When actual risk is swamped by volaility, those who discount risk/reward on the basis of volatility will grossly overestimate risk, and those who estimate it more accurately have a huge advantage. They will buy more and at higher prices, and therefore hold more when appreciation occurs. They will hold through the volatility. I think that many "weak hands" in bitcoin are the result of mistaking risk and vol. This may be the only advantage which technical people have over wall street types: They understand the fundamental risks better, and are less likely to mistake them with volatility.
So much wisdom from this poster +1.
I, for one, do not regard volatility as a risk at all, rather an opportunity to generate extra gains (if you are into trading).
As my planned expenses for the year 2014 are only about 10% of my assets (even in absence of any income), it does not matter what the BTC fiat price does in the short term, 1-2 years. The main risk I am concerned about with it is total loss, and that can be hedged against with reasonable but not overcautious diversification. Keeping 50%+ in bitcoins is reasonable because its historical return has been about 1000% per year.
The people with this mindset have done the best with Bitcoin historically. Going all-in is risky, if you have sudden expenses or are moody. Having less than 50% bitcoins, you miss out on gains that I posit are actually risk-free.
) and you may have a very rough number. I'd imagine its more than 10K though.
