Thread by @FullTimeBitcoin

So you’re smart enough to know not to trade bitcoin, you #stacksats, but you’re still considering a little dabble “in this next cycle.” Maybe sell 5-10% of your stash near the top, wait for the absurd Mayer Multiple, then buy back in and have more sats!
I wouldn’t, here’s why:

Let’s look at something resembling a best case scenario. You have 10 BTC, you decide to sell 10% right at the $250k top. You take you’re $250k and buy back in at $50k getting 5 BTC. Now you have 14, you’re a genius! Hyperbitcoinization here we come.

But wait, you triggered a capital gains event (hopefully long term) and 25% or $62.5k (at least) is gone. You still buy 3.75 BTC, 2.75 more than you had. This is probably the best case scenario. There are many ways it can go wrong.

We’re priced in USD. If you’ve been paying attention to fed policy recently and the global macro environment then you know we’re in uncharted territory in many ways. Negative interest rates, repo market injections, trade wars. A stable USD is not a given.

Is bitcoin a risk asset or a safe haven? We can make models and draw lines on the chart all day long but they’re all based on the USD pair and there is systemic risk everywhere. 👀

What would a collapse of 90% of the global currencies do to the bitcoin price? Well I’d rather have bitcoin if I lived in one of those countries, but in the short term that’s likely to just make the dollar stronger - by a lot. Which could certainly suppress the BTCUSD pair.

At the same time the fed is likely to increase its balance sheet and the money supply drastically over the next few years - having potentially the opposite effect. Will these balance out, very hard to predict! Honey badger probably don’t care?!

To all the above you say 🤷‍♂️, but S2F seems to price it all in or filter it out or whatever. You have information asymmetry. You know this is coming, and your not being greedy, you just want a little more bitcoin, to not trade would be leaving money on the table!

Well maybe, but correlation and cointigration still don’t necessarily = causation. I love S2F as much as the next bitcoiner, but those who understand it best know that it’s just a model. It is not destiny, it is not guaranteed.

At this point if the model breaks to the downside there will be a loss of institutional trust. And if it breaks to the upside you’ll be left with less btc because you thought you knew better. 9 is still more than 6.15 so you’ll be fine, but salty. Or maybe you won’t be so lucky:

Let’s look at a worse case scenario. We touch $250k, your target, your finger is on the trigger to sell but you second guess yourself. What if it keeps going up? You’re not convinced it’s the top, but you had a plan. What to do? You decide to sleep on it.

You wake up and we’re at $200k and dropping fast. You sell 2 BTC at $190k. Later that week we’re back around $225k, So you decide to sell another 3 BTC. You’re sure this is the top, one last trap, the death throws of a bull market.

You’ve got 50% of your btc left and a $250k+ tax bill. Then the market rips. 250, 300, 400, 500. Up and up it goes while you’re convinced your timing was just off by a little bit, but surely this is irrational exuberance and we’ll top at any moment. Except it keeps going up!

Endlessly pissed at yourself for not sticking to your plan and watching the bitcoin price hover around $750k you have a choice to make, do you buy back one of your lost coins? It’s expensive but your a true believer, $750k is still cheap! You tell yourself you won’t capitulate!

As the price blows past $1m you should be ecstatic, hyperbitcoinization is upon us, but you’re bitter. You’re a real bitcoiner, you deserve you’re 10BTC and the extra 12%. You’ve been waiting years for this, this is what you’re owed.

You make what feels at the time like a very safe 5x margin long with half of your remaining coins. You just need the market to go up another measly 65% and you’re back to even with USD in the bank! You’re being conservative, you’re not one of those idiots going 100x.

Well of course it doesn’t keep going up, in the free market a fool and their money are soon departed. As the position starts to turn against you, you ignore your stop loss. All semblances of rationality are gone and you hardly recognize yourself.

You deposit the rest of your bitcoin to prevent a margin call. You use your USD and keep buying into your losing position. Eventually you’re liquidated. You’re wife leaves you, life sucks.

Is any of that going to happen to you, of course not, you’re way too smart! You’ll stick to your plan. You know how important money management is!

Don’t be stupid. Don’t trade. Stay humble, stack sats.