Yeah, maybe I am describing a scenario that was even better than what you ended up doing, but we can still get the idea that sometimes we make mistakes along the way in terms of how we might handle our BTC (and our psychology), even if we might have made overall dollar profits, we sometimes might have suffered a lot because our plan was not strong enough or even seemingly sustainable enough.
So yeah.. then the question become... whether to rebuild our BTC holdings and how to go about doing it in a more sustainable and less emotional way, including attempting to account for a longer rather than shorter investment timeline in regards to our BTC holdings.
Thanks for that, and yeah, I did start getting BTC in 2016 -- not long after this forum account (had an older first account but I can't even remember the username and it was before I was even really interested) was made. I actually did all the right steps, inadvertently... getting BTC as frequently as I could, before price went above $1000 and even throughout 2017 and 2018. If I got any alts, it was because clients couldn't pay in BTC so I never said no.
Mistakes I learnt from was in 2017/18, was actually investing some of that precious BTC into a couple of projects. I guess many of us made that mistake. Glad I learnt that lesson though, I just don't do any of that now.
I understand that we are starting to deviate a bit from the topic, yet I still consider that these kinds of personal BTC investment portfolio management decisions are important in the abstract, and they also can have some relationships to the topic of this thread in the sense that bearish, contradictory or even quasi-incoherent statements from otherwise credible sources (referring to Taleb here) can sometimes contribute towards our failures to buy as much BTC as we otherwise would, to sell too much BTC too early, and/or not even realize/appreciate that we are selling BTC when we are "investing in projects" that might even be BTC related projects.
I have found that if we do not purposefully work towards paying attention to our investment into BTC is not sufficiently maintained, then there can come about circumstances in which our BTC investment is little by little eroded away and before we know it we have way too little exposure/stake into it.
It is so difficult to know how much that is or how much it should be, and I am pretty sure that between about late 2013 and early 2017, I was somewhat maniacle in regards to making sure that I replaced any BTC that I spent, so I was kind of focused to always be increasing my stash, so even if I sent someone $5 worth of BTC so they could get started with BTC, I would be sure to replace at least the balance of BTC that I sent and maybe even use that as an opportunity to increase my stash by a little, so maybe I would replace it with $7 worth of BTC, so in the end, I had gained $2 in BTC by engaging in that sending of BTC. I might not have even been correct in the way that I was thinking about BTC, yet there was an incident (Sims porting) that happened to me in early 2017 that contributed to my concluding that I already had way more BTC than I needed anyhow - and allowed me to become less obsessed in making sure that I replaced every BTC that I had spent.
Another couple of things happened to me earlier in my bitcoin journey in both late 2014 and then mid-2015 that caused me to think about my BTC stash somewhat differently and had been building me up to my further attempt to detach from my somewhat obsession to continue to build my BTC stash that had been in place in early 2017 prior to the sim porting incident that ended up resulting in a decent amount of BTC that were taken from me in such a high quantity that I knew would be practically (and psychologically) impossible for me to even try to replace those BTC without really screwing up my finances (and putting too much psychological pressures on me).
In late 2014, I had already been accumulating BTC for a whole year, and I had not really been sure about what my BTC accumulation targets should be because in late 2013, I had provided myself a specific dollar amount budget to invest into BTC for the next 6 months, so in May 2013 when I assessed that I had pretty much spent that whole 6 month budget, I gave myself another six month budget that closely matched the earlier 6 month budget.. So therefore by the end of 2014, I was in a position that I had to reassess again having had used earlier two budgets for each of the two earlier 6 month periods, and I determined that if I look at the size of my overall investment portfolio, then my target should be to have the amount that I invested into BTC to constitute about 10% of the total of that overall investment portfolio, and so therefore at the end of 2014, I had realized that I had reached my 10%, so therefore I had no more needs to feel obsessed with continuing to have to accumulate more and more BTC, and even though I reached that determination - I still could not stop myself to continue to accumulate BTC through 2015 and by the middle of 2015, I had reached close to 13.5% of my total investment portfolio was in BTC, which therefore inspired me to recognize and appreciate that I had overinvested into BTC and therefore I could create a system in which I could shave off portions of my excessive amount into BTC without having to worry about having enough into BTC so long as I stayed above 10% in BTC.
I am not sure about the point that I am wanting to make, except maybe to show some scenarios in which any of us can end up creating a whole bunch of mental gymnastics for ourselves in terms of either attempting to justify what we had been doing, what we continue to do at the time of thinking about what we had been doing, and then how we are going to plan to go forward in terms of whether we need to tweak in terms of trying to either accumulate more BTC, to just maintain where we are at or maybe we might conclude that we need to shave off some of our BTC holdings in order to align ourselves with where we are at and where we believe that we want to go.
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The punchline might well be that each of us is on a kind of spectrum in terms of our level of obsession of BTC and how much we might consider our own valuations to be reached, so you might well have been less obsessed than me, and I consider someone like Michael Saylor to be way more obsessed than me in terms of percentages, but there are other ways to frame the matter too... so maybe I am just starting to go all over the place and deviating from the topic way too much.
2020 liquidation was enforced. I had no choice. So that was really bad luck.
Maybe my mind is not creative enough, but I am really having trouble understanding this part. You might have been on a whole different plane than me, and I suppose that part of the reason that I had outlined the earlier hypothetical was an attempt to describe a situation in which some ordinary person who is just buying BTC and then selling too much on the way up might find himself/herself in a kind of psychological and financial pickle by selling too much BTC on the way up, and then the BTC price does not come back down to their sell point, and in my case I picked $30k-ish in order to give you some benefit of the doubt that you might have been able to at least get some profits along the way and even get above our previous ATH (of $19,666 from late 2017) before seemingly reasonably going to zero BTC or close to zero BTC.
I know that there are normal and even reasonable people who would have sold all of their BTC way earlier than $30k in late 2020.. right around the time the BTC price had crossed back above $20k-ish in mid-December 2020. There were a lot of those folks in late 2016 and early 2017 too, when BTC was approaching getting back to $1k, there were so many folks explaining how they would be selling all of their BTC prior to $1k because they considered that $1k was not sustainable so they either wanted to take profits or to even buy back when they presumed that the BTC price would go lower and even return to below $500 prices. Similar kinds of dynamics happened with our going above $20k in late 2020 - however, going back above $20k did end up playing out in quite more violent ways in regards to never really returning back down to anything even close to $20k. In late 2020 and into early 2021, we pretty much got a non-corrected BTC price rise up to $42k, and then a correction down to $30k in January and then even a later correction down to $28,600 in May/June 2021, and so we did not get any kind of correction back down below $30k-ish until way down the road - which would have been June 12, 2022-ish - which is pretty fucking weird if I do say so myself, and I think so many folks have been surprised by how wickedly out of expectations our most recent BTC price correction has so far ended up playing out. .which surely could end up providing opportunities to get back in for folks who both got out of BTC in late 2020/early 2021, and who had not gotten back in.
So my points had been that there were so many ways that any of us could have gotten pretty damned wrecked psychologically and financially even run out of our BTC position by engaging in somewhat normal behaviors in terms of wanting to take dollar profits on the way up to $30k and reasonably expecting a correction that largely did not end up happening until our most recent seeming fluke..
But you, buwaytress, are describing your own personal circumstances as seeming to be even more bearish and maybe even more degenerate gambling.. hahahahahaha.. hate to start calling you names because sometimes I start to become a wee bit too hostile towards folks who insufficiently and inadequately prepare for UP, and from my perspective, even if you want to fuck around with trading and take various somewhat bearish stances in respect to bitcoin (maybe we are getting back to the Nassim Taleb perspective here?), for anyone who claims to know anything about bitcoin (studied it for 100 hours or more..
a kind of arbitrary number admittedly) there should be some level of BTC allocation in the portfolios of all of us that are both allocated in BTC and also to always be there.. so yeah, maybe someone who is really negative about BTC might ONLY have 1% (or god forbid, only 0.5%) into BTC at all times, but yeah, maybe I am showing some of my close-mindedness and overly bullishness too..
Getting back to your point about 2020 liquidation enforced (apparently at the $20k-ish price point) buwaytress, I don't know how any liquidation can be enforced unless you had been betting on down.. like some kind of a short position that you might have taken earlier on but you were in a kind of forced stop if the BTC price crossed above a certain price threshold.
How else could there be any kind of enforced liquidation when the BTC price was going up?
Upon reflection, I will likely disclose up front that I am likely not even going to call anyone any kind of names, including you buwaytress, even if you have really bearish ideas about bitcoin, and consider it practical to bet against bitcoin, and probably my greater inclinations to want to call names to guys like Nassim Taleb is because he seems to have a tendency to talk outside of both sides of his mouth, and so he has tendencies to spout out quasi-incoherencies and so invoking some of his academic status in the process.
On the other hand, forum members will sometimes change some of their perspectives in regards to the bullish case for bitcoin, which will also change their practices too... whether that is selling too much too early or even betting against BTC with the use of margin or leverage (and god forbid naked shorts which seem to be some of the modern tools that have become more and more available)... In regards to naked shorts, I would love to see a $10k or even a $20k daily (or even 3-day) UPpity candle that would likely reck the fuck out of quite a few naked shorters, and we should recognize that bitcoin is surely capable of such explosive upward price performances (even Nassim Taleb likely fears those kinds of dynamics because he may well even honestly be able to recognize that some of the ongoing removal of BTC from exchanges has decent chances of contributing towards UPwards BTC price explosions and that seems to be part of the reason
(giving him some benefit of the doubt) regarding why he can both be bearish about bitcoin and admit that the BTC price could go to $100k at the same time).
By the time ATH arrived, I really didn't have much at all to make any kind of killing, and as I said, that liquidation sort of took my motivation away (imagine selling the same price as 2017 and then missing out on ATH by 11 months).
I can surely relate to anyone getting themselves into a kind of psychological and financial pickle, and surely some folks cannot ever get over some mistakes that they had made in order to end up buying at a BTC price that is higher than the price that they had ended up selling.. We have so many examples of those kinds of folks in history, and some of them participate in this forum in very bitter ways (to the extent that they can even admit to themselves that either they made mistakes or that there might well be justifications in terms of buying back at higher prices than the sold prices).
From my perspective, we should try to NOT let our past mistakes inhibit us in any kind of sunk cost fallacy way - even though I understand that there are some psychological tensions in that regard.
Nonetheless if we feel that we can reasonably establish a bullish case for bitcoin, then the question largely becomes how much and how to invest rather than whether to invest. I will note here that there are also people who proclaim that bitcoin is way too damned volatile and/or that they have some of their own financial issues, but still the prudent and reasonable conclusion may well still end up being how much and how to invest into BTC rather than whether to invest.
My off the cuff categories of BTC accumulation and building a BTC allocation target is to attempt to establish a target level (whether that be 1% to 25% of the total investment portfolio) and a timeline to reach that target level, and the target investment can be considered both in terms of how much to put in and whether price appreciation (or depreciation) will affect how to evaluate the reaching of target levels, and sometimes the target levels could be reached fairly quickly because the amounts to move around are not that great relative to resources available.. and also there can be decisions whether to actually take from some existing investments or ONLY to invest based on the inflow of new cashflow or a combination of both, but then other times it could be decided that a various intermediate goals might be more practical to establish.. besides what to do more immediately, there can be targets for 3 months, 6 months, 1 year, 2 years, 5 years, and/or some other timeline targets.
The three main tools for BTC accumulation are DCA, lump sum and buying on dips, and surely they can be planned out in various ways from the start and even have differing degrees of emphasis as targets are reached. and of course, making so many plans at point 1 does not lock any of us into having to follow our previously established plans at point 2, so there can be aspects of our plans that are more rigid and other aspects of the plans that are more flexible and to be determined based on later conditions that become known at point 2, but were not known with any level of certainty at point 1.
Planning, following the plan, reassessing and tweaking the plan can be very empowering, even though there can be quite a bit of time used in the process and even a lot of confusion in terms of even having to deal with learning about yourself and attempting to tailor your plan to your various strengths and weaknesses... some of which might not be so clearly known, but going through the process of planning, carrying out the plan and reassessing can surely contribute towards our getting to know ourselves better.
Individual considerations in regards to making BTC investment plans include but are not limited to cashflow, other investments, view of bitcoin as compared with other investments, timeline, risk tolerance, time, skills and abilities to strategize, plan, research and learn along the way including tweaking strategies from time to time to consider trading, reallocating, use of leverage and/or financial instruments.
The first ones on the above list are more basic, and the later ones on the list are more advance, so of course, on a personal level, I have frequently striven to get the basics in order before getting into the more advanced techniques. And more advanced does not mean that such techniques need to be employed merely because we might consider ourselves to be a sophisticated player or that they should be done just because you know how to do them.. From my perspective, it is not a matter of how smart a person might be but a matter of figuring out adequate and appropriate proportion in terms of if any of the more advanced techniques (which includes selling on the way up) are actually employed before getting the basics in order first. Including there are likely ongoing needs to revert to contemplating the basics when market conditions are in a difficult to determine place and if you may well have uncertainties about some of your own circumstances based on such volatile and potentially wild market conditions..
But now we're back here, and I'm really asking the question as you put it, how to rebuild, should I rebuild, and how not to make sure another 5 years or so goes by without me just getting so much heartache. Perhaps, how to account for emergencies so you don't feel so demotivated when your plans don't follow the script.
Yep.. We always should make sure that we have some kind of adequate and sufficient emergency way of funding matters in order that we never would have to dip into our BTC investment except during times that are completely of our own choosing... and once we get to a reasonable allocation in bitcoin and even feel that we have a large enough stake in bitcoin, there can be reasonable and prudent ways to shave some of the profits off along the way up without devolving into gambling-like practices, and surely I become skeptical of the logical justification to sell BTC on the way up that would come prior to really having established a decently meaningful BTC stake, and I am also quite skeptical of any assumptions that people sell their BTC and expect that they are going to be able to buy back at lower prices.. sure it may well happen that any of us might well have sold some BTC on the way up and then end up deciding to use the proceeds from those sold BTC to buy BTC back at lower prices, yet my personal approach to BTC has never including selling on the way up and planning to buy back lower as any part of my intended plan at the time that I sell BTC and my presumption is that any BTC that I sell are not expected to be bought back at lower prices... so in order to even get to that kind of presumption, then there is likely a need to either be well into BTC profits (in terms of dollars) and/or likely in a kind of overallocation into BTC status... such as having 60% or more in BTC when the initial allocation might have been 10% or something like that.
I also consider that BTC is such an asymmetric bet to the upside, so in that regard, none of us should feel that we really have to be taking a large stake in bitcoin in order to potentially profit stupendously in a 4-10 years or even longer timeline.
In traditional non-BTC type investing practices, many folks may well set a 30 to 40 year timeline to build up their various investments in order to potentially be able to retire or to say fuck you to working further and to live off of their investments, whatever those may have been. There are a lot of folks who do not reach their targets, and end up having to considerably downsize their living style or even to have to work longer than they had expected because their investments do not end up working out (or they failed to follow anything close to a reasonable plan.. and hoping to win the lottery rather than really following some kind of prudent and reasonable plan).
I personally believe that with the existence of BTC (even if we are ONLY getting into it now), any of us have the potential to not only reach fuck you status, but to cut the timeline down considerably in our abilities to reach fuck you status.. and sure, there is nothing wrong with being a wee bit aggressive with our strategies in regards to our BTC accumulation strategies, but each and every one of us needs to exercise enough prudence and reasonableness that we are not engaged in overly rushing the progress that causes us to gamble rather than invest. So yeah I think that $100 per week is reasonably prudent for anyone with a decent income to get started into BTC and there can be some individually tailoring or even rethinking those kinds of matters down the road, and surely if we are ONLY able to put in $10 per week or even a lower amount because we hardly have any kind of cashflow, then we better not be putting in $100 per week if we can ONLY reasonably afford $10 per week, and we better get our financial shit together before raising our amounts to higher amounts, and surely there are some folks who neither have the cashflow and/or they are not in any kind of place in which they can expect to invest higher than $10 per week, and maybe even for some of those folks, they have to really consider that less than $10 per week is more practical and prudent for them in terms of how aggressive that they are really able to be.
So, I guess this last point is that there can be ways to establish some personally tailored ways to be sufficiently aggressive in getting into BTC, and not resorting to gambling and also having some decently good likelihood that getting into BTC has contributed towards your getting in a better place 5 to 10 years down the road and even longer timelines.
