Diversifying activities with Bitcoin is already risky and can cause money loss while if diversifying your money from Bitcoin to altcoins, people will have so big risk of losing their money. Altcoins are very sensitive to lose their values, prices and even death during a bear market or after one or two market cycles.
When we talk about diversification, we are talking about putting your money into a different line of asset in order to limit the risk of putting all your money in one asset so that if that asset depreciates the other might increase and balance the loss.
Bitcoin and shitcoins are in the same line. Bitcoin is supreme over all and controls shitcoins price movement making it useless to diversify into shitcoins if not, it will be a double loss for that investor. Therefore, if you want to diversify, you should diversify into bond, stock, equities and cash equivalents. You should only diversify when you have accumulated more than 50% of your bitcoin target.
Diversify to an asset that you have the knowledge about and not to an investment you don't have the knowledge to avoid mistakes that will lead you to losses and regret.
It seems that one of the main purposes of diversification is to preserve and safeguard your wealth rather than growing your wealth.
Any person who is new to bitcoin investment may well not have very much wealth to preserve, so they have to figure out ways to grow their wealth before preserving their wealth becomes a focus.
When we are in our early stages of buiilding our bitcoin wealth, we do engage in some preservation efforts, which relate to our building and managing of our cash reserves... as our bitcoin grows, perhaps over several years and even after more than a whole cycle, we might start to feel that we are builiding our bitcoin value and then also keeping more and more cash, yet we might feel that some of the cash needs to get put to work or to be put in places where it is not necessarily losing value.. so we are considering those various back up funds in terms of their liquidity (how easy they are to access) and their volatility, how much they change in value relative to our various expenses...
In our earlier years of building our bitcoin investment, any extent of diversification beyond our various back up funds, might not seem necessary until both our bitcoin investment and our various back up funds are starting to grow to such extents that it might start to make sense to hold various funds in different forms.. which would likely end up affecting both their liquidity (how long it takes to access them) and/or their volatility (how much they are changing in value relative to the currency of our expenses).
Emergency fund is never to buy bitcoin with, using our emergency fund for BTC purchase is gambling. Emergency fund should be use to sort out real emergency when it occur since it's what comes unexpectedly so the money should for emergency should also be kept ready so we can't sell our bitcoin investment when it's not due time just to settle out our unforseen problem.
Investing in BTC required discretionary income this is the fund use in buying bitcoin, our reserve fund is also an option to buy bitcoin with and definitely not our emergency fund doing this is gambling.
Any funds already allocated for a specific purpose should not be diverted to other goals that are more divergent from our original intentions. I also disagree with using emergency funds to buy Bitcoin, but we should also prepare funds for buying Bitcoin just as we would prepare an emergency fund in our own lives. And every investor who has such preparation will usually not be wrong in using their own funds for certain things, but at this time I am more looking at the majority of people who are taking advantage of the Bitcoin price condition at $90K to buy because that is a price that should still be considered low by everyone before the next price increase occurs again in Bitcoin.
In recent weeks after a sharp decline I believe Bitcoin's price remains relatively low and is worth buying in large quantities, regardless of the method used to accumulate Bitcoin, However I still agree with those who want to get in now.
Regarding emergency funds, I don't think we need to allocate too much, Just a small amount is enough to be prepared in case something unexpected happens, Otherwise we must still manage our finances well, including investing.
Even though you seems to be acting like you have everything figured out, you don't seem to know what you are doing @jems.
Money just comes out of no where to resolve matters of investing on the dip and also increasing our level of exposure based on somehow being able to find money.
Also, from your perspective, no need to worry about back up funds or anything like that since the price is guaranteed to go up. blah blah blah.. famous last words of guys who are not able to survive through ups and downs because they are too busy presuming that they have everything figured out and/or that everything will work itself out no matter what we do, even if we do dumb shit in regards to our cashflow management.
Not at all! This diversification can't be into any shit coins. In my opinion, this diversification can be in other sectors like agriculture because one can only have Bitcoin investment in the crypto sector without thinking of any shit coins..
When matters like this arises, the first thing that should come to your mind is, if shitcoins are investment, when we say diversification, are to mention gambling, as far as I know, shitcoin is just like someone trying to gamble his money of course such person would have known what the outcome might be like, so if we want to diversify or must diversify, your suggestions are correct and I see it a good advice to any person that has overaccumulated Bitcoin as people do say, pls sir @JayJuanGee, I want to ask if there is anything like overacumulation of Bitcoin,
Yes. There are ways to overaccumulate in bitcoin, some of the overaccumualtion relates to mistakes in which a guy might not have had been balancing out his finances properly, so then he is not able to cover his expenses.
Another kind of overaccumulation relates to when guys have reached a status of having enough or more than enough bitcoin so that they can start to live off of their bitcoin.
The second state of overaccumulation as mentioned above is better than the first state, since we should never want to wreck ourselves before we are able to get to a status of being able to live off of our bitcoin.
I, personally, try to suggest that guys completely avoid shitcoins and/or the trading of bitcoin, yet if they are going to engage in those kinds of activities or even both of them, they should limit their trading, gambling and/or shitcoining to less than 10% of the size of their bitcoin holdings (including how much energy and/or time that they might invest into such), and without cheating and without continuing to draw upon their bitcoin when they lose in their trading and/or in their shitcoining.
One of the problems (difficulties) with those attracted to trading (gambling) and shitcoining is that they might not be able to limit their gambling tendencies.. so they will get lured into putting more than 10% of the size of their bitcoin (and also their time and their energies) into such trading (gambling) and/or shitcoining activities.
Of course it can take years and years and years to really build up a bitcoin investment, and the building up process may well take longer when guys are considering that they are able to employ short-cuts that most likely won't work out for them, yet since they are gambling there are always the odd chances that they might get lucky.. so they may well be tempted and lured in by the possibility of luck rather than building their skills and building their systems that takes longer to play out.
Even a guy who might be earning $30k per year, and if he is investing $100 per week (that is 17% of his income) into bitcoin, he may well take 7-ish years before he puts in a whole year of income into bitcoin.. but then depending on how the bitcoin price also does during that time, so there sometimes can be temptations to either tap into the bitcoin investment and/or even sometimes putting less into the bitcoin investment based on considerations BTC price movements that might distract from continuing to build up the bitcoin stash.
The guy might have goals to live off of his bitcoin holdings at a rate of $30k per year, or maybe he wants to live off of his bitcoin holdings at a rate of $80k per year, and either of those are reasonable and reachable.. yet sometimes guys will screw up their own plans and preparations along the way, since there are even ways to get beyond expectations in terms of size of their bitcoin holdings and how much their bitcoin holdings would be able to sustainably support in terms of withdrawal once the person is getting near such levels of being able to start to withdraw from their bitcoin holdings either in price-based systems of withdrawal and/or in time-based systems of withdrawal.
Also some guys will sometimes mistakenly conclude that they made it prior to making it, or they might in other ways withdraw too much of their bitcoin too soon in order to screw up their having had made it and to set them back to put them back into bitcoin accumulation status when they should have had advanced to either maintenance status or to sustainable withdrawal status.
Not at all! This diversification can't be into any shit coins. In my opinion, this diversification can be in other sectors like agriculture because one can only have Bitcoin investment in the crypto sector without thinking of any shit coins..
When matters like this arises, the first thing that should come to your mind is, if shitcoins are investment, when we say diversification, are to mention gambling, as far as I know, shitcoin is just like someone trying to gamble his money of course such person would have known what the outcome might be like, so if we want to diversify or must diversify, your suggestions are correct and I see it a good advice to any person that has overaccumulated Bitcoin as people do say, pls sir @JayJuanGee, I want to ask if there is anything like overacumulation of Bitcoin,
Diversifying your investments can be a smart move, but not at the initial stage of investing and not through a shitcoin investment. When you have accumulated enough Bitcoin and you are willing and able to diversify your investments,
you can diversify your investment fund by investing in some reliable altcoins. Holy shit.
You are correct that there is no need to diversify in the beginning of your bitcoin investment (beyond bitcoin and cash), but you surely don't seem to understand diversification if you believe that fucking around with shitcoins is a way to spread out your risk.
Do you really believe that there is such thing as a "reliable shitcoin"? Come on.
I am not going to proclaim to know exactly when diversification might start to make sense for anyone else... and surely if we get to a point that we have our emergency funds built up to a decently high level and maybe even our bitcoin is getting close to a year or more of our expenses, we might start to consider that developing some diversification might make sense... which the traditional categories of diversification would be stocks, bonds, property, commodities, cash/cash equivalents and perhaps some business matters.. which also might be similar to diversifying into property and/or stocks.. even though business matters likely involve one's own labor rather than passive investments.
There is a very popular phrase in the crypto space, “Don’t put all your eggs in one basket.”
You sound like a retarded shitcoiner now...
Shitcoiner try to get you to think like that.
And, yeah, when bitcoin starts to grow to high amounts, then if you only have your money in bitcoin and cash, then you might not be diversified enough.. and you would be putting money into other areas in order to attempt to protect your wealth.. rather than the shitcoiner ideas of throwing value at a bunch of shit and hoping some thing works out.
This phrase has two meanings, one is that you should not keep all your Bitcoin investments in the same wallet.
Sure.. This part makes sense.
Another meaning is that you should not invest your invested money in the same asset. If you want, you can test your luck by investing a small amount of money in some reliable altcoins outside of Bitcoin.
Did you ever notice that all shitcoins are dependent upon bitcoin in order to have any value? So how would you be achieving any diversification from adding shitcoins to your holdings?
Generally the idea of diversification comes from investing into areas of the market that are not correlated.. so if shitcoins depend on bitcoin then how are they not correlated with bitcoin? Of course, we might have shitcoins changing in their nature since they beginning to get propped up more and more by governments and/or various status quo institutions.
So perhaps the investment case that some folks are believing in relates to governments and financial institutions pumping their shitcoin inversely to bitcoin... perhaps? that might work out for shitcoiners?
In this case, I think that 85%-90% of your investment fund should be filled with Bitcoin and the remaining 10%-15% you can keep in different altcoins.
Again more retardedness.
I frequently suggest that guys do not fuck around with shitcoins at all, but if they cannot resist gambling, then to put no more than 10% of their value into shitcoins, and that is in the trading context not in any kind of context in which shitcoins are considered as long term value, but instead pump and dump plays..
I suppose the more and more that governments and financial institutions get into shitcoins, then we are going to be more and more bombarded by folks considering that there is some legitimacy in regards to investing in shitcoins and/or to consider that shitcoins are no longer correlated with bitcoin's performance. Sounds like bad ideas to me Shadiq, but hey you can do whatever you like, even seemingly dumb shit.
. Diversification with Bitcoin can be investment, trading in Spot market, trading in Margin and Futures markets with the safest one is investment, next one is Spot market trading while the last two are very dangerous and should be avoided by not only newbies.
I baffles me that you sees other things you made mentioned here as diversification.
I expected you to know better, you can't call trading the spot market, margin trading and futures trading diversification. If you are talking about diversification away from Bitcoin, you should be looking at land, real estate, and gold, not trading of any kind that is not an investment, besides they are all full of high risk, which can makes you lose all you money.
It is a misconception to categorize any areas of trading Bitcoin as diversification, they are not in anyway related to investment, trading are get rich quick schemes more like gambling your funds. Trading Bitcoin is no different than investing in shitcoins, they are similar because there is high chance of losing your funds. Bitcoin is volatile which can dip on the short term when you want to sell, also holding shitcoins on the long term is risky because it'll be most likely dead before you think about selling it. If you want to make money in cryptocurrency without any hassles you shouldn't think of diversification just buy and hodl Bitcoin on the long term.
You are correct that getting involved in shitcoins and/or trading should be thought of as temporary plays rather than as long term investment, even though surely some traders mix and match their ideas of trading and investing and they might even build up their trading accounts (capital) as if it were a long term investment that they are continuing to build up through the years, but yeah, overall the idea of trading is in and out rather than long term building of value.
