"Only invest an amount you can afford to lose"

[mk4]

"Only invest an amount you can afford to lose."

Probably one of the most common advice I've heard when it comes to investing in bitcoin; and I've used it a lot of times too. But honestly, in our current situation where fiat is getting printed like hell, I started to use that statement less and less. It just seems that holding bitcoin is now totally necessary.

Don't get me wrong, we should still be heavily educating people when it comes to proper investing in general with DCA-ing and probably not going all-in on one go and stuff, but I think bitcoin is a lot less risky of an investment now compared to the past few years despite it still being volatile.

Thoughts? Opinions?

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[Charles-Tim]

Thoughts? Opinions?

In trading, gambling, altcoin that seems like gambling, and options which are also gambling in my opinion. That is where that statement of investing what you can afford to lose are valid.

In holding bitcoin, this should be the proper in my opinion. 'Hold', if the price is plummeting, then hold more. If the price continues to plummet, hold more until the bear market is over. Then the price will increase again and later on reach all-time-high.

Some people will panic and sell at the wrong time and lose, instead to wait and see the price soar (increase) again.

The worst investment we can have is fiat holding. Fiat depreciates all the time. Not only this time. Check decade(s) ago in your country and compare your fiat purchasing power as at then and compare it to now, highly inflationary and depreciate fiat will be the 100% result.

[NeuroticFish]

Thoughts? Opinions?

I still use it. A lot. Maybe a bit changed like "only invest an amount you can afford to lose or to keep locked in bitcoin for very long time".

While indeed fiat is getting printed at an incredible rate, we should not forget that some simply cannot afford to put away a couple of bucks on the monthly basis. They may see bitcoin as the goose that can lay golden eggs and, when the price falls, they get panicked. I expect people who "don't afford to lose" lose the most when the price falls suddenly, because of their FOMO-buy and panic-sell actions.

I completely agree on heavily educating. But I also think that until the moment somebody understands fully good how the bitcoin investment works (and how much the price fluctuates too), until the moment one understands good enough why the price rises more than falls on the long term, the "only invest an amount you can afford to lose" is a simple starting point. Later on he can already decide better whether he should or not invest/buy and will probably no longer need our answers.

[Obito]

I think that it still rings true to some degree because investment is always risky so there's no way that the saying loses it's value overtime. Even if fiat gets printed, we should know that those printed notes are replacing the notes that were destroyed or unusable so even if they print, they still maintain the number of fiat although the newly printed are much bigger than the ones that are removed.

[Upgrade00]

but I think bitcoin is a lot less risky of an investment now compared to the past few years despite it still being volatile.

Thoughts? Opinions?

Yes, I agree Bitcoin is a lot less risky than it was a couple of years ago and with the management of fiat it is becoming more prone to inflation and supply shocks making it not ideal for storing wealth, I would however not recommend investing more than you can afford to lose at a time. The comfort of holding is being able to hold through different markets, bear or bull. However, if you hold amounts you could very easily need in the near distant future, you can not comfortable hold and would have to sell to settle life issues, and it could be at a time when the price is not very very attractive.

Investors can on their judgement decide to buy heavily into Bitcoin regardless of the general advise, but that would be a personal decision and not as a result of suggestions from others.

in our current situation where fiat is getting printed like hell, I started to use that statement less and less. It just seems that holding bitcoin is now totally necessary.

There are other means of hedging funds besides Bitcoin and fiat.

[franky1]

if not "Only invest an amount you can afford to lose"
atleast say "Only invest an amount you can afford to not need access to short term"

you only lose if you sell at a loss... due to impatience/needing to get out too soon

[nullama]

"Only invest an amount you can afford to lose."

Probably one of the most common advice I've heard when it comes to investing in bitcoin; and I've used it a lot of times too. But honestly, in our current situation where fiat is getting printed like hell, I started to use that statement less and less. It just seems that holding bitcoin is now totally necessary.

Don't get me wrong, we should still be heavily educating people when it comes to proper investing in general with DCA-ing and probably not going all-in on one go and stuff, but I think bitcoin is a lot less risky of an investment now compared to the past few years despite it still being volatile.

Thoughts? Opinions?

As of today I think you would be crazy not to have any bitcoins at all.

You just need to read the original sources to realize how important Bitcoin is, and more importantly, how it was not created as a way to make a quick buck, which is the case these days with 99% of altcoins.

I had a look at gold, and real estate as investments, and ended up choosing Bitcoin. Not only because of it's amazing ROI, but also because of it's unique self sovereignty. No other asset has that quality.

You do need to have some kind of short term money available to you, maybe in a savings account, or index funds, etc. But for the long term I'm definitely looking to get all the sats that I can.

[Poker Player]

"Only invest an amount you can afford to lose."

Probably one of the most common advice I've heard when it comes to investing in bitcoin; and I've used it a lot of times too.

It's advice that works for the vast majority of people, especially if they have little money or have little financial literacy.

But honestly, in our current situation where fiat is getting printed like hell, I started to use that statement less and less. It just seems that holding bitcoin is now totally necessary.
Probably one of the most common advice I've heard when it comes to investing in bitcoin; and I've used it a lot of times too.

Logical because we are in a Bitcoin forum, but I would not reduce it only to Bitcoin, I would also include other financial assets.

Don't get me wrong, we should still be heavily educating people ...

I do not agree with that. In the age of the internet, what people have to do is self-educate themselves.

Thoughts? Opinions?

A lot of people with money have almost all of it invested, like Musk:

Elon Musk, short on cash, keeps borrowing more and more money even as Tesla stock surges

I personally know some people who are also quite wealthy and have it all invested. The saying: "Only invest an amount you can afford to lose" makes no sense because they are well diversified and it is impossible for everything to go to zero (it is even very difficult for them to lose more than 50% of their total wealth, and even less so in a short period of time). If we include the depreciation of the Fiat in the equation, it is logical what they are doing.

[mk4]

if not "Only invest an amount you can afford to lose"
atleast say "Only invest an amount you can afford to not need access to short term"

Pretty much this. The former gives the impression that bitcoin is a gamble, whereas the latter implies that it's not necessarily a gamble but a volatile asset.

Don't get me wrong, we should still be heavily educating people ...

I do not agree with that. In the age of the internet, what people have to do is self-educate themselves.

Sure. But since we're talking about giving actual advice here, I wouldn't just say "go Google it loool" to anyone asking me for advice.

[hatshepsut93]

Bitcoin is still risky because there's no way to predict where its price will be going next. Literally nobody saw the current bull run coming, we had a market that was stagnating for a long time, and then suddenly the price started doubling extremely fast. There were no fundamental changes, so similarly a crash might come for no big reason at all.

I am currently very deeply exposed to BTC, its around 75% of my networth, and I think it's a bad idea and a huge risk. To me, and probably to most people, not being poor is more important than being increasingly more rich, so taking profits and diversifying into other asset types is an objectively good decision, even if it's going to be not the most optimal decision in retrospect.

Also, newbies shouldn't invest too much because they have higher risks of losing coins to things like hacking, malware, fake wallets, trusted third parties, scams, mishandling their private keys, etc.

[Vaskiy]

Whether it is bitcoin, altcoin, stocks, real estate or any form of investment, risk is associated with it. I'll give a comparison of bitcoin with the other forms of investments. Here one will find the growth and the risk out of volatility. Now I'll suggest to invest and forget it. Someday when you open the wallet you'll experience the goodness of holding/investing into bitcoin/cryptocurrencies.

In this case you doesn't want to worry about the market crash or other forms of volatility features which is termed to be the risk factors of cryptocurrencies.

[avikz]

"Only invest an amount you can afford to lose."

Probably one of the most common advice I've heard when it comes to investing in bitcoin; and I've used it a lot of times too. But honestly, in our current situation where fiat is getting printed like hell, I started to use that statement less and less. It just seems that holding bitcoin is now totally necessary.

Don't get me wrong, we should still be heavily educating people when it comes to proper investing in general with DCA-ing and probably not going all-in on one go and stuff, but I think bitcoin is a lot less risky of an investment now compared to the past few years despite it still being volatile.

Thoughts? Opinions?

This statement is really subjective. If you are in your twenties and  have a steady source of income, you may not mind to invest all your investable money into bitcoin. But if you are at your sixties, you may not want to touch bitcoin at all because of the volatility.

So it all depends on your risk taking capability and your individual thinking process. For me, I still have a sizable investment in bitcoin and I am buying at every market crash. But that may not be the case for many other people at different age group.

Fiat will always be printed and inflation will continue to remain a problem. Bitcoin is not an answer to everything.

[DaveF]

To a certain extent yes, you should only invest what you can afford to loose, is good advice but there are so many qualifiers to that.

There are some investments that don't pay well and also don't have much of an upside however, they are secure. Take US I-Bonds, not a great investment overall, but not much risk.
Certain precious metals, once again, not much of an upside, but many of them do tend to be stable.

But once you get out of there, into BTC / crypto and other markets, it's easy to take a loss that might take years to recover. Even worse, there could have been an upside that you missed.
Think about the 2017 BTC rally, if you had gotten in say from mid Nov 2017 to end of January 2018 it would have taken you till the end of 2020 to get back the USD value of what you put in.

So in general it's good advice. But each person has their own 'risk' bucket of money and 'what you can afford to loose' never mind the amount, but in general changes from person to person.

-Dave

[cheezcarls]

This is exactly what I have been telling most of the newbies and beginners (especially cousins, relatives, former classmates, etc.) that they should only shell out an amount that they can afford losing. However, most of them are afraid to invest and trade on BTC because of no guarantees or promises.

They invested to some ponzi opportunities that gives them “guarantees” or “promises” about earnings. They invested like five to six figures in Philippine peso. They didn’t just took my advice and instead going on in the wrong route. In the end, their money is completely gone because of these exit scams. They kept repeating it over and over again without learning their lesson after joining more ponzi opportunities.

Technically, this “kinda” applies to the “invest what you can afford to lose” quote. But in ponzi scams, you lose everything. As for cryptos, you won’t as you still own these assets while the value goes down due to market crash, circumstances, etc.

But this quote still applies no matter what.

[Vannie12]

I think the advice is still applicable especially to an average person who does not have anything to invest in the first place. I agree that Bitcoin became less risky observing how it takes place in the society but surely people would need such advice to avoid large amount of loss for themsleves. Not all are very knowledgeable of how things work. It's better safe than sorry.

[carrigan]

Starting an investment doesn't have to be with a large capital, you can also start with a small capital first so that if you experience a loss, don't panic, let's just say this is not a good way. However, the benefits obtained when buying coins with small capital will not be that big when you use large capital. But it's also useless if you have large capital but the capital is not managed properly because you are too busy. Try spending some time on cryptocurrency.

[ChiBitCTy]

Well as I’ve stated many times here, as a financial advisor who gets asked all the time “should I own bitcoin” and my answer is always the same. Do you currently have a portfolio that is on track to meet your retirement needs? Will you have extra money to invest that you can technically afford to lose? If you meet that criteria then I of course believe everyone should own a little bitcoin (or a lot).

[pooya87]

I am actually using this more, I keep telling people to invest in fiat what they can afford to lose because fiat is dumping hard all around the world thanks to the ridiculous amount of printing that happened over the past 2 years. Bag holding fiat is the same as begging for losses.
When it comes to bitcoin I try to avoid the use of the word "invest". Bitcoin is the exit sign from the broken financial system. From sometimes corrupt but always failing financial system into decentralized financial freedom.

[LFC_Bitcoin]

I’d counter that with only leave in fiat what you can afford to lose as that’s now the cold hard facts of what happens. Inflation is over 6% in a large amount of countries.

Your government are stealing from you.

I’m not saying only invest in bitcoin but you simply can not leave savings in regular fiat accounts now. Real estate, stocks, bitcoin, you have to invest in something other than low paying fiat savings accounts.

[mk4]

Bitcoin is still risky because there's no way to predict where its price will be going next. Literally nobody saw the current bull run coming, we had a market that was stagnating for a long time, and then suddenly the price started doubling extremely fast. There were no fundamental changes, so similarly a crash might come for no big reason at all.

*snip*

But we can say this for any other asset that we think is a good investment, no? A person bullish on $AMZN also doesn't know how the prices will move at certain timeframes, but knows that it will be worth higher in the long-term.