Topic: (SSS) - A Sane and Simple bitcoin Savings plan - page 6. (Read 84914 times)
nice plan, ty risto
It is wise to remember that in all investments, historical performance is no guarantee of future performance.
it's not a guarantee, but it's still the best indicator to use.
I will start using your system when BTC hits 1000 USD:
I will sell 10% of my "HODL stash" between 1000 and 2000 USD (so 1% @1000, 1% @1100, 1% @1200, ...)
When we double to 2000 USD, I will sell 10% of the remaining stash between 2000 and 4000 USD (so 1% at 2000, 1% at 2200, 1% at 2400, ...)
I bought in between 50 and 200 USD, so I will start with a decent profit
(And as a poor student, I can use the money)
thx for sharing!
I will sell 10% of my "HODL stash" between 1000 and 2000 USD (so 1% @1000, 1% @1100, 1% @1200, ...)
When we double to 2000 USD, I will sell 10% of the remaining stash between 2000 and 4000 USD (so 1% at 2000, 1% at 2200, 1% at 2400, ...)
I bought in between 50 and 200 USD, so I will start with a decent profit
(And as a poor student, I can use the money)
thx for sharing!
Is there any point on your charts prior to this year when the price dropped down to less than 1/3 of the all-time-high (at that time)? Ie once it hit $100 did it then even drop below $33? Once it had reached $300 did it ever drop below $100?
You can compare % rise and fall directly from a log chart (that's one of the reasons they are so useful):
The largest drop ever was in 2011 when it fell from approximately 90% between peak and trough.
The second largest drop was in early 2013 when it fell approximately 80% between peak and trough.
The third largest drop was just recently when it fell approximately 70% between peak and trough (at least so far).
Is there any point on your charts prior to this year when the price dropped down to less than 1/3 of the all-time-high (at that time)? Ie once it hit $100 did it then even drop below $33? Once it had reached $300 did it ever drop below $100?
It is wise to remember that in all investments, historical performance is no guarantee of future performance.
It is pragmatic to set aside conventional wisdom, but not mathematics, when analyzing the adoption of an unprecedented disruptive financial technology.
Don't want to cross-post a third time so please see the link for the mechanism.
It is wise to remember that in all investments, historical performance is no guarantee of future performance.
It is pragmatic to set aside conventional wisdom, but not mathematics, when analyzing the adoption of an unprecedented disruptive financial technology.
For example, nothing we ever experienced would help us understand the future value of a deflating currency. The price series suggests that given a fixed limit of 21 million bitcoins, the value will continue to trend higher as it has done in the past. Mathematics and statistical evidence of adoption rates may allow us to recognize the halfway point of adoption as it happens, at which point the exponential rate of price increase will rapidly diminish.
Those who wait for bitcoin price increases to be guaranteed will be very late adopters.
It is wise to remember that in all investments, historical performance is no guarantee of future performance.
Here is a log chart of bitcoin's historical market capitalization, along with what I refer to as its (adoption-based) "Metcalfe Value." This chart empirically shows two things:
(a) bitcoin's market cap has grown roughly proportional to the square of these two chosen measures of "adoption."
(b) "adoption" (based on these two measures) has grown roughly exponentially for five years.
Will bitcoin adoption continue to grow?
(a) bitcoin's market cap has grown roughly proportional to the square of these two chosen measures of "adoption."
(b) "adoption" (based on these two measures) has grown roughly exponentially for five years.
Will bitcoin adoption continue to grow?
This is the post, the chart, and the question that everyone who has heard about Bitcoin should be confronted with.
Btw. do you have a theory about which one is leading the other? It seems to my old eye that in >50% of the cases price has been leading the transaction growth, but judging from a laptopscreen is not the way to do research...
I have been watching the adjusted transaction quantities reported by Blockchain.info for a reversal. I believe price is leading transaction quantity, to the extent that price and transaction quantity are weakly independent. There is a hint now of a reversal to confirm what we have seen in price action for a few days.
https://blockchain.info/charts/n-transactions-excluding-popular?showDataPoints=true×pan=30days&daysAverageString=1&scale=1&address=
Chart display options include a 7 day average, and also a longer duration of data.
Btw. do you have a theory about which one is leading the other? It seems to my old eye that in >50% of the cases price has been leading the transaction growth, but judging from a laptopscreen is not the way to do research...
Hopefully soon I will get around to running a cross-correlation analysis to better understand the lead/lag behaviour. But you are correct that price leads (these measures of) adoption at least at the market-cap transition points (e.g., price begins to fall during a crash while the Metcalfe value is still increasing).
My feel is that during the growth spurts, price leads adoption. And then during quiet periods, committed bitcoin users find new uses for bitcoin (thereby growing the BTC economy and slowly increasing adoption). Eventually enough price pressure builds and a new growth spurt begins.
The problem I see here is that, while a great savings/investment plan, it seems to be assuming that BTC will just keep going up indefinitely at some radical rate of growth.
Here is a log chart of bitcoin's historical market capitalization, along with what I refer to as its (adoption-based) "Metcalfe Value." This chart empirically shows two things:
(a) bitcoin's market cap has grown roughly proportional to the square of these two chosen measures of "adoption."
(b) "adoption" (based on these two measures) has grown roughly exponentially for five years.
Will bitcoin adoption continue to grow?
This is the post, the chart, and the question that everyone who has heard about Bitcoin should be confronted with.
Btw. do you have a theory about which one is leading the other? It seems to my old eye that in >50% of the cases price has been leading the transaction growth, but judging from a laptopscreen is not the way to do research...
The problem I see here is that, while a great savings/investment plan, it seems to be assuming that BTC will just keep going up indefinitely at some radical rate of growth.
Here is a log chart of bitcoin's historical market capitalization, along with what I refer to as its (adoption-based) "Metcalfe Value." This chart empirically shows two things:
(a) bitcoin's market cap has grown roughly proportional to the square of these two chosen measures of "adoption."
(b) "adoption" (based on these two measures) has grown roughly exponentially for five years.
Will bitcoin adoption continue to grow?
Back to bitcoin...
The problem I see here is that, while a great savings/investment plan, it seems to be assuming that BTC will just keep going up indefinitely at some radical rate of growth. What we have seen over the last few months should shed some light on how realistic that is. There isn't really a precedent for assuming that Bitcoin will continue to rocket up in value and double many times within an average person's life span.
I'm not anti-bitcoin growth, I'm holding some and certainly hope it will rise. But you need to be careful when everyone starts urging you to BUY! BUY! BUY! It may well be that they are trying to sell.
The problem I see here is that, while a great savings/investment plan, it seems to be assuming that BTC will just keep going up indefinitely at some radical rate of growth. What we have seen over the last few months should shed some light on how realistic that is. There isn't really a precedent for assuming that Bitcoin will continue to rocket up in value and double many times within an average person's life span.
I'm not anti-bitcoin growth, I'm holding some and certainly hope it will rise. But you need to be careful when everyone starts urging you to BUY! BUY! BUY! It may well be that they are trying to sell.
Just to make sure, I understand the concept:
Buy.
When 1st doubling happens, sell 10% of what I have.
When 2nd doubling happens, sell 10% of what I have.
When 3rd doubling happens, sell 10% of what I have.
...
right?
And it should apply to anything that seems to keep on growing in price.
Buy.
When 1st doubling happens, sell 10% of what I have.
When 2nd doubling happens, sell 10% of what I have.
When 3rd doubling happens, sell 10% of what I have.
...
right?
And it should apply to anything that seems to keep on growing in price.
The rationale is that Bitcoin seems to have much more upside (100,000s of %) than downside (max 100%), but we do not know the probabilities. It has gone up so far, but if it fails, we only know from the hindsight. Therefore a risk-balancing way is to buy in now with whatever amount you want to risk, wait for price to go up, and sell gradually after price has increased. This way both the cash and bitcoin balance keep going up as long as bitcoin price goes up.
In my opinion you should apply this method only to things that can go really high. Most things cannot
Just to make sure, I understand the concept:
Buy.
When 1st doubling happens, sell 10% of what I have.
When 2nd doubling happens, sell 10% of what I have.
When 3rd doubling happens, sell 10% of what I have.
...
right?
And it should apply to anything that seems to keep on growing in price.
Buy.
When 1st doubling happens, sell 10% of what I have.
When 2nd doubling happens, sell 10% of what I have.
When 3rd doubling happens, sell 10% of what I have.
...
right?
And it should apply to anything that seems to keep on growing in price.
Great post and thank you. Although I don't understand do you think bitcoin is still profitable for the people coming into the game now ?
Bitcoin market cap: $5-6 billion
Gold: $6-7 trillion
USD: M2 money supply - $ 10 trillion
Offshore wealth: $20-30 trillion
Either bitcoin becomes useful to lots of people and ends up being worth more than today or it fails miserably. Yes, there's plenty of room for growth for those that get in now, in 2015 and probably 2016 & 2017.
Great post and thank you. Although I don't understand do you think bitcoin is still profitable for the people coming into the game now ?
If you buy now, it is quite likely you will get to dividend phase this year
rpietila, any comments on my table? Do you think its unproductive in terms of capital allocation/risk reward the numbers i used? Also, about alex post in page 1 if i remember well, are you agree that also the inflationary forces on USD vs. the BTC theoretical deflationary/stable environment will help to shape the equation even better?
Thanks for your amazing post! You are responsible for half an hour lost toying with excel
I think you should conserve the bitcoins by skipping the first few sales, only start selling at $2,000 would make it better imo.
Buy now as they are cheap.
If you buy now, it is quite likely you will get to dividend phase this year
rpietila, any comments on my table? Do you think its unproductive in terms of capital allocation/risk reward the numbers i used? Also, about alex post in page 1 if i remember well, are you agree that also the inflationary forces on USD vs. the BTC theoretical deflationary/stable environment will help to shape the equation even better?
Thanks for your amazing post! You are responsible for half an hour lost toying with excel
If you buy now, it is quite likely you will get to dividend phase this year
Jump to: