I believe that part of the problem that comes when someone builds a decent amount of bitcoin, and then if the BTC price appreciates in value, then the person may well feel that his ongoing contribution is hardly making any difference, and surely there may be quite a bit of truth to that, which can cause some disincentives to continue to buy and to just let the investment into bitcoin ride out and maybe invest into other things, so at that point they are starting to reach a potentially reasonable conclusion that they have accumulated enough bitcoin - while still not being at fuck you status or even having any ways in which they might feel safe from having so much invested in one basket.
Another exciting round of enlightenment from you. I think the scenerio where an investor starts getting the feeling that his/her ongoing contribution is hardly making any difference is common not just in BTC investments, but other areas of life. To be sincere, that's literally my major fear, as I don't want to get to a stage where I would start losing interest in continuing accumulation due to my thoughts on the difference that my investment has made so far.
accumulated enough bitcoin - while still not being at fuck you status or even having any ways in which they might feel safe from having so much invested in one basket.
I don't know how you escape those sensations, especially once you get towards having had invested 1 or 2 cycles and maybe even you had made some extra purchases along the way and especially if the BTC price ends up going up after you had gotten a pretty decent stake into it (of course BTC prices going up is not guaranteed).. but even if you got into bitcoin in late 2017 or even into 2018.. you might start to feel like you have enough or too much.. even if you still have not reached fuck you status.
Let's say that in 2017 your income was around $30k per year, and maybe in the last 7 years your income has gone up to $40k per year, and maybe your expenses had gone from $20k to $25k per year, so that would mean that your monthly disposable income would have been between about $800 and $1,250 per month, so maybe you could have had bought somewhere between $100 to 300 per week of bitcoin and you also might have had some opportunties to have had been able to buy some dips too. So even if we describe a fairly middle of the road case of your having had invested around
$200 per week in DCA since November 1, 2017, you would have had invested around $73.2k and you would have had accumulated around 6.4 BTC (currently valued at around $370k with the BTC spot price and around 2.4 k if we use the 200-WMA). Let's also say that through the whole time, you had your emergency fund and back up funds in place, and you had been successful in managing all of that in the past 6.75 years or so.
You might consider those to not quite be fuck you status levels, but still start to feel that you have a lot of money invested into BTC as compared to your salary.. even getting to around 9x of your current salary based on the spot price and around 6x if we use the 200-WMA, and if you might have had did a few extra lump sum buys along the way (maybe you got some bonuses, or you came across some other money in the past nearly 6.75 years or so). Sometimes folks have difficulties dealing with their wealth going up so much in a fairly short period of time and also largely (or mostly) having that money in bitcoin... and you don't even need to use my exact numbers in order to be able to recognize and appreciate these kinds of possibilities.
Another part of the problem, might come in which the person is valuating the BTC that he holds based on spot price which surely fluctuates a lot and then he might decide to cash out some bitcoin for consumption purposes rather than diversification of investment purposes, so in that regard, it could still be o.k. to take some profits, as long as he does not end up overdoing it and as long as he mostly attempts to be reasonable and prudent about it, and maybe even replacing some of his investment later down the road, so there can be dangers and delays in getting to fuck you status and even temptations that cause the BTC accumulator to stop accumulating and maybe even ending up interfering (or sabotaging) his own abilities to even be able to reach fuck you status.
Cashing out of ones investment with the aim of making replacement back is solely determine by self control. Personally, I understand myself well in the aspect of investment, that is why I don't bother touching, because I know I don't always have that will to replace. I hope to learn that someday, but for the now, I prefer to just make my investment separately, and also have enough funds for personal use, as I prefer to stick with a particular investment term(time) - my 5 or 6years should be what I agreed at first.
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So, I think investors should be able to tell themselves the truth, on how and if they are are able to make replacement on there investment if they decide to cash out. For sure, I think JJG has no problem in making replacement assuming he's the one cashing out for a moment.
I am not exactly saying what I would do or what I did do in my past more than 10.5 years investing into bitcoin, but there are inclinations to want to cash out some or all of it when you acquire a lot of wealth and the value of such wealth is fluctuating and even inevitably going to continue to fluctuate, even if you have not quite reached your goals, whether if you want to get to fuck you status of $800k, $1 million, $2million or some other number and if you value your wealth at spot price or the more conservative measure of the 200-WMA.
The advice you say sounds quite reasonable because every new person who wants to become a Bitcoin investor must be based on knowledge so that at least they can know how to store Bitcoin in their own personal wallet very well. Because everyone will definitely be blind and can even fall in the wrong direction if they are not guided by the basic knowledge that must be in their own heads. And from this I think it would not be wrong for anyone to follow people who have been successful through Bitcoin and also people who have had enough experience through Bitcoin investment because this is also part of making ourselves successful in a particular field.
I would be careful in presuming that anyone starting in bitcoin needs to actually hold his own bitcoin in the beginning. Sure holding bitcoin is important and learning that holding bitcoin is what distinguishes it from other assets, but at the same time, I think that I a person (a beginner) can work up to holding his own keys and he might spend his first one or two years in bitcoin just building up price exposure and maybe learning about how to hold his own keys, and so people can be in different places in terms of how much they are able to learn at one time and how long it might take them to get to a point of being able to hold their own keys.. so I don't see anything wrong with beginners starting out with mere price exposure and realizing that they are not really owning bitcoin even though they are starting out by investing in price exposure and perhaps otherwise getting their finances and psychology in order so that they can continue to learn about bitcoin while investing into it (in a price exposure way)..
Yes, the more empowering aspect of bitcoin comes from having it (at least a decent amount of your BTC holdings) in your own possession, yet there are a lot of folks who have BTC in their possession, but also keeps some on exchanges and through third-parties too.. and so it is up to each person regarding the proportions of such and to realize the power of holding decent amount of BTC yourself... because none of us really can know when third parties, governments or even hackers might end up gaining access to coins that we are not holding in our own possession.. and yeah, hackers are getting more sophisticated too.. so anyone holding their own coins have to be careful not to get socially engineered or otherwise tricked or forced out of their coins.. which is also an ever changing topic and even very smart folks, long time bitcoiners might not realize some of their own self-custody vulnerabilities, even though it remains preferable to have a decent amount of self-custody when it comes to BTC.. but not necessarily telling everyone that you know.
In as much as learning how to hold Bitcoin is important, I don't think that is all a beginner needs to know before going into Bitcoin investment.
A week at most, is enough to enlighten the noobs on everything he/she needs to know.
A week to get started by figuring out disposable income, but I would think that it might take a whole cycle to really get used to some of the investing matters and cashflow management matters, even though getting started within a week of deciding to does not seem unreasonable to me, and how much to get started with is a question of how much rather than whether to do it... so many folks could start out with small amounts if they are uncertain about details.. and then just work their way up as they might become more comfortable with the passage of time, and that could take several months or even years of study to really get to aggressive levels including if there might be issues in terms of fixing potentially bad (or sloppy) historical cash management practices.
The real deal starts when trying to build up, just as you've pointed out. It's just like learning how to drive a car. Learning how to turn the engine ON is just a basic which shouldn't take a week, except the learner is the special type( you know what I mean ). The main task starts when you start learning when and when not to use the gear, steering, and all the types of car lights, etc.
Yep.. there are different levels of learners, and some folks might have had similar experiences that help them to learn faster, and in regards to cashflow management, some folks might have good historical practices and others have bad historical practices. and they might have to fix some of their practices or learn some new or improve some of their techniques in order to account for bitcoin's likely ongoing and inevitable volatility which means that they should not be planning to tap into bitcoin for any of their cashflow needs and so they have to figure out ways that the remaining of their cashflow and/or back up funds are in decent and sound order..
I would be careful in presuming that anyone starting in bitcoin needs to actually hold his own bitcoin in the beginning. Sure holding bitcoin is important and learning that holding bitcoin is what distinguishes it from other assets, but at the same time, I think that I a person (a beginner) can work up to holding his own keys and he might spend his first one or two years in bitcoin just building up price exposure and maybe learning about how to hold his own keys, and so people can be in different places in terms of how much they are able to learn at one time and how long it might take them to get to a point of being able to hold their own keys.. so I don't see anything wrong with beginners starting out with mere price exposure and realizing that they are not really owning bitcoin even though they are starting out by investing in price exposure and perhaps otherwise getting their finances and psychology in order so that they can continue to learn about bitcoin while investing into it (in a price exposure way)..
Yes, the more empowering aspect of bitcoin comes from having it (at least a decent amount of your BTC holdings) in your own possession, yet there are a lot of folks who have BTC in their possession, but also keeps some on exchanges and through third-parties too.. and so it is up to each person regarding the proportions of such and to realize the power of holding decent amount of BTC yourself... because none of us really can know when third parties, governments or even hackers might end up gaining access to coins that we are not holding in our own possession.. and yeah, hackers are getting more sophisticated too.. so anyone holding their own coins have to be careful not to get socially engineered or otherwise tricked or forced out of their coins.. which is also an ever changing topic and even very smart folks, long time bitcoiners might not realize some of their own self-custody vulnerabilities, even though it remains preferable to have a decent amount of self-custody when it comes to BTC.. but not necessarily telling everyone that you know.
Your points are clear to me. It is true that in reality beginners can benefit from price exposure to Bitcoin before they think of going into self-custody. However,
knowing the investment with strong confidence is a crucial step if they want to be successful.
I doubt that your statement is true. There can be ways of engaging in sound cash management practices and blindly DCAing into BTC, and still end up being successful. So there may well not be any requirements to knowing BTC well in order to "be successful" in terms of making a lot of money or even being able to hold onto it for the long term too.
Meanwhile, there are things to consider that could create balance. Individual risk tolerance and patience are some things to consider along the line but first they should be aware that exchanges can be hacked or restricted which so many person have fallen victim to such things. This should be the first thing when they get to the level of choosing an exchange to buy from and a wallet to store.
They can learn these things along the way, and tweak their practices. Sure, I get the point that some knowledge is helpful, but probably the most important knowledge is attempting to individually tailor to their own circumstances, and yeah hopefully they can learn along the way or run various risks of losing all of their coins.. but if we are mostly referring to getting started, then I see no reason to figure out these kinds of matters in advance.. yeah sure, there has to be some initial sourcing of coins whether on an exchange or going through some person that is known or someone who is referenced, yet there could be a variety of ways to get started and sometimes geographical limitations or perhaps some needs to learn other ways to source coins, even if the getting started might have ended up being a bit rushed.. depending on individual circumstances...
Let's say that a person finds out about bitcoin from a relative (a cousin or something that s/he trusts), and figures s/he needs to get started right away, and so maybe the first 1-2 months, he works out an agreement that the cousin buys the coins and holds the coins.. and then during that time, the person figures how to set up his/her own bitcoin accounts. Those might not be unreasonable ways of getting started to get price exposure to bitcoin, yet the ways of getting started are somewhat individually tailored based on circumstances then in front of the beginner who is trying to figure out how to get started.
The solution to self-custody vulnerability is technical knowledge (strong password and hardware, seed phrase safeguarding, awareness of social engineering, and manipulation to mention a few). If am wrong please correct me. In as much as self-custody is the best it comes with responsibility which we would all account for ourselves, we should always think about it if it is the right approach at the beginning stage.
"Always" is pretty strong language.... but hey whatever. You do you. We can hold something up as the preference or the gold standard, but it might not be very practical for some people to start out with self-custody.. maybe even think of a 70 year old who might not be very technologically savy, yet who might want to get some bitcoin price exposure.
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