Topic: Whales circling, holding BTC in the doldrums, calm before the storm? (Read 2490 times)

This (bolded part). I understand both you and "rationalspeculator" points, but I do not agree with them. I live comfortably on what I generate with my job. I have and I always had 0 debt - in fact I really don't understand how US citizens take loans for everything... jeez man, to buy new furniture for the house too, how crazy is that? In my book, what you cannot pay cash, you cannot afford. This includes cars and real estate. But that's another story.

What I mean is that my life won't change a bit if BTC goes to 0. And don't get me wrong: I'm not saying "hold every single bitcoin till you die". I have already established clear exit points for 50% of my BTC holdings. If all those points are reached, my life will improve A LOT, and I will still keep 50% of my current holdings till the very end.

Really good point. "What you can afford to lose" is always changing, in some sense. Well in one sense if you keep the same lifestyle and aren't in debt, you could "afford to lose" your Bitcoin millions. But in another sense, if you had recently won the lottery and had $5 million of new money representing 95% of your wealth, would you really think it wise to put almost all of it into bitcoins to play the "binary bet"!?

I'm here till then end too... but I'm putting a portion of my bitcoins to work market making.  Somebody's got to take the risk of getting washed out on the spikes up if we want to have any hope of even temporary stability.  Usually, it retraces a good bit, but whatever USD I can't get back in for a profit goes to paying down student loans.  When I'm debt free, I may have to revisit my strategy.

True, with the market depth we had back then, buying $5,000 worth of coins would have pushed the price very hard - let's say that you would have bought half of what I said (BTC53,000). My point still stands, obviously.

I simply do not agree with you. My savings are composed by X fiat and X BTC. I don't multiply the total amount of BTC I own x the USD/BTC exchange rate. I think this is the difference between you an me: you want to speculate with bitcoins to produce fiat profits. On the contrary, I made a gamble with bitcoins - if I lose, let's be it. If BTC truly succeeds, my life really changed.

I knew this was my choice from the very beginning. Why?

Because BTC can change the world, it has an amazing potential - and I believe my strategy is the only one that will enable me to maximize that potential.
Because BTC is extremely risky, and in my opinion my strategy is the only wise one - with it I have my soul in peace.

Then: use the search tool in these forums. Check the 2010 and 2011 posts. You will read about people that had hundreds of thousands of Bitcoins that cashed out just one year ago... To buy a nice flat (for example: http://sc5.io/blog/2013/02/sc5er-intro-the-bitcoin-guy/). Well, I've made a choice: I'm in it for the long term. Sure, I can accept using a little part of my BTC to buy something I cannot afford with my fiat savings - let's say a nice car. But I'm sure as hell that I'm not here to reap fiat profits, I will not let greed or fear to take over, because everyone who did that made a mistake.

I'm here to play this game till the very end.

I'm really tired of this argument.
No billionaire will do this because:  1)  Said person probably is too busy to care, or even KNOW, about Bitcoin.  At that level of fiat worth, it is a full-time job to keep it.
2) It would be REALLY bad PR if any billionaire "got a hair up his/her ass" and did this -- Bitcoin is still niche, but it is widely enough known at this point that the person doing the smashing would probably end up with more enemies than friends because of it.  Business enemies / friends (likely the only kind such a busy person has).

Bill Gates called Bitcoin a "techno tour-de-force", while his dumb codger rich business friends dismissed it out of ignorance...

The market is still small enough to manipulate, but no single individual has good reason to destroy it at this point IMO.

While I generally agree that holding is the better strategy, it is incorrect to say you could've bought 52,000 BTC for $5,000. In the real world, as soon as you start buying, you push the price up. This is a common misconception for all the arguments that start with "back in 2011, if you had bought X number of BTC"... the fact is, the price was low back then because nobody was buying 50k BTC, and not the other way around.

Nevertheless, buy and hold is a MUCH better strategy than trying to predict market swings where the number of unknown variables is as high as it is with Bitcoin.

Good points. I agree your approach is - the - way to become rich with bitcoins.  

However, invest only what you can afford to lose, is not what you are applying in my opinion.

Sure, when you start out with the 5k, few percent of your capital, you do, but the $5k became $5 million in your example, which now represents say 95% of your capital. Can you honestly say at that point that you are 'investing in bitcoin only what you can afford to lose'?

Investing is a continuous activity. If you really continuously invest in bitcoin only what you can afford to lose, then you keep your exposure at a low percentage. In such situation you will have profited much less and would have left today a tiny fraction of those bitcoins.

I think it would be more correct to state that your strategy to buy some, and hold on to them, let it grow very big, never sell, is the most profitable strategy, but also the most risky one, as if it works out your portfolio ends up with a very large concentrated position in bitcoins, possibly valued in the millions over time, all of which can be lost in a very short time, if bitcoin would ever fail and you don't see it coming or way too late.

I think risk management of a portfolio means that you continuously review your portfolio with stress tests, if x happens, what will happen to my capital? You try to find a balance between safety, as well as growth. The safety part however makes it impossible to have say a position in bitcoins larger than 50% of your portfolio. In practice this means that if you apply risk control, you are obligated to sell off bitcoins if it works out. Preventing you to make the huge profits your strategy would make when holding on to all bitcoins, but also avoiding the huge loses your strategy can produce.

I'm often tempted though to follow your strategy. But when I listen to my different parts, some of them become very fearful when bitcoins become too large of a percentage of my capital, and I refuse to ignore them. I negotiate with them, and it does lead to selling of bitcoins. The inverse happens too though, I am buying on dips, when my exposure has shrunk below my target goal. Up until now this strategy has given me the same amount of profit as a buy and hold would have done. At the same time my portfolio has been less volatile, and I believe more secure too. But I do admit that my strategy will likely end up me having less performance over time compared to a buy and hold. Security does come with a price I think.

Seriously well put.  One of the most fascinating aspects of BTC is the realization of what you just said.  That was one of the main hooks for me, and I'm sure a lot of other people who have gotten into it.

I follow my own advice.

And I will demonstrate you something empyrically: on 10th, September 2010 you could have bought BTC52,361 for $5,000 (the price per 1BTC was $0.095).

One year later, that amount of BTC was worth $210k dollars. If you could afford to lose $5,000, you might have followed my advice and HOLDED. I know many who did. If you couldn't afford to lose $5,000, and as in September 2011 we were in the middle of multi-month bear market, you would have sold to secure your "amazing" profits.

Now make the calculations with the current price, and you will realize how much money you would have lost in just one year and a half for not being cold minded enough to hold onto your BTC53,361

The following statement was just empirically proven wrong in the recent past:


As I said earlier, BTC is a gamble - and the real winners will be the ones with the balls to hold till the last minute. If you invested an amount you cannot afford to lose, from one side you are a fool because Bitcoin is beta software, and it can go south at any minute. Not acknowledging this is plain and simply delusional. And secondly, I can guarantee that you will not be one of the real winners, because you will have trembling hands as soon as a deep crash puts in danger your investment, and thus you will not be able to hold till you are really set for life.

I care about short term future price.

I'm not sure I agree with the words of wisdom.


1. Don't invest more than you can afford to lose.

If I follow such advise I end up investing only a few percent of my capital in anything. Losing more then a few percent means I need to reduce my lifestyle.

However, investing only a few percent will not allow me to increase my lifestyle if it works out. Basically investing a few percent won't make a difference for me, when it goes down, or when it goes up.

I think this is generally true for most people.

Just to check. Do you follow that advice yourself? How much percent of your capital is invested in Bitcoin today? Can you really afford to lose this? What would be the impact on your life if this were to happen?


2. The worst thing you can do is to sell too cheap (i mean right now).

If bitcoins become cheaper in the future this statement will have empirically proven to be wrong, not?


 

words of wisdom.

What worries me is the extraordinarily low volume on a busy Wednesday and the supposedly large influx of new money after the long bank holidays in Japan. I can see the price going both ways which is determined by the large players.

Indecision means lack of confidence and lack of confidence means vulnerability to trend reversal.
A slightly bad news will trigger the button and we will see waves of panic dumping as what we saw last week.

You forget one thing. Most people are greedy. The more they have the more they want. And as long as they can make money on bitcoin they wont destroy it. If i would have big amounts of money to invest (and its not easy to find good investment these days) i would lower price as much as possible, then buy as many as i can and then get price to the high levels so people who didnt know what will happen with bitcoin and sold cheap (because price was low and they were thinking it will always be like that) will have to buy back for 10x or 100x more they sold for. Then suddenly they wont be early adopters anymore because they wanted to save/earn few $$$ on day trading, and become later adopters and be forced to buy back as rest of people.

This is why some people are rich because they can make they own mind and spot good opportunities, and most people are poor because they dont know what to think and they simply follow the rest and are easy to manipulate. To sell or buy when the big fish wants.

My Bad.

Thanks   

Welcome newb. Please note that this belongs to the speculation forum

I don't know, I was sorta thinking everyone cares that market manipulation is the weak-link for btc destruction.

Let's be real, any-'ol billionaire can smash btc to the ground if they wake up in bad mood and decide they don't much like this whole bitcoin economy.
 



 

+1

who really cares? If bitcoin will fail its value will be 0 if it will succeed then value will be very high. As long as you are not daily trader (or gambler) then its not important what is in between. The worst thing you can do is to sell too cheap (i mean right now). And you should not invest more than you can afford to loose anyway.