I had that crazy (maybe wasn't so crazy) idea in the morning. I was about to put the rest of all my FIAT (6 figures) to BTC but then I didn't. Did another small $200 DCA instead.
Isn't that a sure bet? I mean who doesn't believe here that BTC won't make it above 9k again? Last time I said these lines it was somewhere between 4k and 6k, and I still didn't buy (I mean not all in), and it damn went above 9k indeed.
From 8k to 9k that was %12 sure gains. (It is %6 now)
From time to time, you come out with some real doozies, mindrust.
Based on my round about idea about the total size of your BTC investment, how the fuck could you have anywhere close to 6 figures of fiat available? You must be joking, right?
Note: Remember this is the dollars/BTC thread so our general reference point is dollars, when we are referring to fiat.
Surely, I cannot tell you any kind of exact formula, but before anyone invests in BTC, they should have the rest of their life in order, and have their bigger bills paid and have their cashflow figured out for 6-18 months into the future. Therefore, when considering what funds that they have available for BTC investment, they have the rest of those matters accounted.
Accordingly, you also said that you largely only buy BTC and HODL, you do not sell, so accounting for your own practices, you have also said that you DCA buy, buy on dips, and sometimes mistakenly FOMO buy. Anynow, therefore, in the past 3 months, there have been all kinds of ongoing buying opportunities, so in that regard, I would be quite surprised if the value of your fiat should be anywhere close to the 20% or more of the value of your BTC.
Therefore, if you were to have 6 figures of fiat, then you would have $500k of value in BTC (which at current prices would be about 59 BTC - that is $100k/.2 = $500).
Something that you are saying is quite off, unless you had been largely contemplating and calculating some kind of gambling (overleveraging) move that would involve taking money from somewhere that you should not be taking it, in order to bet on bitcoin. That does seem to be what you are contemplating/calculating. In my thinking, those kinds of moves tend to be desperation moves, and not necessary in bitcoin, even if there could be some decent probabilities that they could pay off quite handsomely - even though personally, I rarely play those kinds of gambling approaches.**
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I will concede that from time to time (and historically), I have used zero interest credit card promotional moneys to increase my cashflow, and thereby buying bitcoin with a decent portion of that increased cashflow funds, so I am not completely immuned to a certain amount of leveraging/gambling that could have ended up going sour on me.For me if someone has about 59btc (500K value) and 100K cash, going all the way and investing the rest of the cash in btc is a reckless move even when I think that btc is likely to appreciate.
Let's just clarify that this hypothetical is not about mindrust, because mindrust has subsequently clarified (somewhat) that his ratios are quite different than the above scenario - and I had gotten confused in considering that the only way that mindrust would have reasonably had $100k or more in cash would be if he had $500k in BTC... which mindrust had shown me to be wrong in that speculation....
So in some sense, I am all mixed up about what would be reasonable because he seems to be describing a whole different set of circumstances in which a person might chose to invest only in BTC and fiat and not have any other significant or meaningful investments. Sure, such a strategy could be made to be reasonable, but I had kind of presumed that mindrust had other investments (and seems to be that I was mostly wrong). By the way, mindrust seems to be more in the territory of $60k value in BTC and $100k+ value in cash, so surely his situation seems to be a bit more skewed in favor of cash, currently...
I guess ultimately each guy (or perhaps gal) is going to have to figure out his/her balance, and in a hypothetical situation of $500k in BTC and $100k in cash we might want to get an approximate idea of the cost basis of the BTC in order to figure out a strategy for the $100k that is in cash. In any event, when we are referring to these kinds of investible cash reserves, I am kind of assuming that there is other cash that is available to cover 6 to 18 months worth of expenses (including possible emergencies), yet just knowing how much a guy has right at this time, does not give us enough information, unless we presume that he has his 6 to 18 months covered which might end up presuming some kind of assurances of how much cash flow is ensured to be coming in during that time (and some people vary more than others in regards to how certain is their cashflow and whether they would have back-up cashflow in case their primary cashflow sources were to dry up or somehow get interfered with).
I also have no real problems with play it by ear strategies. So let's say that a certain amount of the extra cash is set for buying on dips (even with buy orders set), and another part of the cash has been scheduled into DCA projections over the next several months, there also can be circumstances in which another $3k comes into the picture because of some additional cash flow. Then in those circumstances, if all the other monies are accounted for, I would thereby immediately plug the additional $3k into my existing strategy that has three parts a) buying on dips, b) DCA and c) immediate buying. I personally would do equal thirds for each of those branches of my strategy.
So, for me, anytime that I am rethinking the amount of cash that I have available and reallocating that cash, I am similar in my thinking as you, Biodom, I never would employ a strategy that immediately invests the money, but instead I divide the money into my system, in which only a third of the money, at most would end up getting invested immediately and the rest is scheduled based on other system that I outline for myself falling into dips and DCA.
Why? Because in this scenario 100K would increase your stash "only" 20% while eliminating any hint of diversification.
By no means I suggest investing the rest in alts.
Possibly we agree, Biodom. I don't really consider investing in alts to be diversification because they are mostly in the same asset class as bitcoin, and therefore it is just adding risk upon your bitcoin investment to invest into the same area. I know that some people want to consider alts differently, so that is their choice, but they should be attempting to recognize that the there is not a BIG difference from bitcoin, and therefore would not justify any kind of high percentage into them (10% at most in my thinking even though I could still accept more risky and crazy allocations that might go as high as 30% into such alts (aka shitcoins))
Keep cash (in $$). I don't know your geo location, so cannot rec. other currency or real estate. Some gold might be OK too, maybe split half and half (half cash half gold). I used to love stocks, reduced them lately.
Honestly, everything is so complicated right now, it is difficult to make the right decision (apart from bitcoin, which is solid).
I agree that we are living in a bit of a dilemma, these days, and there are so many people who have written off traditional investments, so sometimes it can be hard to relate to that. I do believe that bitcoin is accomplishing a lot of the same things as gold, but yeah it is possible to have a portion of value into gold, traditional stocks and realestate, like you said. Ultimately, we likely have confidence that bitcoin is the better of the investments, even though risky, which likely causes us to put a lot less into any of those traditional investments that are of a different category from bitcoin.
Another dynamic that I understand is that when anyone is first starting to invest. Let's say that they are in their early 20s or even in their late teens, and they are just leaving home, so they do not have a lot of money to invest. I understand that in those circumstances, they might not diversify very much because they hardly have anything that they are working with. So they may start out by investing in one asset at a time and building their wealth and then adding assets after their wealth has crossed certain thresholds, such as going over $20k or $50k or $100k. Each person might figure out differing triggering levels that would cause them to make their diversification decision and take action upon their diversification decision and plan at their preset thresholds (which of course they can tweak those thresholds too, based on changing life circumstances and perhaps even changing views).
