Thanks for all the replies. Well, I wish I would have listened to my intention and bought Facebook stocks on day 1. Instead, I listened to others again. When it comes to diversification, I only know the usual suspects. Gold, wich is in the hand of the US government and they manipulate the price how they like. Same goes on with silver. And any other usual investment is controlled by the governments. So I only see BTC as independent at the moment.
60% in BTC, yeah thats a lot. And maybe you all are right. It is more then enough. But it bothers me to keep the rest of my money in FIAT at home. I don´t trust any banks. Gold, I would like to buy some gold and store it at home. But there is no profit with gold. And about other investments, I have no idea.
Actually, if you have that much cash liquid...sign up at localbitcoins to buy/sell bitcoins for a profit. Start earning money on your holdings.
I agree...
There are ways to put your cash to work, without getting so anxious about having some cash that may seem as if it is not working (because it is merely in reserve for wider downward price swings, for example).
So for example, underdog 81 could allocate the cash towards buying at certain strategic points...
Let's say for example, Underdog 81 has about 100 bitcoins and about $20k in cash, but he does not have any other investments.
I don't really have any major problem with someone who doesn't want to invest in stocks or gold or real estate... Actually bitcoin gives quite a bit of flexibility to trade whenever a guy wants, and there are ways in which the fees can be near or close to zero in bitcoin, as compared with some other mainstream investments.
Accordingly, underdog 81 should figure that for every dollar bitcoin goes up, his total BTC portfolio value goes up $100... accordingly, if BTC goes up $10, then his BTC portfolio goes up $1000... There's a lot that can be worked from that framework... and he should not be conceiving that he will get more rich if he invests all of his fiat in BTC because, there would likely be too much stress and resentment if the BTC market works against him.
Accordingly, underdog81 could stagger his cash allocation to invest in $5 or $10 increments.. and maintain some flexibility. For example, he could invest into BTC approximately $500 for every $5 that BTC prices go down, and sell $200 for every $10 that it goes up.. (and don't be too rigid).
There are a lot of ways to tweak the preallocated numbers too, especially a person does not want to be too rigid especially if he is pretty sure that he can buy BTC cheaper in the next few hours or sell higher in the next few hours (or even days); however, at the same time, a guy doesn't want to become too greedy either, so needs to lock in the buy or the sell at certain points when the price direction may be changing, even if it is not at the exact top or bottom of the price swing... and there is no need to catch every price swing either because it is good to have "a life" even when trading the BTC price swings... it certainly should become easier after some practice and there are ways to learn to leave orders open when the market leaves you behind in either direction, because each of your BTC trades are not a high percentage of your total BTC holdings...
And, with such a strategy, underdog81 should be able to build both fiat and BTC... in the long run, as long as don't get too whimsical in strategies or greedy. Oh, and sometimes in that regard, a person needs to have enough patience to wait out the price to let the price come to him or just to let it slide when the price seems to be going in the opposite direction... just sell at a higher price or buy at a lower price... when the price moves against you.. in order to make up for the still open position.
The problem with daytrading is, as I live in Germany (and understood it correctly), I have to pay 30% taxes with every cashout. Only when I hold longer than 1 year, then there are no taxes. And hell I don´t give them dicks $1 of taxes. I invest and risk my money and if I lose it they don´t care. But when I make profits, they want 30%. Fuck them.
Otherwise without taxes I would do it. Buy 50 coins @450, sell them @460 and make $500 profit. Wait for a little crash, redo it etc. I know you mean it different but thats what I would do if there were no taxes.
The 60% investment is long term. With the rest I would try daytrading and make some extra cash with every high/low.
Yes, I am talking about trading with a little different and more conservative strategy, because if you buy and sell even 10 coins, it is too stressful and risky when the market moves against you also when you are asserting that BTC is your only investment vehicle. In this regard, you are talking about trading 50 coins, which seems a bit ridiculous because it would be nearly 40% of your total holdings, and you could easily bet the wrong way. Look at Adam, he sold a bunch of coins in the lower $400s and he has been waiting for $390 for quite a long time, and will we go to $390? I certainly don't know but it is not looking good, and I would not want to have more than 3-5% of my stash placed in such a bet. In essence, I am talking about trading less than 10% on a regular basis and if the market moves against you the levels may rise above 10% or even 20% at the utmost when you keep buying on the way down or selling on the way up..
In your case, if your total fiat currently is 35%, then maybe your EXTREME scenarios would include trading up to 40%, but you would not start trading 40%, you would have up to 40% in reserves that you could use in case the market continued to move against you for a prolonged period ... and then hopefully make all of the money back later when the market reverses.
In essence I am suggesting (especially when someone has all of their eggs in one basket and one kind of investment) that s/he needs to work with a smaller level of his holdings to ensure profitability in either direction, so long as ultimately in the longer term BTC prices go up, as we all expect.
Regarding taxable events, you can avoid taxes on the trading portion of your btc by keeping your money within exchanges, so it ONLY becomes a taxable after you remove it from the exchange. I understand that a lot of people are hesitant about keeping their money on exchanges, so in that regard, you only keep a portion of your holdings with them.. and you do not create taxable events by converting to fiat, instead you transfer the money around in BTC and only convert to fiat when you are prepared to get TAXED... by the man.
One way to convert back and forth from BTC to fiat without fees is on Uphold. You need to become a verified member of their service (which is pretty easy), and once you do then you can trade in various denominations without fees. A disadvantage of Uphold is that your converting back and forth has to be manual, so you have to log in and do it. You cannot set it up to trigger and to trade at certain quantities and price triggers.
