Topic: Buy the DIP, and HODL! - page 160. (Read 142606 times)

I would like to point out that during last few years there was big change in population that owns BTC. Few years ago the most owners of BTC wallets were individuals, but now with ETF funds more and more BTC becomes ownership of the banks, trusts and other organisations.

https://river.com/learn/who-owns-the-most-bitcoin/

The example wasn't meant to be a suggestion or anything. Of course everyone can do as they please. But I think there is this misconception that everyone thrives for a target and then blows up all savings on a luxury life. I have seen quite a few people where I wondered why they live that modest lifestyle despite being very wealthy. And I had the pleasure to talk to some of them and it was always the same: when they are young, they think once they have the first million, it must be the Ferrari immediately. Of course some do buy a Ferrari then, but many do not.

As you mentioned before, targets are something people set to have a goal they are thriving for, but that doesn't mean once that target is reached they will instantly change their course of action. In relation to bitcoin it could be price or quantity.  And part of my example was a whale called Draper and there are many more, I checked the number of the biggest wallets and whether the number of wallets > 1 BTC,>10 BTC, >100 BTC, >1,000 BTC ever changed. There was a guy here somewhere claiming that I think smart money is selling at the moment. Seems to not be the case as the number of all whale wallets did at least remain relatively stable for many years. You could argue that from end of 2023 >10,000 BTC wallets dropped from 120 to around 100. But from 2021 to 2023 it first increased from 80 to 120. And ever since 2014 the number of whale wallets >10,000 remains at today's level. It is around 100 wallets. Even if someone empties their bag, someone else seems to be buying it. Obviously there are fluctuations and people took profits over the course of so many years, but there have still been whales gobbling up tons of BTC.

I think those are important indicators for the small guys around here. They may not do that research, read from someone that smart money is leaving the market and then they slowly get into a panic mode and decide to sell immediately at or below their target as if it was a smart decision and a relief. But when you look at the hard facts, bitcoin is doing amazing. Rhetorics about it are changing in all parts of society. Politics, banks, many institutions, former critics and so on. This may not immediately be reflected by price, but I believe it will. Bitcoin has a very strong pull effect as it is brutally resilient.

This is merely my personal opinion, but that DIP was NOT the actual DIP. Follow and study the price and its relationship with the 200-Weekly Simple Moving Average. If you haven't made a lump sum purchase with your savings yet, then it's probably better to DCA 10% of your salary and continue saving the rest while waiting for a crash near the level of the 200-Weekly SMA.

Or if you believe that 10% is too small to DCA, make it 20% monthly divided into weekly purchases - 5% of your monthly salary each week. Although that might be too high for those people who have families to support.

Sometimes I might even make misleading statements.  Of course the different kinds of funds should have priorities, so it is true if you have spent all of your reserve funds, then the ONLY thing that you are going to have left is your emergency fund, and that might already be a sign that you are fucking up if you are going to be dipping into your emergency funds for non emergencies, yet if someone is brand new to investing into bitcoin, he might have had never been in the practice of creating and maintaining any kind of emergency funds or even back up funds greater than just a few weeks of money to cover expenses, yet when someone starts to invest into an asset as volatile as bitcoin, there may be a preference to at least build up an emergency fund that is around equal the size of the bitcoin investment size, at least during the process of the first 3-12 months while the emergency fund is being built up it may well be preferable to simultaneously invest into bitcoin.  It could take some folks a year or even more just to have built up 3 months of emergency fund and an investment into bitcoin that equals the size of the emergency fund, so during any kind of building process if there is any dipping into emergency funds, there is also risks, but there also could be knowledge of what it your ability to replace the amount that you had taken from the emergency fund, so you have a lot of flexibility in terms of borrowing from various funds, and some funds have more priority than others.

Let's say for example, you had spent more than 2 years investing into bitcoin, and you had established an emergency fund that is around 3 months of your expenses, and your bitcoin investment is around 4-5 months of expenses, and you have also begun to save cash in various reserve funds, such as 1) fund to update to a newer model car, 2) fund to take your wife to a nice restaurant / and or go on a short vacation (perhaps just going overnight to a beach location), 3) bicycle for your kid, 4) fund to update your cell phone or computer, 5) fund to replace your refrigerator or your microwave, 6)  funds for buying the BTC price dip and 7) other miscellaneous categories of things that you have on your list of wants.   

You would likely have various priorities within each of the categories of funds, and each category is important in its own right, though some of the items are likely to have a higher priorities than others, yet if you were to have an emergency, you would likely draw from these various categories of reserve funds prior to drawing from the emergency funds, and if bitcoin were to dip in price you already have a category of funds, but you might be willing to take from another category of your reserve funds, but you likely would not want to dip into your emergency fund, so if you have already been creating these categories of funds, you may or may not change your mind regarding how you categorize those extra funds if the BTC price were to drop to a certain enticing level.. and you have the choice about how much you feel that you are able to deviate in terms of your priorities, and maybe all of your reserve funds all together add up to about 1.5 months of your expenses.. but still you have 3 months of emergency funds, 1.5 months of reserve funds, you have around 4 months invested in bitcoin and perhaps you have 1 or 2 weeks of money in your float that might or might not come available based on how much cushion and/or flexibility you might have in your float. 

There is no obvious way forward, and if you might be having some dilemmas regarding the various priorities of the funds, you might have to rethink matters, and if you did end up using some of the reserve money to buy BTC then you should feel some priority to replace that money, even though it might take time to replace the amount that you had used.. and in the meantime, perhaps you have an amount that you had been DCAing into BTC the whole time, so then you might start to wonder whether it is worth all of the stress to be taking from other categories of funds to buy the dip when you already had part of your reserve fund dedicated to buying the dip, so the mere fact that you already used your buy the dip portion, and the BTC price kept dipping, that might not be enough of a reason to tap into other parts of your reserve funds and otherwise create stress upon yourself to have to replace those funds.. yet in the end, you are the sole person who has to decide whether you want to use other funds and if you also want to exhaust your various reserve funds so much that you might end up having to tap into your emergency fund for some reason that would not have had even been an emergency, except for the fact that you had used all of your other reserve funds and you did not have any reserve funds left, so all you have left is your emergency funds, which seems like a place that you should not easily get to.

Yeah actually sometimes we end up complicating ourselves by trying to prove a point, I admit that my framing of work does not explain more better, like I said sometimes we complicate ourselves. But I guess carefulness need to be adhered in other not to go contrary or becoming a kind of misleading person hahaha.

That's hilarious. Actually my intention was not to be extravagant in spending to the extent of using all my reserved fund and hoping to use my emergency fund as backup fund, but I was talking in anticipation of a statement you made sometimes ago concerning using some part of our emergency fund if a person is out of reserved, but I have searched for pages but can't figure out the exact place you made such reference. But anyway thanks for the correction we need to be careful as adults to manage our finances very well so that we can be in position to bail others not others bailing us out.  all other explanation has been Noted.

Your description of the various kinds of back up funds is a wee bit confusing Samlucky O.

Of course you can call them whatever you like, but if you end up fucking up because you are not really using your back up funds properly, and then an emergency comes, you are going to be the one that has to live with the consequences, and yeah some people have others who can bail them out, yet part of being a responsible adult should that we should strive to not have to depend on others to bail us out - and also maybe the more mature that we get, we would not want to put anyone in a position where they have to bail us out, even though from time to time, if we are financially responsible and perhaps more wealthy, we might be bailing others out, perhaps from some form of our reserve funds.

Generally speaking all of the back up funds and any investments that any of us make should be coming out of and being built from our disposable income, so part of the point of any investment is that we would be anticipating our investment portfolio to be growing with time and we are not having to tap into them for any reason outside of some of our own choices regarding how and when to tap into them.

Sometimes people spend many years building an investing and struggling to get it to a certain size, yet they end up engaging in poor cashflow management, and they end up facing some situation(s) in which they are forced to spend from their investment, and if they had engaged in stronger cashflow management, they would have had options which would include to spend from their various backup funds prior to having to tap into their investments, especially their bitcoin investment.

So surely various kinds of back up funds should be considered as having priorities, and the reason that we label emergency fund in that kind of a way, means that we would be in some pretty bad situation that might involve loss of income and/or increases in expenses, so from my thinking if we are engaging in strong cashflow management, we might never have to ever dip into our emergency fund for 20-30 years or even more, because part of the reason that people have emergencies in the first place is because they don't have sufficient back up funds. 

So if emergency funds are something that we never want to touch (or we hope we never get into such a situation that we need to touch them), then we might well have various other funds that we would use prior to even considering touching our emergency funds, and if we are tapping into our emergency funds, we most likely would have had exhausted our other means first... I really doubt that it is a good idea to consider bitcoin price movements as an emergency.. so buying more bitcoin based on some kind of a super opportunistic price dip opportunity would come from the reserves and never end up touching emergency funds.. and  another thing is that for most people, it probably would be good to have at least 3 months of emergency funds, yet if you are a person who has complicated cashflow situations, many family obligations, and perhaps other complications like a business, then you might need to keep more than 3 months of emergency funds.. but surely you would likely already be in the practice of keeping reserves too, so between emergency funds and reserve funds, you might have more than 6 months of expenses that you are able to draw from based on the complicated finances that you have.. and guys have to figure out these kinds of matters for themselves since if they end up fucking up in terms of  a lack of quantity of back up funds (no matter what they call them), then they will be stuck with such consequences. 

Surely guys might have extra sources of income (or different kinds of job that they can do) or they might have property that they could rent out and they might even have some family who are in good positions to help them out, so the size of their backup funds might vary based on some of the other kinds of emergency measures that they should be able to take, yet they still could end up in a situation in which even some of their back up cashflows are not able to generate income for them, so the amount of back up funds they keep for those kinds of possible events remains in their complete discretion, even if they might screw things up at inadvertently become overly aggressive in their BTC investment, without realizing that they had crossed from reasonably aggressive and into a overly aggressive status that might end up blowing up on them and seeming to be more like gambling rather than investing.

Note that reserved fund is a permanent amount set aside to be used for future porpos, it is more likely be called disposable income which is set aside after all priorities has been settled, which may likely be bitcoin investment and family expenses.  So in clear terms emergency fund is a seperate fund set aside for emergency which is from the disposal/reserved fund which is used to settle emergency such as unforseen circumstances/contingency. The emergency fund can as well be used as a reserve fund  when there is short of fund in the reserved.

Setting aside emergency fund is not compulsory that it will last for a longer time frame without touching them. There are also times when surely we undergo some financial constrain, instead of dip diving into bitcoin investment. We use some part of the emergency fund as a reserve to keep the bitcoin investment going till we have some money to refill our reserved.

Perhaps emergency funds are more like the back bones of every investment as they serve as protection to our investments, emergency funds, reserve funds etc are literally protecting us from using or tempering with out investments when the unforeseen circumstances occurs, in as much as we can't see the future we really need to prepare for it as times may change and we may not be able to stand the pressure which we will find ourselves in hence deeping hands into our investments would be the only option left and that's where the reserved and emergency funds comes in.

We all have personal decision and opinion in terms of our investment, the one fact about emergency funds is our funds should not stay empty or it’s either you replace back the funds. Whenever an investor face challenges investing the reserve funds can serve as an alternative but, our emergency funds should be accessible not because it’s available for use. Anyone can actually hold their emergency funds for years not minding the time because at any slight mistake it will take time to build another better emergency funds meanwhile without a stable emergency funds an investment can’t stand firm.

Wow.  You don't need to use any such extreme examples of someone who might well be set for life with bitcoin and potentially leading a relatively modest life, and even someone who is sitting on 100 BTC and with hardly any other assets may well have put himself into a position of being somewhere close to a whale in terms of potentially being able to live off the bitcoin with anywhere between $5k and $10k per month worth of spending (withdrawing that much from the bitcoin holdings every month - or the equivalent monthly amounts on a quarterly or yearly basis), and also it would quite likely be the case that the bitcoin value in terms of dollars would be growing in value faster than his withdrawal of the BTC and also faster than the rate of the debasement of the dollar, so even if he is living off of his bitcoin at such rate of between $5k to $10k per month, he could reassess where he is at every few years to decide whether he might be at liberty to increase his income and still have a BTC stash that is sufficiently sustaining its value.  So sure, there could be lifestyle considerations and also considerations if he is ONLY supporting himself or if he is also submitting an family, and of course, where he is at in the world will likely affect his expenses, too.


I doubt that there is any better (or more valuable asset) than bitcoin, yet a person might choose to withdraw bitcoin to either consume or to even diversify his assets, including potentially getting some enjoyment out of something like a house, even if a house would not have very high likelihood of being a better investment than bitcoin, but still people do get value and senses of satisfaction and even comfort by various kinds of property ownership, whether considered as investmennt properties, or consumption properties or some combination of property characteristics..

Those who stucked physical currency in Banks or personal savings are just some kind of selfish and people who lacks vision of making profitable investments that can stand a long time and even being inherited by their offspring because I have heard of people who stucked huge amounts of money in a room and even in underground buildings and dies and when these money were found it has already rot in there. How can someone keep Money without investing it on meaningful assets that can be passed from one generation to another.

There is different between the whales and the ordinary investors because while the lower investors are still struggling to build their portfolio, the whales already has huge stash which even if they decide to sell it won't still affect their holdings. However it will be unwise if someone decides to sell part of their Bitcoin holdings just to acquire a liability in form of assets just because you want to feel luxury or you want to live a larvish lifestyle. If someone who have huge amount of Bitcoins decides to sell part of their holdings and invest in more valuable asset it is considerable instead of selling to acquire luxury things that are not bringing anything to you

You would be surprised about how many old people prefer to die with a lot of money in the bank and under their pillow instead of buying watches, cars or go on a cruise. Many of them own a house or two because they prefer to be independent. But the main reason is what once you reached a target you worked towards for many years because you always thought you want pure luxury all day long, there is something going on with many people that keeps them from sending their money without thorough consideration.

I believe that bitcoin is such an asset. Sure if you are a whale and you are sitting on a bag of 30,000 BTC like Tim Draper, selling some wouldn't hurt you, but often times even these people keep this asset. Draper bought at just over $600 and still holds 29,600 BTC. Why? Why wouldn't someone who bought for a little less $18 million not sell for $18 billion? It's a question someone should ask themselves before they consider getting rid of their holdings because they feel like buying a new car.

Of course, you can do both.

Yet, the mere fact that you can do both does not mean that you need to do both or that it would be preferable to do both. 

Each person has to decide regarding the extent to which one approach might be better than another in the context of his own circumstances.


There is nothing wrong with thinking about a formula for yourself, even though some newbies may end up better reversing those numbers or to have all or almost all dedicated to DCA buying and little to none dedicated to buying dips, especially as some members already mentioned that they are going to be buying dips and non-dips through DCA,and also that there is no real way to know whether more dip is coming or not, yet surely any person could have some kind of a regular buying of $100 per week and then after becoming concerned that there might be more dip, convert over to buying $70 each week and holding the remaining $30 to buy on dips and perhaps set some kind of dip parameters, and if the dip parameters are somewhat restrictive (or at least not getting triggered), then perhaps after 10 weeks, $300 might end up building up, so even the amount of money building up (for the purpose of buying the dip), could end up contributing to some needs to reconsider how to allocate the money... and yes, individual choices.. including that the person might also receive some kind of an unexpected bonus (let's say $1,000), so then might need to consider how to allocate that money in terms of buying the dip money, DCA allocating or perhaps buying right away with some or all of it, and so sometimes receiving some kind of unexpected amount of extra cash (or discretionary income) can provide a lot of relief due to providing additional options regarding how to treat such extra cash that came into the picture.


If you have money available to buy at that price, sure.. no problem, yet it can be problematic to hold very much value out of anticipation of such potential dip prices that might not end up playing out.

By the way, I surely don't know if I am very likely to be correct or not, yet for several months, maybe half a year or more, I have been suggesting that I would be willing to bet that the BTC spot price does not go any lower than 20% above the 200-WMA until the end of 2025, so that means that I have been anticipating that the odds are less than 50/50, and that is  why I am willing to make such bet - yet at the same time, having bets with something in the ballpark of 50/50 odds is not really expressing a whole hell of a lot of confidence, yet maybe at least enough confidence to enter in the bet with an expectation that the odds of winning are greater than the odds of losing... so yeah, in recent times, the 200-WMA has been moving up between around $30 to $45 per day, and currently in the lower end of that range, yet surely as the BTC price goes up then the amount that the 200-WMA moves up per day will likely also move up.. and right now, BTC spot price is right around 52% higher than the 200-WMA.  https://bitcoindata.science/withdrawal-strategy.


I don't have any problem with folks trying to figure out some kind of a target amount that they are going to invest and/or save, and I recall that even when I was young, I would try to target something like 10% or more of my gross income to invest and/or save.

Of course, as you mentioned, there is a bit of devil in the details, and we should attempt to use the correct language, which is that no one should be investing more than their discretionary income, which truly some people have higher levels of discretionary income than others, yet sometimes we can also increase our discretionary income by increasing our income and/or cutting our expenses.  So we an assess how much of our discretionary income is part of our gross income, yet we can also assess how aggressive we are going to be in terms of our use of our discretionary income for investing/savings rather than for consumption.  There is no one correct formula, yet those who are more aggressive in regards to the amount of their discretionary income they invest into bitcoin are likely going to progress more greatly in their bitcoin investment, yet they might end up sacrificing other areas of their personal life, so they likely need to find some kind of a reasonable balance... that also allows them to feel that they are making reasonable progress in their bitcoin accumulation journey.

It may be true that if you are in that situation you will make two decisions, the first is to get luxury goods/houses or everything that you have dreamed of for years, and the second decision is that you will think wisely about the bitcoin investment that has been built from a long time ago. Yes, my answer is maybe if we have achieved the desire to have a luxury home and at that time all your wealth that you have in BTC. If it happened to me, maybe I would only sell some BTC and the others I would keep for years to come.

The reality is someone who has fallen in love with Bitcoin of course will not leave BTC in the investment that he will make. So at this point we can rebuild our BTC portfolio by accumulating every week because we only sell some BTC just to satisfy ourselves with our dream of having a luxury home.

This often happens to the wider community where they change their lifestyle when they have reached the level of wealth that they have built from the investments they have made. I remember one word, fulfill your dream when you are able to achieve it. Yes, that is a common thing and we remain in our position to have BTC and also have a luxury home. Just sell some of it and buy it back through DCA, of course, slowly you will have the BTC back like before you sold it.

I think you couldn't be more accurate here. I would add though that it might a question of needs and opportunities. If you reached the accumulation target for BTC and the price is amazing (whatever that means) and in the neighborhood out of a sudden there is this once in a lifetime opportunity to buy that house that you ever dreamt of, then maybe it is also a question of satisfaction that can become decisive. Now if that means I am forced to sell off everything in BTC and then top of that take a mortgage to get it financed, I should probably think twice (unless I have some deadly disease and want to live in a dream place for a short time...).

It's true that people can have a target without actually intending to sell by then. Regarding the price, the truth is that we are still so early days that I think nobody can reasonably estimate where BTC will end up or peak for a long time. I will be honest and say it could be anything. If governments start racing for accumulation because they once and for all understood that bitcoin has geopolitical relevance, well, how much does there even remain for us normal human beings? And this is not an unrealistic scenario. It's probably already happening for sure apart from El Salvador.

I just remember people saying that BTC will never reach 1,000 USD, then they said it will never reach 10,000 USD, then they doubled that number, then institutions started to announce that bitcoin could change the world, then governments were involved in various ways like selling seized BTC, which actually legitimates it because governments can't prohibit something that they sell themselves.

So many details to consider here. I am curious to see where this is heading in the next 5 - 10 years. It doesn't mean we won't see crashes. For sure there will be crashes as with any asset that is subject to herd behavior, but bitcoin is very often fought back in the recent past when some experts announced that there will be a black swan event.

Because of how unpredictable emergency situations are, it's best to keep our emergency funds and never use it for your investment purpose. I know that the issue you're likely considering is that when you keep that emergency funds for a long period of time without using it, it might appear as though you're wasting it for nothing but that's not the case. It's better to have an emergency funds you're not spending but that's lying dormant and ready for the time you would want to utilize it than using your emergency fund to buy Bitcoin and when you are faced with an unplanned event, you're forced to sell your Bitcoin to sort out your emergency.

If you do the required planning and allocate a certain portion of your earning for your DCA and then another for your upkeep and then the third portion for your emergency funds, it's going to help you have a balanced investment routine. Maybe at this start you might not be all that strong financially to set all these in place but you just have to set a structure that you're going to follow when things falls well in place and start investing and implementing them In a little way.

Yes, almost everyone wants to get Bitcoin at a dip, but the question is: do we know when the dip will happen again? The answer is no, because nobody can accurately predict Bitcoin's price. So, why should anyone who really wants to invest in Bitcoin wait for a dip that they don’t know when it’s going to happen? Some people have been waiting for Bitcoin to dip again so they can accumulate more, but I think this approach is wrong. Someone could be waiting for something they have no assurance of. Instead of waiting for a dip that is uncertain, why not adopt the DCA (Dollar Cost Averaging) strategy? This approach allows you to buy Bitcoin at different prices as you invest regularly, whether weekly or monthly.This method has enabled many people to accumulate Bitcoin, and as they continue to do so, they also see the advantage of it. By buying at different prices, whether during a dip or at a higher price, their wallet value hardly decreases anyhow.

A new investor will invest in bitcoin based on his own discretionary income because that is the most important thing that will keep his DCA buying ongoing for a very long time so that he does not use more than the amount he is supposed to use to buy bitcoin, if not he will end up selling part of his bitcoin when he is faced with difficulties. Using part of your discretionary income is the best be it 5% and above, as long as you are DCAing consistently and persistently building an d growing your bitcoin stash overtime.

If his salary or income increases, he can also increase his DCA amount. However, if a brand new investor who does not understand much about bitcoin and wants to invest immediately, he can start with 5% of his salary for one - two years and when his confidence and trust increases, he can increase the amount to 10% or more since he c an afford it and that will not affect his monthly expenses, since he only wanted to start with a little amount in the beginning. The size of your emergency funds will also determine how aggressive you will be when increasing the amount that you will use for your regular DCA.

Any investor that cannot invest 10% of his weekly or monthly salary is not a serious investor. 10% is not that very big, neither can it be considered as being excessively aggressive. No matter how large your family is, if 90% of your salary can't sustain you till your next salary comes in, I don't think 100% will be enough for you. If you find yourself in this situation what you have to do is to cut down on your expenses, and not to cut down on the 10% that's is to be invested in bitcoin. If you check very well on those your expenses that you think that the 90% of your salary won't be able to solve, there are things which you can do without there. You just have to let them go so that the 10% budgeted for bitcoin investment will be sustainable.

Yesterday I made a big investment decision, I am thinking of setting up a separate fund for my investments to ensure continuity of my investment and to make the investment long term. 

Basically the main purpose of setting up this separate fund is to use that fund at critical times. People can face danger and need money any time, if I have a big financial need and if I have a big problem, that's why I decided to set up a separate fund so that my investment doesn't get irregular. Basically I will use this fund for a very limited period of time, when I find that I can't spend money on investments, I will spend money from that emergency fund and continue investing. When I have money again and things are back to normal, I will put the money I took from my emergency fund back into that separate fund. I don't know how you see it, but I think it might be acceptable and right for me.