Why is a constant rise in the price of Bitcoin, important?

[Kakmakr]

Let's say you bought a bitcoin for $1000 in January 2018. <Just an example, not the real price at the time>

So you have to beat inflation and also the performance of other investments to say that your Bitcoin investment was a better investment, than other alternative investments.

Let's say your inflation is 5% and your best return on some other investment is %20 per year, then your Bitcoin price increase will have to be more than %25 to beat the alternative investment.  

Let's say you hoard for 5 years, then you would need a price increase of 125% to beat your alternative investment returns over 5 years.

So we cannot have a price increase of 800% in year 1 and then a price decrease of %400 in year 2 and another price decrease of 200% in year 3 and so on...

Hope you get at what I am saying. Hoarding might be harmful to your profits, if you do not cash out SOME profit on the ATH.   ..... You might end up with a bitcoin worth $100 in year 5. 

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[tuikindu01]

The rise of bitcoin is driven by many factors. In the end, the rise of BTC prices is due to the increasing perfection of its investment attributes. BTC no breakthrough in usage scenarios, but as an investment, BTC has already is an important investment target, whose nature is more and more like gold, its use value is no longer important, important is its increasingly recognized as an investment.

[Don Pedro Dinero]

I am not really sure I get your point here. If you have an initial $1,000 invested, and you get positive returns every year, how can you end with just $100?

I do agree in cashing out from time to time, especially in ATHs.

[batang_bitcoin]

Hope you get at what I am saying. Hoarding might be harmful to your profits, if you do not cash out SOME profit on the ATH.   ..... You might end up with a bitcoin worth $100 in year 5.  

I agree with what you are saying. I remember someone here from the forum said the same thing and that made me realize that I should enjoy and take some profits.

This isn't an investment used to be but to take profits and enjoy during the ATH is what others are forgetting. The fact that everyone is becoming greedier due to the potential that we can see to bitcoin but at the very end of it, we fall. There's nothing wrong in holding but don't forget to take your profit.

[Kakmakr]

I am not really sure I get your point here. If you have an initial $1,000 invested, and you get positive returns every year, how can you end with just $100?

I do agree in cashing out from time to time, especially in ATHs.

This should not be too difficult to understand. You buy at say $1000 in year 1 and the price drop with 50%, then you are left with $500. Then it drops with another 50% in year 2 and you are left with $250 of your initial investment.

If you invested that $1000 in some traditional investment and you received say 20% in year 1, then you would have had $1200 by the end of that year and $1440 in year 2 and so on...

The best strategy would be to take profits in whatever year the price of Bitcoin reach a ATH again, to secure your profits. You should not just follow a blind "hoarding" strategy, where you hope that the price will be much higher than what you might have received from an investment in a traditional investment with a fixed return.

I took profits last year, when the price skyrocketed to a ATH, so my profits are locked in. <800% in 1 year> So, even if the price decrease now, I would still have recovered my initial investment with some good profits. 

I can lose all my money invested into Bitcoin now and I would still be in the green, because I cashed out the profit on a ATH. 

[davis196]

You are partially right about this,but bitcoin is not stocks.In the financial world more risk=more profits.
With the higher btc volatility,all the crypto investors are taking a way higher risks,instead of buying and holding stocks and obligations.The constant rise of the btc price is impossible,but a lower btc price volatility
is impossible as well.  

[Kakmakr]

You are partially right about this,but bitcoin is not stocks.In the financial world more risk=more profits.
With the higher btc volatility,all the crypto investors are taking a way higher risks,instead of buying and holding stocks and obligations.The constant rise of the btc price is impossible,but a lower btc price volatility
is impossible as well.  

The trick is to manage that risk, and not just gambling on the outcome. One of the methods to manage the risk is to determine when it is the opportune time to exit and to sell a percentage of your profits to reach a good ROI. For this to happen, the price of the coins that you bought, would have to increase to a price point higher than the purchase price.

This price point has to be high enough for the investor to be able to beat other investment options and this is why we need a constant increase in the value of the coin. People will lose interest, if the price continue on a downward spiral or even a long stagnation in the price.

[KeijiN]

If there will be things like that, we will prefferably choose to buy bitcoin, knowing that it will grow, like some bank deposit.

[Bitcoinjheta]

Definitely its very important for the price of bitcoin to increases more because it has a big advantage for the whole cryptomarket to celebrate the biggest capital they want to earned if the investors will soon to withdraw there investing and also others who are believe that value will soar up high up to the highest pick of speculated valued is concern and there goes a volatility which easily down the world value to due excessive selling of bitcoin in a market.

[bangkit tri]

to know when to enter or exit we must have a sharp analysis. that's what it takes to get a lot of profit. because of we can not control the market by lowering the votality or raising it. so we have to cleverly take advantage of the opportunity

[Idrisu]

I think this market do not work base on this analysis you put on and from history you can see that we have been having steady progress for the past five years.  We are not going to have any of those dump consecutively in five years and holding is the best ways for you to actually make money in this market.  We are going to have a normal assets price from now on.

[player514]

Let's say you bought a bitcoin for $1000 in January 2018. <Just an example, not the real price at the time>

So you have to beat inflation and also the performance of other investments to say that your Bitcoin investment was a better investment, than other alternative investments.

Let's say your inflation is 5% and your best return on some other investment is %20 per year, then your Bitcoin price increase will have to be more than %25 to beat the alternative investment.  

Let's say you hoard for 5 years, then you would need a price increase of 125% to beat your alternative investment returns over 5 years.

So we cannot have a price increase of 800% in year 1 and then a price decrease of %400 in year 2 and another price decrease of 200% in year 3 and so on...

Hope you get at what I am saying. Hoarding might be harmful to your profits, if you do not cash out SOME profit on the ATH.   ..... You might end up with a bitcoin worth $100 in year 5. 

There's a lot more to it too! There's a whole psychological component as well. People were inclined to invest in Bitcoin during the ATH run because they saw it going up so much. They decided that they could hop on the train too, so that's exactly what they did. However, when people see this coin hovering at the same spot/dropping a little bit, people get scared. They pull their money out, and they also tell everyone else they know to do so as well. In this case, there's not as much of a push to drive the price back up, so the coin has to fight this resistance. Since BTC is governed by the people who invest in it, this can have major impacts on the price. It's a weird cycle in a sense.

[fargoway]

It is not important. Moreover, it is harmful. If price raises all the time - you will simply hold it. If everyone holds or trades (sell and buy bitcoin to gain profit) just because it is stupid to sell it for less when you know it will cost more tomorrow - it will make the bitcoin totally useless (money to make more money).
If you don't understand this - I am really sorry, but seriously, don't you see the benefits of blockchain apart of growing price? Not stable currency cannot be used in economy or trading.

[torch2121]

Yes I get this point. This is the importance of setting a time frame when to cash out. That's true we have to enjoy the profit. Then repeat buy and sell. It is better that we put to circulation on what we hold. I think that is better. Most especially the value of Bitcoin is quite high nowadays.

[carter34]

Hope you get at what I am saying. Hoarding might be harmful to your profits, if you do not cash out SOME profit on the ATH.   ..... You might end up with a bitcoin worth $100 in year 5. 

I can make sense of what you are saying from this above quote.

It is exactly the point that while hodling, price increase and fall back, so it is more business like when we sell off at profiting time to buy again when price is low.

[el kaka22]

The rise of bitcoin is driven by many factors. In the end, the rise of BTC prices is due to the increasing perfection of its investment attributes. BTC no breakthrough in usage scenarios, but as an investment, BTC has already is an important investment target, whose nature is more and more like gold, its use value is no longer important, important is its increasingly recognized as an investment.

The usage scenario is not something we are getting to see now, but hopefully we may get to see this in the long run and as it is now, we may just end up stuck to having speculative asset in our hands. As more people keep seeing it as an investment alone, and then hoarding it, the more the speculative attribute of it keeps increasing. However, the OP was right, as there are just some times you need to be smart even while you are trying to hold for the greater good.

This isn't an investment used to be but to take profits and enjoy during the ATH is what others are forgetting. The fact that everyone is becoming greedier due to the potential that we can see to bitcoin but at the very end of it, we fall. There's nothing wrong in holding but don't forget to take your profit.

Right, I was actually forced to learn how to trade and find a pattern to be able to get the best of the market as a result of most of the things the OP said and that over the years has ended up giving me a better position than someone who is just busy hoarding all through. It has made me to focus on the future which I would not apparently be missing and also be enjoying the present profits. I believe this is where my mouth is and better to concentrate on getting the best of it.

[Lorence.xD]

Hope you get at what I am saying. Hoarding might be harmful to your profits, if you do not cash out SOME profit on the ATH.   ..... You might end up with a bitcoin worth $100 in year 5. 

I can make sense of what you are saying from this above quote.

It is exactly the point that while hodling, price increase and fall back, so it is more business like when we sell off at profiting time to buy again when price is low.

 Its anybody's choice if your going to hold or sell it later. The crypto currency market trading movement is Volatile, just other stock market, no one can tell what will happened to the  market of ALT coin price. A stable market price of one coin project is important not only the coin project investor but it is the bases of building confidence to other future market trading investor which contribute to the future increase on the price value of Bitcoin. Issues on Banned,Scammer, and Regulation affects the price value of Bitcoin every time it was release on the trading market. The steady but slowly increase on the price value of such coin project is more than important  rather the spike increase.

[Saiful Islam777]

I have some tokens I got by work. Bitcoin Prices Grade Pauer, I sell and get good profit. Bitcoin has a few investors involved with it and there are also some of the less developed people who work this Bitcoin family. So, I think it is very important to keep the Bitcoin value intensified by analyzing all the details.

[avikz]

Let's say you bought a bitcoin for $1000 in January 2018. <Just an example, not the real price at the time>

So you have to beat inflation and also the performance of other investments to say that your Bitcoin investment was a better investment, than other alternative investments.

Let's say your inflation is 5% and your best return on some other investment is %20 per year, then your Bitcoin price increase will have to be more than %25 to beat the alternative investment.  

Let's say you hoard for 5 years, then you would need a price increase of 125% to beat your alternative investment returns over 5 years.

So we cannot have a price increase of 800% in year 1 and then a price decrease of %400 in year 2 and another price decrease of 200% in year 3 and so on...

Hope you get at what I am saying. Hoarding might be harmful to your profits, if you do not cash out SOME profit on the ATH.   ..... You might end up with a bitcoin worth $100 in year 5. 

You are correct! Blindly hoarding your bitcoins can be proved harmful if we are not cashing out some of it during the peak prices. because bitcoin has a very limited use in digital form, especially in my country. So I always have to cash it out to make it useful. However, I also use another small trading strategy. I always keep around $500 - $600 of liquid funds in exchanges to execute trades whenever an opportunity arises. I take the moving average into consideration and invest during the price decrease. Just to give you an example,

Bitcoin price on 10 May: $9,300
Bitcoin price on 16 May: $8,227
Difference of: $1,073

If you monitor the market very closely, you can see that bitcoin's price moves within a certain price ranges every week. I just try to identify the low and enter into a position by exchanging my USDT in to bitcoin. So here I have entered in to a position yesterday and I will wait for the price to go up at least to $9,000 before squaring off my position. It may take few days but once it happens, I exchange back my bitcoins to USDT again by scoring a profit of 9.4%. That's a profit of $56 dollars which is equivalent to 3.7k in my local currency. I execute such trades once or twice a week to maintain some liquidity in my hand. I have written this down because I always put a minor percentage of my bitcoins to work instead of keeping them idle. That's inflation proof as well as provide me enough liquidity whenever needed.

[timerland]

So you have to beat inflation and also the performance of other investments to say that your Bitcoin investment was a better investment, than other alternative investments.

That is correct. Bitcoin is only the best investment of a given time period, if it yields more or outperforms the next available investment.

I think that's where the difference between a trader and a holder start to emerge. Holders aren't technically in bitcoin to make the most amount of money, they just want to conserve their wealth away from fiat currencies for the long term.

That's why if you're a trader, or someone who is into bitcoin more as an short term investment, it's so important that you sell at appropriate times. Bitcoin has its peaks and troughs, just like all other investments in the real economy.