JJG’s Outline of Bitcoin Investment Ideas

[SmartCharpa]

I agree that a long term investor will have more time to go through the various market cycles of Bitcoin, but I wouldn't say that long term investment will be necessarily pays more. We just don't really know what the Bitcoin future will look like, and I believe it is best not to present the outcome as if it's certain.

Bitcoin does not need to do much for people to believe in its future value because the history of bitcoin has said it all. No one can predict what the Bitcoin will look like in the next few years, but if you look at the history of the Bitcoin, you will understand that the future has more to offer than what we are seeing now and even in the past. Long term investors don’t not need much explanation because look at where we are today, Bitcoin is trading around $75k.

Are you part of nonbelievers or believers in Bitcoin? Because if long term investment does not guarantee success, then do you mean people should use their energy and effort to do trading? Everyone that is into Bitcoin today understands that it involves risks and profits is not guaranteed. But due to its history, we believe it will perform better than this in years to come.

[Itz-prisigold]

There is nothing wrong with using the idea of compounding value, and I have a discussion of compounding value here - (512x price appreciation between 2015 and 2025 - even though currently BTC's price appreciation is the zone of only slightly more than 256x since 2015).

Sure, bitcoin does not offer any kind of dividend outside of itself that is paid by some other entity, such as a yield, but it does have compounding value, and historically it has tended to be way better to hold onto bitcoin for 1-2 or more cycles in order to enjoy the benefits of compounding value, especially compared with folks who tend to cash out of bitcoin with less than 2x in price appreciation, so in those cases guys who are trading bitcoin and/or cashing out with less than 2x price appreciation, they are not getting the benefits of bitcoin's compounding value.

No compounding value is not guaranteed, yet bitcoin continues to have a strong investment thesis to suggest that those who buy and hold bitcoin for 4-10 years or more have reasonably good odds to continue to benefit from bitcoin's compounding value, just like those who had historically bought and held bitcoin had been able to benefit from its historical compounding value.

I do get the difference now. You are not talking about Bitcoin paying interest on the coins we have, but rather the value of the coins we have increasing as Bitcoin's value rises across various price cycles.

And I also agree that if an investor sell too soon they will end up missing out on the future gains. Whereas, if someone sells after the small increase and if later Bitcoin still rises, then that person will definitely miss out on the future gains from the Bitcoin they sold.

What I liked the most is that you also mentioned that this compounding value is not certain. I believe that's the right approach that every investor should have in mind, historical performance can actually give an investor reason to think of holding onto Bitcoin for a long time, but we should not treat what happened at the past as a promise of what Bitcoin will do in the future.

[sotelorene]

I totally understand what you are saying, if someone had bought bitcoin when the price was at $20k and they are still holding it at a price of $70k,  then they have definitely made a significant return. But I still think that we should still be cautious of calling this as “compounding.”  As the market price of the Bitcoin rises, the value of the Bitcoin rises as well, and this is simply because Bitcoin doesn’t generate a regular return that automatically grows over time like compound interest.

If someone invested in Bitcoin when the price was around $20k and the price is currently at $70k plus something now, that doesn't mean they have made a significant profit because what you should consider is what they invested ( the amount of money they invested) because you can not invest $20 to $50 in Bitcoin when the price was $20k and be talking about significant profit because the price of Bitcoin surge to $70k. The outcome will be very small compared to someone that invested some thousands of dollars so it is not just investing but rather the quantity.

[Stive009]

I agree that a long term investor will have more time to go through the various market cycles of Bitcoin, but I wouldn't say that long term investment will be necessarily pays more. We just don't really know what the Bitcoin future will look like, and I believe it is best not to present the outcome as if it's certain.

Bitcoin does not need to do much for people to believe in its future value because the history of bitcoin has said it all. No one can predict what the Bitcoin will look like in the next few years, but if you look at the history of the Bitcoin, you will understand that the future has more to offer than what we are seeing now and even in the past. Long term investors don’t not need much explanation because look at where we are today, Bitcoin is trading around $75k.

Are you part of nonbelievers or believers in Bitcoin? Because if long term investment does not guarantee success, then do you mean people should use their energy and effort to do trading? Everyone that is into Bitcoin today understands that it involves risks and profits is not guaranteed. But due to its history, we believe it will perform better than this in years to come.

I believe that viewing this solely through the lens of believers versus non believers overlooks a crucial aspect of the matter. Having faith in Bitcoin's future is one thing but effectively managing one's investment strategy is quite another.

It is not just long term investment no conventional method offers a guarantee of profit. However that does not imply that trading is the necessary alternative.

It is natural to feel optimistic about the future based on Bitcoin's past performance. Yet historical performance and future guarantees are not the same thing. While past growth can boost an investor's confidence one must also bear in mind when making investment decisions that Bitcoin's price will not always move in the same direction. Volatility is inevitable  and success is not guaranteed even with a long-term approach.

As for whether one should turn to trading simply because long term investment offers no guarantees my answer is no. Trading is a completely different approach it requires making numerous decisions regarding short-term price movements timing and risk management. The mere fact that long term investment lacks a guarantee does not automatically make trading a superior alternative.

[NewRevelation]

I totally understand what you are saying, if someone had bought bitcoin when the price was at $20k and they are still holding it at a price of $70k,  then they have definitely made a significant return. But I still think that we should still be cautious of calling this as “compounding.”  As the market price of the Bitcoin rises, the value of the Bitcoin rises as well, and this is simply because Bitcoin doesn’t generate a regular return that automatically grows over time like compound interest.

If someone invested in Bitcoin when the price was around $20k and the price is currently at $70k plus something now, that doesn't mean they have made a significant profit because what you should consider is what they invested ( the amount of money they invested) because you can not invest $20 to $50 in Bitcoin when the price was $20k and be talking about significant profit because the price of Bitcoin surge to $70k. The outcome will be very small compared to someone that invested some thousands of dollars so it is not just investing but rather the quantity.

I quite agree with this, because the quantity of your buys determines how far you must have accumulated or built your portfolio, but in that regards, the DCA strategy becomes very relevant, because when you do not have the buying power to build fast, the DCA helps you to buy little but remaining consistent over months and years.

So while some who have the financial power to buy bigger, a low income earner who has little discretionary will not border or get under pressure, but slowly builds his portfolio over time gradually without pressure. This is why the DCA strategy is praised and recognized as one the best strategies which allows you grow your portfolio consistently. With the DCA, there will be no need to worry if you don't have much discretionary, because at last, you will still have the opportunity to build bit by bit, and we can never undermine the power of building gradually and for long time.

[Supreme Donvic]

I totally understand what you are saying, if someone had bought bitcoin when the price was at $20k and they are still holding it at a price of $70k,  then they have definitely made a significant return. But I still think that we should still be cautious of calling this as “compounding.”  As the market price of the Bitcoin rises, the value of the Bitcoin rises as well, and this is simply because Bitcoin doesn’t generate a regular return that automatically grows over time like compound interest.

If someone invested in Bitcoin when the price was around $20k and the price is currently at $70k plus something now, that doesn't mean they have made a significant profit because what you should consider is what they invested ( the amount of money they invested) because you can not invest $20 to $50 in Bitcoin when the price was $20k and be talking about significant profit because the price of Bitcoin surge to $70k. The outcome will be very small compared to someone that invested some thousands of dollars so it is not just investing but rather the quantity.

True, it is not about when you started to invest in Bitcoin, it is about how much of Bitcoin you bought, when Bitcoin was very small in price let's say $1,000 some people used small amount of money to accumulate it back then while some used huge amount of money to accumulate it.
For you to make very good profit from bitcoin investment you need to accumulate good amount of Bitcoin and then hold it, if you don't accumulate good amount of Bitcoin and there is a very huge increase in Bitcoin price you will not make huge profit, it is only those who used huge amount to accumulate that will make huge amount of profit.

It is just like other businesses, those that use huge amount to invest in a business usually get huge amount of profit and those that used small amount usually get small amount of profit.

[pusaka]

I totally understand what you are saying, if someone had bought bitcoin when the price was at $20k and they are still holding it at a price of $70k,  then they have definitely made a significant return. But I still think that we should still be cautious of calling this as “compounding.”  As the market price of the Bitcoin rises, the value of the Bitcoin rises as well, and this is simply because Bitcoin doesn’t generate a regular return that automatically grows over time like compound interest.

If someone invested in Bitcoin when the price was around $20k and the price is currently at $70k plus something now, that doesn't mean they have made a significant profit because what you should consider is what they invested ( the amount of money they invested) because you can not invest $20 to $50 in Bitcoin when the price was $20k and be talking about significant profit because the price of Bitcoin surge to $70k. The outcome will be very small compared to someone that invested some thousands of dollars so it is not just investing but rather the quantity.

But let's put quantity aside, because everyone has different abilities. And actually we have to see how much profit we get, maybe for people who have thousands of dollars the amount of $100 is a small nominal, but we can not consider it small because for some who are not good financially then it remains a large nominal. It is even wiser if we look at what percentage of profits are generated.

If we make people who have tens or even hundreds of thousands of dollars obviously $50 , $100 may be very small. But I think the comparison is not wise at all because as I said before that everyone has different financial capabilities. And if the benchmark is that, then it can make people who want to invest in a limited nominal discourage their intentions.

[Princess Leah]

But let's put quantity aside, because everyone has different abilities. And actually we have to see how much profit we get, maybe for people who have thousands of dollars the amount of $100 is a small nominal, but we can not consider it small because for some who are not good financially then it remains a large nominal. It is even wiser if we look at what percentage of profits are generated.

If we make people who have tens or even hundreds of thousands of dollars obviously $50 , $100 may be very small. But I think the comparison is not wise at all because as I said before that everyone has different financial capabilities. And if the benchmark is that, then it can make people who want to invest in a limited nominal discourage their intentions.

High income earners have the advantage of investing more but it doesn't mean that people who put something smaller are wasting their time, what matters is how longer they hold, someone can invest with 10k and hold for four years while another person can consistently invest 1k for same four years and make something meaningful if it's held longer.

 So quantity doesn't matter in a long term investment although it's an advantage but everyone should invest according to their financial capacity, what matters for small scale investors especially is consistency and the ability to hold longer.

[JayJuanGee]

There is nothing wrong with using the idea of compounding value, and I have a discussion of compounding value here - (512x price appreciation between 2015 and 2025 - even though currently BTC's price appreciation is the zone of only slightly more than 256x since 2015).

Sure, bitcoin does not offer any kind of dividend outside of itself that is paid by some other entity, such as a yield, but it does have compounding value, and historically it has tended to be way better to hold onto bitcoin for 1-2 or more cycles in order to enjoy the benefits of compounding value, especially compared with folks who tend to cash out of bitcoin with less than 2x in price appreciation, so in those cases guys who are trading bitcoin and/or cashing out with less than 2x price appreciation, they are not getting the benefits of bitcoin's compounding value.

No compounding value is not guaranteed, yet bitcoin continues to have a strong investment thesis to suggest that those who buy and hold bitcoin for 4-10 years or more have reasonably good odds to continue to benefit from bitcoin's compounding value, just like those who had historically bought and held bitcoin had been able to benefit from its historical compounding value.

I do get your point now most especially of the distinction in between compound interest and compounding value, but my concern was actually that having to use the word compounding without a proper explanation can make people to think Bitcoin is generating some form of yield or intrest itself.

So I do agree that compounding value can describe respected price appreciation over different periods. But it also important to make such distinction clear.

Sure.  There are a lot of things that people need to get to know about bitcoin so that they are not inaccurately comparing it to traditional assets in ways that are not fitting, and surely the concept of compound interest (that is value added to another asset) has been around for a long time, and the only way that we get those kinds of compounding interest values from bitcoin is by involving third parties who would be willing to pay such interest.... yet at the same time, bitcoin is built in such a way in relation to its scarcity and its relation to an already established issuance schedule that its own value is designed to pump forever.. and so many folks undervalue bitcoin without appreciating that bitcoin is likely going to ongoing increase in value in ways that are much greater than assets held in other locations, even assets that are receiving interest, dividend, yield, etc etc.

Many of us also recognize and appreciate bitcoin to be an asymmetric bet to the upside, which largely means that the most that we can lose by investing into bitcoin is 100% of the value that we put into it, yet at the same time, there is a lot of potential of multiples or even magnitudes of increases in bitcoin's value, yet there are so many folks who cannot wait for bitcoin's value to double and then to double again and even to accomplish such various doublings several times in its history and likely to continue to take place into the future.  Sure the ongoing doublings are not guaranteed, yet historically, there have been so many bitcoin holders who end up selling way too much of their bitcoin too soon, and sure sometimes they might have had gotten some compounding value from their bitcoin when they cashed out, yet other times they are just happy to be able to sell their bitcoin at higher prices than they bought them, yet so many times, years down the road, they realized that they had gotten overly anxious and failed to recognize/appreciate that the allowance of the passage of longer periods of time while continuing to hold the bitcoin would have had allowed for them to benefit during those historical periods of time in which bitcoin did some stair-stepping up of its value base, and  subsequently never coming back down to the prior value levels.

The same is true at $500 in 2016, at $2k in 2017, at $10k in 2020, and seems to be the case of $20k in 2023.   At some point, even though there might have had been some folks (perhaps no coiners and/or low coiners?) hoping and praying that bitcoin would go back below those levels, there was some bit of obviousness that bitcoin is not going back down to those earlier price levels, and right now (or at least recently), the same might be true in regards to so many guys calling for sub $50k BTC prices that are never going to happen again, yet some of the people (perhaps no coiners and/or low coiners?) are still expecting those lower prices to come - even just as an outrageously large flash-crash dip.

Many times (if not most times?) in bitcoin's history it has been better to be ongoingly and consistently stacking bitcoin rather than waiting around for dips that may well end up not happening, and sure, even the more strongly convicted bitcoiners will also have their doubts during these kinds of periods, since the lower target prices are not impossible to end up happening, yet the ongoing accumulators end up getting rewarded for their consistencies and persistencies in accumulating bitcoin and at least not selling their coins in those periods where they are nervous about continuing to accumulate bitcoin (or they ran out of money to continue to accumulate bitcoin).

And, sure, sometimes we do not want to get caught up upon the use of certain words without providing some context, yet at the same time, there are many times when guys get lulled into trying to consider bitcoin as if it were some ordinary asset, and they make comparisons of bitcoin to other traditional assets that end up under appreciating what bitcoin is and why bitcoin has value.... which relates to actual bitcoin and the ability to transact and interact with bitcoin directly rather than the various ways that people might get lulled into holding various forms of paper bitcoin in which they do not actually hold the bitcoin, yet they may well be offered various benefits (even yield) to hold bitcoin through third parties, and bitcoin would not have much if any value if it was all held through third parties, since bitcoin gets its value through the abilities of individuals to be able to both hold it, but to transact with it without any permission.

I totally understand what you are saying, if someone had bought bitcoin when the price was at $20k and they are still holding it at a price of $70k,  then they have definitely made a significant return. But I still think that we should still be cautious of calling this as “compounding.”  As the market price of the Bitcoin rises, the value of the Bitcoin rises as well, and this is simply because Bitcoin doesn’t generate a regular return that automatically grows over time like compound interest.

If someone invested in Bitcoin when the price was around $20k and the price is currently at $70k plus something now, that doesn't mean they have made a significant profit because what you should consider is what they invested ( the amount of money they invested) because you can not invest $20 to $50 in Bitcoin when the price was $20k and be talking about significant profit because the price of Bitcoin surge to $70k. The outcome will be very small compared to someone that invested some thousands of dollars so it is not just investing but rather the quantity.

Normal people do not tend to just be able to lump sum buy bitcoin at or near the bottom, and even if they might have lump sum forms of value that they can reallocate into bitcoin, they likely would still be building their bitcoin stash over time rather than just in one or two purchases and then sitting on the value.

We could know about some people who either just got started in bitcoin in 2022/2023 or maybe they were dabbling around bitcoin during those times, and so even with people who are new to bitcoin, and they can see various possibilities that bitcoin is in a dip period, they will frequently be afraid and hesitant to put large sums of their value into bitcoin during such bitcoin price slum periods.

We could imagine some guy in his mid 30s, and maybe he has an income of around $30k per year, and maybe he had already been investing into traditional assets at around $100 per week for 10 years by the times that he heard about (or thought about) bitcoin in 2022 / 2023, so then he might have a choice to divert some or all of his $100 per week into bitcoin and/or to divert some or all of his already established investment portfolio into bitcoin, and sure after 10 years maybe his non-traditional investment portfolio might be worth $50k or more, so it could be possible that he could invest a decently large chunk into bitcoin all at once, yet the devil still might be in the details in regards to how he might want to do it, even if he considers bitcoin to be a potentially good investment, he may also be hesitant to put too much of his available balance into bitcoin at one time.

I totally understand what you are saying, if someone had bought bitcoin when the price was at $20k and they are still holding it at a price of $70k,  then they have definitely made a significant return. But I still think that we should still be cautious of calling this as “compounding.”  As the market price of the Bitcoin rises, the value of the Bitcoin rises as well, and this is simply because Bitcoin doesn’t generate a regular return that automatically grows over time like compound interest.

If someone invested in Bitcoin when the price was around $20k and the price is currently at $70k plus something now, that doesn't mean they have made a significant profit because what you should consider is what they invested ( the amount of money they invested) because you can not invest $20 to $50 in Bitcoin when the price was $20k and be talking about significant profit because the price of Bitcoin surge to $70k. The outcome will be very small compared to someone that invested some thousands of dollars so it is not just investing but rather the quantity.

True, it is not about when you started to invest in Bitcoin, it is about how much of Bitcoin you bought, when Bitcoin was very small in price let's say $1,000 some people used small amount of money to accumulate it back then while some used huge amount of money to accumulate it.
For you to make very good profit from bitcoin investment you need to accumulate good amount of Bitcoin and then hold it, if you don't accumulate good amount of Bitcoin and there is a very huge increase in Bitcoin price you will not make huge profit, it is only those who used huge amount to accumulate that will make huge amount of profit.

It is just like other businesses, those that use huge amount to invest in a business usually get huge amount of profit and those that used small amount usually get small amount of profit.

One of the reasons that I frequently suggest that guys invest as aggressively as they can into bitcoin without overdoing it is because there tends to be some value in investing aggressively, yet at the same time, guys have to be careful to be investing within their means and not overdoing it.. since there are so many guys who have screwed up their bitcoin investment because they got to greedy in the ways that they were accumulating bitcoin and they were failing/refusing to account for their own cashflow limitations and to make sure that they were simultaneously maintaining back up funds that would be able to absorb some of the (potentially inevitable) fluctuations in their income going down and/or their basic expenses going up.

[Primark]

For you to make very good profit from bitcoin investment you need to accumulate good amount of Bitcoin and then hold it, if you don't accumulate good amount of Bitcoin and there is a very huge increase in Bitcoin price you will not make huge profit, it is only those who used huge amount to accumulate that will make huge amount of profit.

It is just like other businesses, those that use huge amount to invest in a business usually get huge amount of profit and those that used small amount usually get small amount of profit.

Success in investing does not depend only on how much Bitcoin you have. A $100 profit may seem small to you, but it may be significant according to someone else's financial situation. That is why not every investor has the same goal and capacity. In fact, the problem is that investing by calculating profit, it seems a lot like trading. Because traders usually calculate profit from the beginning. But in reality, the main objective of investors is to create a position by buying regularly within their capacity and they try to invest in an amount that will not cause them undue pressure even if the market drops 50%. Bitcoin investment can probably be profitable, but sustainable strategy and the ability to hold it for a long time are the key.

[JayJuanGee]

For you to make very good profit from bitcoin investment you need to accumulate good amount of Bitcoin and then hold it, if you don't accumulate good amount of Bitcoin and there is a very huge increase in Bitcoin price you will not make huge profit, it is only those who used huge amount to accumulate that will make huge amount of profit.

It is just like other businesses, those that use huge amount to invest in a business usually get huge amount of profit and those that used small amount usually get small amount of profit.

Success in investing does not depend only on how much Bitcoin you have. A $100 profit may seem small to you, but it may be significant according to someone else's financial situation. That is why not every investor has the same goal and capacity. In fact, the problem is that investing by calculating profit, it seems a lot like trading. Because traders usually calculate profit from the beginning. But in reality, the main objective of investors is to create a position by buying regularly within their capacity and they try to invest in an amount that will not cause them undue pressure even if the market drops 50%. Bitcoin investment can probably be profitable, but sustainable strategy and the ability to hold it for a long time are the key.

It seems a bit small and even short-sighted to be thinking about bitcoin as a one time investment and then sitting around waiting for profits.

If a guy invests $100 per week for a year, then he has invested $5,200 over a year and $52k over 10 years.  Once we get to the 10 years of investing, then we potentially have something meaningful to think about and to talk about.  We likely do not have much of anything to talk about after 1 or 2 or even several years, since it takes a while to get the bitcoin holdings to a point that the profits from it are starting to seem meaningful, and perhaps after 10 years, any amounts of bitcoin that end up start to be sold are coming from the profits and not from the principle... yet we cannot know for sure until the 10 years have passed if the bitcoin might be valued at the same amount put into it or if there might be appreciation in the bitcoin that had ended up giving more options in regards to how to manage the bitcoin holdings to the extent that any changes in the accumulation of bitcoin might take place or if any kind of cashing out might start to become part of the management of the coins.

[Saltysugar99]

I totally understand what you are saying, if someone had bought bitcoin when the price was at $20k and they are still holding it at a price of $70k,  then they have definitely made a significant return. But I still think that we should still be cautious of calling this as “compounding.”  As the market price of the Bitcoin rises, the value of the Bitcoin rises as well, and this is simply because Bitcoin doesn’t generate a regular return that automatically grows over time like compound interest.

If someone invested in Bitcoin when the price was around $20k and the price is currently at $70k plus something now, that doesn't mean they have made a significant profit because what you should consider is what they invested ( the amount of money they invested) because you can not invest $20 to $50 in Bitcoin when the price was $20k and be talking about significant profit because the price of Bitcoin surge to $70k. The outcome will be very small compared to someone that invested some thousands of dollars so it is not just investing but rather the quantity.

True, it is not about when you started to invest in Bitcoin, it is about how much of Bitcoin you bought, when Bitcoin was very small in price let's say $1,000 some people used small amount of money to accumulate it back then while some used huge amount of money to accumulate it.
For you to make very good profit from bitcoin investment you need to accumulate good amount of Bitcoin and then hold it, if you don't accumulate good amount of Bitcoin and there is a very huge increase in Bitcoin price you will not make huge profit, it is only those who used huge amount to accumulate that will make huge amount of profit.

It is just like other businesses, those that use huge amount to invest in a business usually get huge amount of profit and those that used small amount usually get small amount of profit.

It doesn't matter when you invested or how much sats you bought because the profit after investing in Bitcoin depends on many things. Entry price, accumulation period, regular buying and the investor's financial capacity, all play a role in the final outcome. Then nothing is really guaranteed in the unpredictable Bitcoin market. Suppose someone invested $20 when Bitcoin was $20k and later the price became $70k. His $20 became almost $70, so the percentage return is not small about 3x+. But the absolute profit is only about $50. If someone invested $10,000 at the same time, the same percentage move would make a difference of $10,000 for him. So it is more accurate to say here that the percentage return may be the same, but the absolute financial impact depends on the position size. Just because of this, there is no need to think that investing in Bitcoin with a large amount will be a holding. Wealth building for a middle class person is usually not from a one time big jackpot. Small amounts are accumulated continuously and meaningful positions are created over time. If people wait until large capital comes, they often lose the opportunity for accumulation for several years. Rather, it is more logical to start according to their financial capacity and increase the position over time. Although the small starting amount is low , it is much more effective for long term holding. And if you can do from a small amount in the beginning, it is not a problem. But staying in a  fixed small sats can be a problem, he will have to DCA regularly from discretionary income and try to increase the DCA amount as the income increases over time.

[samadam007]

It seems a bit small and even short-sighted to be thinking about bitcoin as a one time investment and then sitting around waiting for profits.

If a guy invests $100 per week for a year, then he has invested $5,200 over a year and $52k over 10 years.  Once we get to the 10 years of investing, then we potentially have something meaningful to think about and to talk about.  We likely do not have much of anything to talk about after 1 or 2 or even several years, since it takes a while to get the bitcoin holdings to a point that the profits from it are starting to seem meaningful, and perhaps after 10 years, any amounts of bitcoin that end up start to be sold are coming from the profits and not from the principle... yet we cannot know for sure until the 10 years have passed if the bitcoin might be valued at the same amount put into it or if there might be appreciation in the bitcoin that had ended up giving more options in regards to how to manage the bitcoin holdings to the extent that any changes in the accumulation of bitcoin might take place or if any kind of cashing out might start to become part of the management of the coins.

Exactly Sir Jay, their focus should be on building their portfolio, not having too much expectations from the few purchases they’ve done or in early stage of accumulation.

When a person has been consistent and accumulated for many years, and the value of his holdings has increased(overaccumulation stage) of course he will have more options open on what to do with his investment… whether to continue accumulating/ holding, take some profit or use part of it for his life goal.

[Crytohillss]

It seems a bit small and even short-sighted to be thinking about bitcoin as a one time investment and then sitting around waiting for profits.

If a guy invests $100 per week for a year, then he has invested $5,200 over a year and $52k over 10 years.  Once we get to the 10 years of investing, then we potentially have something meaningful to think about and to talk about.  We likely do not have much of anything to talk about after 1 or 2 or even several years, since it takes a while to get the bitcoin holdings to a point that the profits from it are starting to seem meaningful, and perhaps after 10 years, any amounts of bitcoin that end up start to be sold are coming from the profits and not from the principle... yet we cannot know for sure until the 10 years have passed if the bitcoin might be valued at the same amount put into it or if there might be appreciation in the bitcoin that had ended up giving more options in regards to how to manage the bitcoin holdings to the extent that any changes in the accumulation of bitcoin might take place or if any kind of cashing out might start to become part of the management of the coins.

Exactly Sir Jay, their focus should be on building their portfolio, not having too much expectations from the few purchases they’ve done or in early stage of accumulation.

When a person has been consistent and accumulated for many years, and the value of his holdings has increased(overaccumulation stage) of course he will have more options open on what to do with his investment… whether to continue accumulating/ holding, take some profit or use part of it for his life goal.

The thing people sometimes over look is that accumulation is one of the process not something that should be conclude by a little buys or short term price movement the starting stage is more about building the habit and consistently increasing people position yes with enough duration and consistency the portfolio itself can begin giving one more flexibility. People are no longer making every decision based on whether bitcoin can go up next week or months.

[Olatundespo]

For you to make very good profit from bitcoin investment you need to accumulate good amount of Bitcoin and then hold it, if you don't accumulate good amount of Bitcoin and there is a very huge increase in Bitcoin price you will not make huge profit, it is only those who used huge amount to accumulate that will make huge amount of profit.

It is just like other businesses, those that use huge amount to invest in a business usually get huge amount of profit and those that used small amount usually get small amount of profit.

Success in investing does not depend only on how much Bitcoin you have. A $100 profit may seem small to you, but it may be significant according to someone else's financial situation. That is why not every investor has the same goal and capacity. In fact, the problem is that investing by calculating profit, it seems a lot like trading. Because traders usually calculate profit from the beginning. But in reality, the main objective of investors is to create a position by buying regularly within their capacity and they try to invest in an amount that will not cause them undue pressure even if the market drops 50%. Bitcoin investment can probably be profitable, but sustainable strategy and the ability to hold it for a long time are the key.

It seems a bit small and even short-sighted to be thinking about bitcoin as a one time investment and then sitting around waiting for profits.

If a guy invests $100 per week for a year, then he has invested $5,200 over a year and $52k over 10 years.  Once we get to the 10 years of investing, then we potentially have something meaningful to think about and to talk about.  We likely do not have much of anything to talk about after 1 or 2 or even several years, since it takes a while to get the bitcoin holdings to a point that the profits from it are starting to seem meaningful, and perhaps after 10 years, any amounts of bitcoin that end up start to be sold are coming from the profits and not from the principle... yet we cannot know for sure until the 10 years have passed if the bitcoin might be valued at the same amount put into it or if there might be appreciation in the bitcoin that had ended up giving more options in regards to how to manage the bitcoin holdings to the extent that any changes in the accumulation of bitcoin might take place or if any kind of cashing out might start to become part of the management of the coins.

We need to manage DCA regularly and work overtime to earn extra money or find alternative sources of income. We need to gain financial strength. I am not just taking the financial issue seriously, not just to accumulate Bitcoin, but to floating money in the future. It is not easy to allocate $100 per week for Bitcoin, which is $400 per month, although it is not impossible to increase our financial capacity by working hard. To save Bitcoin at this rate, we need to earn at least $500-$600 per week.

If you are in a long term DCA method you can apply many strategies, one of that is to buy Bitcoin through lump sum especially when there is a period of price decline. If we can apply this strategy regularly, we will probably reach the over accumulation level before waiting 10 years, as we had set a goal before starting Bitcoin. I completely agree with you that if the value of Bitcoin remains equal to the amount invested before the completion of 10 years, then the new opportunity in holding management is to continue the DCA strategy for a longer period of time without interruption. As long as there is earning power.

[ASloveapg]

I totally understand what you are saying, if someone had bought bitcoin when the price was at $20k and they are still holding it at a price of $70k,  then they have definitely made a significant return. But I still think that we should still be cautious of calling this as “compounding.”  As the market price of the Bitcoin rises, the value of the Bitcoin rises as well, and this is simply because Bitcoin doesn’t generate a regular return that automatically grows over time like compound interest.

If someone invested in Bitcoin when the price was around $20k and the price is currently at $70k plus something now, that doesn't mean they have made a significant profit because what you should consider is what they invested ( the amount of money they invested) because you can not invest $20 to $50 in Bitcoin when the price was $20k and be talking about significant profit because the price of Bitcoin surge to $70k. The outcome will be very small compared to someone that invested some thousands of dollars so it is not just investing but rather the quantity.

And that is exactly why continuous investment should be done here, in fact, if people invest a lot of money at once, they can easily panic, and if they buy a very small amount, their success will not be significant, but instead of all this, if DCA is done continuously with a sum of money of your own ability, then over time your small investment may become larger than you think without your knowledge. Here you do not have to invest a large amount of money at once, due to which there is no possibility of excessive panic here, and therefore it is important to invest through DCA. If the investment is managed through this strategy for a long time, it can create a significant portfolio, and as a result, your success rate in the long term can also be significant.

[Odohu]

I totally understand what you are saying, if someone had bought bitcoin when the price was at $20k and they are still holding it at a price of $70k,  then they have definitely made a significant return. But I still think that we should still be cautious of calling this as “compounding.”  As the market price of the Bitcoin rises, the value of the Bitcoin rises as well, and this is simply because Bitcoin doesn’t generate a regular return that automatically grows over time like compound interest.

If someone invested in Bitcoin when the price was around $20k and the price is currently at $70k plus something now, that doesn't mean they have made a significant profit because what you should consider is what they invested ( the amount of money they invested) because you can not invest $20 to $50 in Bitcoin when the price was $20k and be talking about significant profit because the price of Bitcoin surge to $70k. The outcome will be very small compared to someone that invested some thousands of dollars so it is not just investing but rather the quantity.

Don't you think that you are confusing yourself? Your example is misleading and it is wrong to draw such analogy. If someone bought Bitcoin when the price was $20k and the price rise to over $70k, the investment is in good profits but that does not mean he has to sell. Selling and running out of Bitcoin is what should be discouraged but that should not make use not to call good investment what it is. If your aim is to make people not focus on the profits, then you should present your argument to look logical and not seem confusing.

[Woodie]

There are not multiple strategies that are relevant in this thread, since we are talking about my investment ideas in this thread.

If a guy is still accumulating bitcoin, then there are three ways to buy bitcoin 1) lump sum, 2) DCA and/or 3) buying on dips that might not happen.

If you think that there are other strategies that are relevant, then you need to present them and describe them in terms of my own various ideas about strategies that are fairly limited, especially for guys who are investing in bitcoin and in their early years of building their bitcoin holdings.

I have been reading alot of your posts regarding how people approach their trading journey, I must admit you are consistent with being against option 3 of buying the dips , and I am starting to see things through your lens.. imagine someone believing that they will jump in when price gets to $50K ,price flirts with 65k and it's off to 70K + as of today showing that this buying of the dips is for people with cold feet who use this as an excuse not to take up immediate risk

Btw, how would you advise a young curious student who earns from their part time jobs and has left over funds of $500 for miscellaneous  stuff using the JJ investment strategy ?

[JayJuanGee]

There are not multiple strategies that are relevant in this thread, since we are talking about my investment ideas in this thread.

If a guy is still accumulating bitcoin, then there are three ways to buy bitcoin 1) lump sum, 2) DCA and/or 3) buying on dips that might not happen.
If you think that there are other strategies that are relevant, then you need to present them and describe them in terms of my own various ideas about strategies that are fairly limited, especially for guys who are investing in bitcoin and in their early years of building their bitcoin holdings.

I have been reading alot of your posts regarding how people approach their trading journey, I must admit you are consistent with being against option 3 of buying the dips , and I am starting to see things through your lens.. imagine someone believing that they will jump in when price gets to $50K ,price flirts with 65k and it's off to 70K + as of today showing that this buying of the dips is for people with cold feet who use this as an excuse not to take up immediate risk

Btw, how would you advise a young curious student who earns from their part time jobs and has left over funds of $500 for miscellaneous  stuff using the JJ investment strategy ?

Without knowing more (even whether the $500 is weekly or monthly), I would suggest as a default starting position to put $166.67 into bitcoin, $166.67 into savings and $166.67 into discretionary consumption.

Of course, the exact proportions are a matter of choice that each person has to make depending on how bullish that they might be about bitcoin and/or how strong their back up funds are and/or how inclined they are to consume on a weekly basis.

Of course, if we were investing $166.67 weekly, after a year we would have had invested $8,667, saved $8,667 and discretionarily consumed $8,667, and we could reassess whether we want to change any of those, and surely after 10 years, we would have $86,670 into each of the three categories if we were to have had kept them the same. 

Many things do not stay the same over 10 years, and even our own priorities might change based on how much our bitcoin investment is growing and based on how much our savings is growing, and we surely might not want to have that much in cash, since many times having 3 months of expenses and perhaps a little bit more is sufficiently enough, yet I have found that the larger our bitcoin investment grows, then we also might find some comfort in having more money kept in cash in order to be able to have flexibility during times that the BTC price might become quite volatile in either price direction, and of course, if we ongoingly have a decent amount of discretionary income that is coming in, then we would be less dependent on the use of any of our back up funds that might be largely kept to be able to deal with fluctuations in our income and/or basic expenses.

[BluebloodCXVI]

I don’t think that Bitcoin needs to pay any interests in order for a person to potentially achieve a compounding effect over a long period of time.

If it happens that the asset keeps appreciating and the investor continues to accumulate, the gains that was on the earlier accumulation will become part of larger base that can appreciate further; I wouldn’t say that is compound interest in a technical sense, but the end result can still be powerful.