Even if someone tells me today that bitcoin will get to $2m before the end of next year, I will believe it.
Even though we don't doubt that bitcoin will increase in due time, we should also be more realistic to know that bitcoin can not just grow to $2m dollar In the space of 1 year. That would be a massive push of %millions. even as though it was just a speculation but it may not possible anytime soon.
Over exaggeration has been a reason why investors are getting in balance (less or no profits) while investing, they invest too much of what they have in anticipation of making massive profits due to some rumored or questionable speculations that is likely not to happen and this tends to put them at risk.
Any investor who is over investing more than his means is not a wise investor, because everyone who invests in bitcoin, be it for the short term or long term understand that before investing in bitcoin, there are certain things that's to be observed and one of it is, not investing more than certain percentage of your disposable income. So if there are any investors out there that's over investing more than he is supposed to invest,because of speculations made by people as him is not a wise investor, but an opportunist who is greedy and deserves whatever he gets at the end of the day. Even if such person gets into trouble I don't care.
Because an investor should be wise enough to understand that speculations are just there to make people see the level at which other market players thinks bitcoin could be at that time frame. Those the people speculating never gave any guarantee that it would happen. So why would you go and over invest because of that, and blame it on others. If you are part of these sets of investors doing that, you have to refrain from such practice.
Perfectly said, this over investing is same or almost same thing as aggressive investment and just like you said, it has been advised not to invest aggressively because a situation where an investor has used up his or her reserve and emergency funds because of the quest to have more figure of Bitcoin in their holding can result to taking profit premature if at all there will be profit and any investor who does this automatically means he or she lacks management skill.
We might be arguing semantics, yet I doubt that over investing and aggressive investing are the same thing, and even you seem to recognize that there are limits that might be crossed to cause aggressiveness to become too much, such as depleting emergency funds.
I am going to presume that no one is going to want to get aggressive until he has established his emergency fund, yet also whether you have an emergency fund or not is NOT the only criteria for considering whether someone might be being just aggressive or overly aggressive.
For example if someone has an emergency fund of 3 months established, and he has an income of $2k per month and expenses of $1.5k, then he has right around $500 worth of discretionary income. He could be aggressive by using 80% to 100% of his discretionary income for buying bitcoin, or maybe he will be whimpy and only invest 10% of his discretionary income into bitcoin. These are not absolutes but are on a spectrum, and if he invests more than his discretionary income he might not be overdoing it as long as he has reserves and he is not dipping into his emergency fund, but still there are degrees of aggressiveness that might go overboard, and sometimes the guy won't even realize that he had gone overboard until he gets himself into a situation that might cause him to have to sell some of his bitcoin or to suffer a lot because he does not have enough reserve funds and/or emergency fund when he needs money that he had already used to invest into bitcoin.
Management skill is the ability of an investor not be drive or moved by the market Dip and mismanagement of investment in this context is a function of greed ( wanting to hold more than you are not suppose to...), though it's not bad to take advantage when there's Dip but it should be within your control and capacity.
At least you seem to know the idea, and so in the end, each person has to figure out how to engage in a kind of balancing of his finances and his psychology, and if he has better cashflow management skills, then he is going to have better psychology because of his putting himself in a better position, even if he might NOT be able to buy as many bitcoin as he would like to buy, he has to work within his own finances and psychology and hopefully not make mistakes that are irrecoverable. We are all going to make mistakes, yet we also should want to ensure that 10-20 years or whatever might be our bitcoin investment timeline that we are still in the game and we do not end up without any bitcoin when we have had these opportunities right now to make sure that we accumulate as many as we are able to do without fucking it up by overdoing it or by under doing it.
I still have troubles suggesting to a business man to stop leveraging his skills and/or talents in building a business and invest into bitcoin. Perhaps that the best we can attempt to do is to try to get those folks to hedge their bets a bit and to put some of their cashflow into bitcoin.
neither do I advise any body not to leverage on his skill and talent. I resonate with the school of thought that encourages people to work an get paid either by self employed or by salary work and invest on bitcoin. we all are saying thesame thing just that I wanted to trow more light in regards to the important of bitcoin and how small investment can increase a man coast in due time. we all know that bitcoin doesn't perform magic if not invested on. for that reason we can not neglect the fact that bitcoin can't work on its own but depend on a force to act. just like a car that can't run without a petrol. the money generated from the difference kind of business will be used to fuel bitcoin just like a car, and the amount of petrol on it determines the distance the car can go.
Some businesses and skills are in better positions than others, and it is not always going to be clear the extent to which a person might have to invest into a business or invest into skills and talents that may well help him to generate way more money so he is in a better position to invest into bitcoin, so the answer is not always going to be clear about whether to put into bitcoin, how much to put into bitcoin or whether there might be greater value in terms of increasing abilities to generate more cash that can be invested later.
For example, if someone is barely graduating from high school (like 18 years old) and his parents cannot support him any longer, he may well be better off to invest whatever money that he has into learning some life-long job skills rather than investing into bitcoin, and sure thee could be ways to attempt to do both, but at the same time, sometimes the cash crunch is so tight that there might not be enough of a budget to be able to do both. The balances are not always easy to figure out... but frequently in life choices have to be made and sometimes there is not abilities to do both at that particular time in life.
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I also wonder why some people always say to invest with money that you are ready to lose. In fact, if you look at the price of Bitcoin, it continues to rise and even returns a greater ROI than gold. People should see the facts about Bitcoin since it was launched until today that Bitcoin is very good to invest in so that they will no longer say to invest with money that you are ready to lose.
I think beginners should read this article where it is explained that Bitcoin has become an asset class that is worth holding because of its fairly good performance every year. In fact, Bitcoin has performed better in 8 of the last 11 years.
Source :
https://www.vaneck.com/us/en/blogs/digital-assets/the-investment-case-for-bitcoin/Yes, we all know that bitcoin is amongst the best, if not the best, investment currently available to almost anyone, yet each of us still has to both invest within our means and also realize that bitcoin is not guaranteed to go up.
you can believe all that you want that bitcoin is guaranteed to go up, and hopefully you do not mislead others or even mislead yourself into believing that bitcoin is guaranteed to go up.
Anther thing is that if you invest in the long term, such as 4-10 years or longer, it may well be the case that you are not going to want to touch your bitcoin investment during that time, so you are using money that you are not going to need for 4-10 years or longer, and Justbillywitt had mentioned that aspect of using money that you are not going to need, perhaps ever, especially if bitcoin ends up going to zero or goes negative, then hopefully bitcoin is not your only asset, and yeah we likely realize that bitcoin's investment thesis is very strong, but acting like it is guaranteed to go up seems a wee bit problematic.
