you too. .it is right around 2x of the previous ATH... just shy of it.. but still might be more reasonable than to expect BTC prices that do not end up being reached, if you are considering withdrawing meaningful chunks, whether that might be 15% to 25% or some other amount in that kind of a territory. .which surely would be a lot for me to even contemplate anything in that ballpark, but I am not going to completely say "no" to those kinds of possibilities... because I doubt that I would be hurt either way.. but I might be a bit more inclined to wait out a bit of a higher price, but I get so nervous about large strokes that I would just rather cash out 3% to 5% every 30% to 40% up rather than putting a lot of stress on one price point. and maybe that is part of the reason that I roll a wee bit different than you in terms of my own personal situation - whether it is psychology or other factors that might just be tied up in the way I have always done things that likely is a bit different from your seeming ways.
In this segment I was strictly talking about raking measured in $$, so 2X would be increasing my yearly $ spend 2X.
Similarly to rpietila, i am thinking about raking as a slow or very slow (and never ending) divestiture from btc to fiat and NOT about btc amount management.
In my mind, once i sell btc, I think that it is gone and it is unlikely that I would be able to replace it. Others can do it, but I was never able to do it properly.
It is quite likely that we could be following quite few similar principles, yet still end up with variations on our outcomes based on some simple differences - and even having a plan and then diverging from it from time to time can cause divergent results, because sometimes, we might know or discover that we might have some unwritten rule that maybe if the price moves up at a certain speed or if some set of quasi-unexpected events end up playing out, then we have to change the execution of our plan based on that specific set of happenings... and we might not know in advance exactly what might end up causing us to tweak our plan execution prior to the events happening.
You might consider that I am contradicting myself to some extent because part of the reason that I incrementally sell the amounts that I sell which is somewhere in the ballpark of 5-10% for every BTC price doubling (even though my own increments are much smaller and so the amounts are smaller), is based on an expectation that the worst (or would we say the best) case scenario would be that the price ends up shooting up to $200k or $500k without any correction for me to be able to buy back.. so I already assume that possibility.. it is built into the assumptions of extreme scenarios to the upside that could happen.
Of course we can consider various downside scenarios too, in order to be realistic, but at the same time, if we are investing into bitcoin, we likely already subscribe to it having an investment thesis based on various possible upside scenarios that ultimately keep the upward slope (whether the 200-week moving average or some other slope) continuing to go up even if there may well be variance in the price and even variance in how steep or shallow the upward slope might play out.
At the same time, we can conclude that it is almost inevitable that the BTC spot price is not going to go straight up, even if the base assumption (of the worse case scenario) would include that the BTC spot price goes straight up, so then it just becomes a matter of degree regarding when and/or how much any corrections might end up happening along the way, and buy backs can be structured in ways that don't require much of a correction to buy back or that they could require considerably large corrections before buy backs are triggered or it could be structured somewhere between such extremes.
The chart that I created,
which fillippone links through google spreadsheets represents a way to 1) customize how much you want the BTC price to go up prior to raking and then 2) how much, if any, you want to dedicate for buying back, and if so 3) how extreme do you need the BTC price to correct before you buy back and finally 4) what probability do you assign to your being able to buy back at the price drop points that you had established.
Once you plug your numbers into the chart, then of course, if you are striving to carry out the practice of your theory, you would have to be ready, wiling and able to place buy back orders at the prices that you had theorized within your plan... which yeah, you could have second thoughts along the way at any point, including even tweaking your own execution that might not end up matching with your original plan.. which is both a good and bad thing. It is good because you are executing your own free will and discretion, and it is bad because the execution of your plan might end up not really following through as plan, unless you maybe had programmed it in advance like a bot.... and then you have to make sure that you did not make any mistakes in your programing.
BTW, when i was talking about a large chunk, I was thinking about, maybe 15-20% max (upon reaching 500K/1mil), with the rest riding essentially in perpetuity.
Fair enough on that. .. but really if you think about it... let's just imagine 20 BTC starting out with $5k invested in 2015... I am sorry I cannot resist, even though you might have said that your 20 coins cost you $300 in 2015.. but still.. we can still hypothenisize.. a starting price of $250.. just for funzies.... and in the whole scheme of things does it really matter if your 20 coins cost you $5k, $6k or even if they might have ended up costing you $10k or even $20k?.. it would just take away a few of the compounding events.. but in the whole scheme of things would likely not make big differences for having several compounding events already under your belt, whether 9, 10 or 11 of them by the time the BTC price were to reach $500k... So we can see how it might play out for someone with 9-11 compounding events to wait to cash out some of their BTC.
1) $250 to $500 = $10k
2) $500 to $1,000 = $20k
3) $1,000 to $2,000 = $40k
4) $2,000 to $4,000 = $80k
5) $4,000 to $8,000 = $160k
6) $8,000 to $16,000 = $320k
7) $16,000 to $32,000 = $640k
8 ) $32,000 to $64,000 = $1.28 million
9) $64,000 to $128,000 = $2.56 million
10) $128,000 to $256,000 = $5.12 million
11) $256,000 to $512,000 = $10.24 million (20 BTC) (otherwise if spending 20% reduced to about $8.192 million with a remaining stash of 16 BTC)
12) $512,000 to $1.24 million = $20.48 million (20 BTC) (otherwise if spending 20% reduced to about $15.872 million with a remaining stash of 12.8 BTC)
13) $1.24 million to $2.48 million = $40.96 million (20 BTC) (otherwise if spending 20% reduced to about $25.3952 million with a remaining stash of 10.24 BTC)
So think about it, if you get to $500k, then you have been through 11 doublings of the price, and if your stingy little BTC HODLer hands (style) finally get pried open a wee bit, you have already gotten a lot of compounding value off of that $5k investment.
So, even if you go a bit more aggressive on the side of your stated range and you cash out 20% at $500k-ish that would be 4 BTC sold from your stash, and leaving you with only 16 BTC remaining, and you would get right around $2 million for that...
so let's say that you end up devolving into fiat/consumption loving
and so you choose to spend another 20% at $1 million and that would be 3.2 BTC sold from your stash, and leaving you with only 12.8 BTC, and you would get right around $3.2 million for that second raking...
and let's say that you get on a roll, and you cannot stop yourself from spending fiat.. call it mid-life crisis or whatever,
so at $2 million, you decide to spend another 20% and that would be 2.56 BTC sold from your stash, and leaving you with only 10.24 BTC, and you would get right around $5.12 million for that...
So yeah if the BTC price reaches $2 million, then there could be scenarios in which between $500k, and $2 million, you end up shaving off around 9.76 BTC from your stash and getting $10.32 million for that, but your networth is still would end up going up in that kind of a shaving off trajectory...
But yeah, we cannot guarantee that BTC prices will stay up, and you may or may not decide to buy back any of those sold BTC if the BTC price were to drop back to $350k, $500k, $750k, $1.2 million or whatever.
And maybe you could choose any variation of the selling practices, such as selling 20% at $500k, but then ONLY selling 10% at $1 million and another 10% at $2 million, or you could just choose something closer to what I had been doing, which would be selling a lower amount, such as 10% at each of the three price points.. not that you would want to gravitate towards anything close to copy
-catting yours truly.. .hahahahahaha
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