I didn't invest in bitcoin until years late. I'd like to ask your portfolio holdings if it isn't personal to share.
Of course, we look at bitcoin differently if we have already established some kind of an investment portfolio as compared if we are brand new to investing.
Prior to investing into bitcoin, I had mostly been investing into various kinds of index funds that would be a mixture of stocks and bonds, and then some property and business investments.
When I first got into bitcoin, I created a 6 month budget for myself, so by the middle of 2014, my six months was over, so I largely extended my investing into bitcoin and my budget for another 6 months, so by the time that the end of 2014 came, I was attempting to reassess what I should do, and at that point, I had largely reached around 10% of my total investment portfolio to have been into bitcoin, so I thought that I had largely met my goal.. however, if you look at the charts, you will see that bitcoin prices continued to go down and to stay down through almost all of 2015, so my ongoing buying of BTC during 2015 had caused my BTC allocation to go higher than my 10% preference, and I had gotten up to around 13.5% allocated into BTC by the end of 2015.
I reassessed various times and tried to figure out what to do, an largely I decided
not to reallocate my BTC.. but just let my BTC investment ride and to take various risk management (volatility) strategies within my BTC holdings by selling very small amounts (less than 1% of the holdings for every 10% the BTC price went up) on the way up and using that money to buy back.. so there can be some additional fees in that kind of a strategy, too.
When you've taken risks how did you cap limits? If you didn't reallocate your BTC portfolio it's worked for you, it doesn't mean it's advised to behave as it today. Your BTC investments were successful, innumerable bitcoin purchasers weren't. How did you use indexes to limit risks?
Well, I read your questions as if they might be attempts to figure out how my approach might be repeatable and generally applicable rather than just lucky in terms of my application to bitcoin in a way that just happened to end up paying off for me but might not be repeatable for others, and sure those are fair inquiry areas.
For sure one of the underlying assumptions might concern whether bitcoin remains as good of an investment as it was in its earlier times 2013-2017 (when I was building my bitcoin investment portfolio base). And, surely opinions can differ in regards to whether any of us might consider bitcoin to have a sufficiently strong investment thesis today as compared with its investment thesis in 2013-2017 - and surely I believe bitcoin has just as strong of an investment thesis today as it did in 2013-2017, even if the upside potential is likely not as strong, relatively speaking.. but also its downside potential seems to be weaker today too.. as compared to 2013-2017. Bitcoin has overcome some of the questions to challenge its resilience... and abilities to withstand attacks.. and for sure attacks upon bitcoin are ongoing, even if such attacks are coming from different angles, from different players and with different relative strength.. which still gets us back to questions about whether you individually have enough confidence to buy/accumulate bitcoin and then to maintain a bitcoin investment portfolio that might retain a relatively high allocation to bitcoin. Those are questions that you have to answer for yourself.
Books could be written in response to answering your questions, because there surely are a decent amount of assessment of individual circumstances in order to figure out how much risk that any of us is willing to tolerate or the various other individual assessments including cashflow, timeline and view of bitcoin as compared to view of other assets. ...
>>>When you've taken risks how did you cap limits? <<<<
So there might also be a bit of randomness too.. and if you already have other investments, you may well consider the matter differently from a situation in which you are just starting to invest and you do not have any other investments (just bitcoin and cash). When I first got into bitcoin in late 2013, I had a 6 month budget and the amount that I authorized was my cap.. it was based on how much cash I had available and also how much cashflow I expected to have for the next 6 months.. but it also was not considered within a vacuum.. because the amount that I chose was based on an assessment of how much I had invested in other assets. At the end of the first 6 months, I largely allocated for another 6 months based on largely a similar amount that I had authorized for the first 6 months.. so the second 6 months was largely a doubling down.. and that was my cap for the next 6 months.
I feel like I have already said these things.. and maybe your questions about why cannot really be answered because I can say what I did.. and cannot really answer the why exactly beyond just saying that I accounted for all of what I believed to be my individual financial and psychological circumstances, so by the time I got to the end of 1 year investing into bitcoin, I felt that I had to reconsider what my amount invested into bitcoin should be... and to come to the conclusion that I believed that it should be around 10% - which was largely the amount that I had then accomplished.. but like I said.. I ended up going over that amount in the following year to get up to 13.5%-ish.
>>>>If you didn't reallocate your BTC portfolio it's worked for you, it doesn't mean it's advised to behave as it today. <<<<
Maybe those kinds of questions cannot be answered the same for everyone, even though I believe that I did the right thing for me, and I believe that I would do the same thing over again, if I were faced with the same questions today.. As I already mentioned, part of my motivation has to do with the totality of my non-bitcoin investment was sufficient enough to sustain me at the standard of living that I was already used to.. so.. even if my BTC was growing.. I felt that there was enough in my other non-bitcoin investment to sustain myself.. so yes.. maybe you believe it would be more prudent to sell off or to reallocate back to the original levels... but I found no reason to do that.
>>>>Your BTC investments were successful, innumerable bitcoin purchasers weren't.<<<<
Maybe some folks sold too much too soon? Maybe they did not know what they had? Maybe they could have just held through the cycles? The people who mostly held through the bitcoin cycles have tended to profit quite greatly over the years, and the longer that they are in the more likely that they are in profits. Of course, there are ways to attempt to continue to buy along the way too.. and maybe some folks would not fare as well if they blew all their wadd at the top of 2017.. and then they just sat on their hands for the past 5 years. They might still have $19k BTC costs because they did not do shit for 5 years except for sit on an investment in which they were lacking foresight and buying at the top without taking actions along the way.. because even if someone started buying 5 years ago at the 2017 top, right now they would still likely be significantly in profits, as compared to some hypothetical (not a very likely person) who bought at the top and just sat on their hands and now is whining because they are not in profits.
Let's look specifically, a person who started buying
$100 worth of BTC per week for the past 5 years, would have invested about $26,100, and would have accumulated about 2.3561 BTC - clearly more BTC than the person who would have bought 26,100 worth of BTC in 2017 when BTC prices at $19k.. that lump sum person would only currently have 1.37368 BTC.
It seems to me that there are ways to be smart, prudent and not overly greedy while attempting to manage an investment such as bitcoin in a way that is not psychologically burdensome, but is still sufficiently aggressive in order to be able to profit after 4-10 years of investment .. and of course, if your timeline is longer than 4-10 years, then you are even more likely to profit from your prudent aggressiveness that is not overly aggressive and not overly greedy.
Right now. Where else are you going to put your money? Even one year ago? how would you know that the BTC price was going to go down; however, once the BTC price did go down, then you have to decide from the price point in which you find yourself having to make the decision rather than looking back at the matter or imagining some kind of place that is not where you are at.
I think that my point has always been to error on the side of BTC accumulation and attempting to maintain a large portion of your BTC holdings, even though sure sometimes the overall value had gone down dramatically.. but when you are in the middle of the BTC price going down, you do not know that it is going to continue to go down.. and so you may well be way better off in the long run if you do not try to guess. and yu just continue to error on the side of BTC accumulation.. until you get to such a point that you have a pretty good sense that part of your BTC is in profits and you want to shave some off on the way up.. rather than shaving off BTC on the way down or trying to guess about if you might profit by selling and buying more.. because you may well screw that up, so it seems to have been an ongoingly better practice to accumulate and to continue to accumulate until you get to a decently large stash (relative to your situation) and then you can shave off profits as the BTC price goes up.. and in the event that BTC prices go up, even while you are still able to recognize and appreciate that you are not guaranteed that BTC prices are going to go up.
>>>>>> How did you use indexes to limit risks?<<<<<<
Using Index funds might have partially been a product of not really knowing - while at the same time, taking advantage of something that is available. Many 401ks have a variety of index funds as options, and sometimes there is no real ability to invest in individual stocks for regular people without going through some kind of a broker.. so there is some convenience to going with what is available... and considered to be low cost ways to get exposure to some kind of an investment over a long period of time.
These days there are more options.. but normal people could still get lured into shitcoins because those shitcoins are available and even seem to be relatively low fees and it is not necessarily easy to invest in other areas.. even though bitcoin and shitcoins may well be inspiring some traditional investments to expand their offerings and to be more available to normal people without having to go through a money manager and without necessarily having to pay high fees...
In some sense, my situation would be different from someone coming into investing today, since bitcoin is currently available... so I had largely built my various traditional investments with some of the more limited products that were available.. including largely erroring on the side of index funds... even though surely sometimes there can be ways to attempt to choose your own kinds of stocks through some services that would have still been available 20 years ago.. but I ONLY limitedly dabbled in trying to figure out if there might be some specific stocks that I could buy and instead just did the lazy (dumb) person's way to choose index funds.
Investing 10% of your income isn't a bad strategy, you acted on what you thought was good to do. It's about experience & risk taking. When you're investing you enter learning & discovery phases in life. By out-pacing inflation in some increases your investments were wise.
Well maybe there were times in which I might have ONLY been making small amounts of money, so figuring out how to construct some kind of a savings plan, and so sometimes when my income went up at later points in my life, I did not feel that I needed to buy a bunch of stuff, so I could invest way more than 10%.. and maybe even getting up to periods in which I was investing 30% or more... but it was good to always have an ongoing practice of investing.. even though I believe that there were several times that I made mistakes in terms of taking some of the investment money and believe that I was investing into solid projects, when those investments were not very good... so for sure, over the years, mistakes can be made.. and even sometimes not very good management of where to put the money so that it could grow without too much risk.. .. but sometimes there would still be needs for some risk.
Your monthly investments built your portfolio. Risk taking's part of investing but losing 30% range of income isn't worth risking.
What the fuck are you talking about? I thought that I had already sufficiently explained this. If I had a lifestyle and an income in which I had grown accustomed to a certain standard of living, and let's say that I had been used to living off of $3k per month ($24k per year), and at that point I had been investing 10% of my income into something (doesn't really matter what it is.. it can be bitcoin or whatever it was that I had chosen to compose of my then investment portfolio), so that would be $300 per month. And, if all of a sudden my income doubles, and it goes up to $6k per month. All of a sudden, I have $3k per month more. So I could decide to invest half of my income into my investment portfolio each month instead of 10%, and my standard of living would not change, because I still had the $3k per month that I could use for my regular living expenses.
Part of the dilemma that anyone has concerns how much to invest versus consume when income or cashflow goes up or maybe even if expenses go down, so such person is not necessarily increasingly burdened to be investing more money merely because the available amount of money has gone up. .. It seems to me that the problems would more likely come if more money is allocated to investing even though the income has not actually gone up... or if there comes times in which a person might go into debt or even push limits regarding how much to invest because s/he is relying on the investment value to go up in order to service debt or to pay for expenses that should not have been entered into because s/he was overly investing or failed to account for his/her expenses and/or failed to actually establish and maintain a sufficient/adequate emergency fund.
Charts show prices a year ago Bitcoin cost $46k. It's $17k presently. Investors capitulated accepting losses because they've paid high to buy. You've learned from your mistakes but a cluster of investors weren't lucky they've sold with hard consequences.
Something is wrong with your assessment - because when I got into bitcoin in late 2013, it took more than 3 years for my first BTC purchase to become profitable... So I bought my first BTC at $1,200 in November/December 2013 and the BTC price did not get consistently over $1,200 until April 2017.. so that is close to 3.5 years... but I was not complaining of whining about my BTC being in the negative... instead I continued to buy BTC through that whole time, so by the time April 2017 came, my average BTC cost was less than $500 per BTC.. and of course, I had some other issues during that time too.. . but the punchline is that anyone coming into BTC with a long enough investment timeline of 4-10 years or more, should not be getting worked up if his/her BTC holdings happen to be in profits or not, but instead perhaps recognizing, understanding and appreciating some of the value in terms of being able to continue to accumulate BTC and to bring down his/her average cost per BTC with each purchase. especially if the BTC price is 50% or even 75% lower than the price of some of his/her earlier BTC purchases.
I doubt that overly worrying or considering whether the current BTC holdings are currently in profits is a very healthy perspective in regards to investing in BTC or planning to hold BTC for the long term, and surely it could be that BTC is not the right investment or even a very suitable investment for some folks who have not figured out some financial and psychological strategies in which they are able to consider how to plan to take advantage of lower BTC prices without engaging in gambling behaviors.
If investors bought at $40k and then they sold below $40k or even down in the $17k or sub $20k, then good riddance to them. They are dumb, and they likely over-invested..
None of us can stop people from being dumb and from losing money on their investments. including investing into BTC.. including investing money that they need in the short term.. and yeah.. maybe they should have ONLY invested $10 per week rather than $100 per week. or maybe they should have DCA invested rather than lump sum invested.
When people ask me about bitcoin, I frequently tell people to get started right away.. and I give little shits if the BTC price is $69k or $17k.. even though it seems that it would be better to get started now, but people who invest into bitcoin have to figure out some kind of an investment strategy that works for them, even if they started investing into bitcoin at $69k in November 2021.. Hopefully they did not put their life savings in at that price, and if they did, then they may well have to wait a long before they are able to get into profits.. and what can we say when people do dumb things, and they ONLY plan for the BTC price to go up or to go sideways or to ONLY go so far down.. but then bitcoin goes further down then their expectations and they have no plan for that? What can we do? Feel sorry for them for being dumb? Feel sorry for them for overinvesting? Feel sorry for them for not preparing (psychologically or financially) for down? What?
I am not going to take back my advice (or suggestion) for people to get started right away.. and each person is responsible for their own actions.. in terms of how much they invest and how they make their various preparations. For sure I am not suggesting for anyone to invest in shitcoins, even if there might be some shitcoins that might perform better than bitcoin in the short term. I am ONLY talking about investing time and money and psychology into bitcoin, and each person is responsible for themselves in terms of how they go about making those various investments.. even though I might be willing to help them out in various ways if they are really in need of help... perhaps I will? but I am not going to take responsible for their choice to invest, even if I said to get the fuck started right away. If I were their money manager, then maybe it would be a different story? If I could see that they were doing dumb things like leaving a bunch of money on exchanges, I would tell them that was not what I was suggesting for them to do.. because it can take many years to really learn the specifics about how to invest into bitcoin and how to manage various personal risks when it comes to bitcoin, and I am not responsible for what others do, even if I tell them to get the fuck started as soon as possible. Don't wait, but you are still responsible for any action that you take, even though I am saying to act sooner rather than later. What a bunch of contradictions, no?
What's the reason for portfolio investment? A proportion of profits shouldn't be banked. Extra dividends can bring luxuries in increasing consumption honestly earned by investors. Life needs to be lived.
You can build up your investment portfolio and you can also live at the same time.. it is not an all or nothing proposition. You can have some money in banks and some money that earns interest and some money in property or businesses, index funds and now days we have bitcoin... so then each of us have questions regarding how large our investment portfolio already is and how much of that we might want to put into bitcoin, how much cash do we want to have available or floating. When I was younger, I did not need to have a very large float and I could project shorter periods of time forward, but it seems that as I grew older some of my finances and some of my financial instruments, business and family arrangements have caused me to have more complicated finances, so instead of projecting my cashflow out 6 months, I tend to project my cashflow out a couple of years, even though of course, the next 2-3 months are more urgent than later down the road, but if you do not project out ahead, you might not realize whether you might have a cashflow problem that might be coming up several months down the road...or even to figure out some of your potential cashflow issues a couple of years in advance can be helpful in determining how much of a cash cushion that you would like to keep on a regular basis and how much you want to keep in whatever emergency funds that you have so that you do not have to dip into your bitcoin investment at a time that is other than a time of your own complete choosing.
Holding cash cushions proved reliable ingredients in your planning. By circumventing dips from portfolio funds using careful cashflow projections you've helped your portfolio flourish.
I was making the point that it takes years to learn better techniques, but anyone has the capacities to figure out ways to manage their cashflows... No one should be investing with money that they need for living expenses, so before they even invest into anything (whether BTC or otherwise), they need to figure out their own budget, including how much extra that they have. Are they able to spare $10 per week or $100 per week, or $1000 per week or some other amount.. If they have cashflows and cash management that is so screwed up that they cannot even figure it out, then likely they need to get their cashflow in order before they do anything..
and I am not even saying that anyone for sure has to wait to invest into bitcoin because some people might know that their cashflow is messed up and they are not sure because some months they have an extra $3k that they could spend, and there are other months that they are $3k in the negative, so their cashflows are erratic.... So some of those folks still might be able to make some ballpark considerations that they are able to start investing into bitcoin and to figure out their cashflow particulars as they go.. but if they start to invest into bitcoin, an they do not get their shit together, then they may well end up putting themselves into a position in which they have to sell their bitcoin at a time that is other than completely their own choosing.
I'm concerned for new investors they won't recover from losses incurred because it's a risky business.
Of course, investing into bitcoin is risky.. And walking out of the house each day is risky too. There are all kinds of risks in life, and there are a lot of ways to engage in practices that mitigate various kinds of risks and/or to offset risks.
Actually, right around the first 6-8 months that I was into bitcoin and I was learning about bitcoin, I did not really tell anyone about bitcoin, however, starting in about mid-to late 2014, I started to tell people about bitcoin (friends, relatives, acquaintances), and to suggest that they look into bitcoin and maybe do something similar to what I had been doing in terms of investing a portion of their income into bitcoin. So many of those people would be way better off right now, if they had just invested a modest amount into bitcoin,
such as $50 per week. They would have invested right around $22k and would have accumulated right around 20 BTC. Anyone going to complain about those levels of returns of merely investing $50 per week over the past 8.5 years?
What I am saying that managing and/or modifying risk does not necessarily suggest that a person should stay out of an investment, such as bitcoin, but instead may well suggest that the person figures out the size of the investment that is comfortable enough for him/her at such a level that feels sufficiently aggressive, without necessarily being overly-aggressive.
Trading isn't as easy as it's portrayed.
I am not telling anyone to trade. I am saying get the fuck started.. and then accumulating BTC and to figure out how much is a good position size an then the build up towards that BTC position size in a way that is comfortable.. which largely from my perspective is a buy only strategy... so figure out various ways of buying and continue to study bitcoin along the way.. and if at some point, the person wants to go beyond buying strategies, then that is on them to figure out how to manage those kinds of practices.
Sure, I mentioned that I sell BTC on the way up and buy on the way down... but that surely is not any kind of a base investment case, because a person needs to get to a point in which s/he is sufficiently and adequately allocated (and perhaps even overly allocated) into bitcoin before it makes any sense to sell any BTC. So my first couple of years in bitcoin, I did not sell any.. except to sell and replace.. or replace within a few days if I did sell some or use any BTC to transact.
I later considered adding some formulas for selling on the way up, but those are in no way base case ways to accumulate bitcoin but instead volatility insurance plans.. but they are likely not even a good practice until someone has been in bitcoin for a sufficiently long enough time to accumulate a decent amount of stash, to potentially be over-allocated and/or to have some or all of his/her BTC stash in profits.
I don't consider myself as a trader, and I don't suggest selling BTC as a means to attempt to accumulate more BTC... especially not as beginning strategies and especially not as base strategies absent potentially meeting a variety of conditions in which there might be some practicalities for a newbie to consider selling some BTC on the way up (or in some other situation) with expectations of buying back at lower prices, but it is surely not even close to any part of a base case for ways that I would suggest to get into bitcoin and to establish 4-10 years or longer investment strategies and practices.
The more bitcoins available, the easier it is for people to buy. The lower the price, the easier it is to get it especially for The strong hands.
Increasing supply of Bitcoin in the market will indeed make it easier for everyone to buy it, especially if the price is still low. But if there is more demand in the market it will greatly affect the increase in the price of Bitcoin itself. Because an increase in price can be caused by two things in the market, firstly because there are not enough sellers and secondly because there are many requests at higher prices so that price changes can occur so quickly.
The question is whether this will increase the level of resistance higher for each dump, especially during the current period which is very vulnerable to correction??
Resistance will occur when there are more buyers in the market or when there is an increasing amount of demand in the market for Bitcoin. Because with this, corrections or dumps will slowly disappear due to resistance from more buyers.
Your use of the term "resistance" is confusing wmaurik.
When we are talking about the difficulties of the BTC price to go down, we are referring to "support" (not "resistance'), and when we are referring to the difficulties of the BTC price to go up, then that is when we use the term "resistance.".. so price sticking points is referred to as "support" on the way down and "resistance" on the way up.
You have very well explained theory of support and resistance chart. I would add a single line that traders usually buy on support, and sell on resistance to book their profit. Having said that, Long term investors don't bother much about technical charts and they accumulate Bitcoins on every major dip. I think buying Bitcoin when it crosses 200 DMA (daily moving average) and makes few green candles on on day chart, is also good strategy because it is generally considered beginning of bull run but we should always keep in mind that technical analysis is science of probability, not certainty.
