Bitcoin is under $30,000.
Here is a quick thread to document what I'm thinking right now and what my strategy is during these price drawdowns.
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Here is a quick thread to document what I'm thinking right now and what my strategy is during these price drawdowns.
ππΌππΌππΌ
1/ I'm not a trader. I don't look at charts and I don't try to time markets. If anything, I'm an atrocious trader who is guaranteed to lose :)
I have a very long-term view of the asset and believe it will continue to accrue value and adoption over the next few decades.
I have a very long-term view of the asset and believe it will continue to accrue value and adoption over the next few decades.
2/ My strategy with bitcoin over the last few years is simple β accumulate as much bitcoin as I can.
The word accumulate is important. That is an action you do with no intention of selling for profit later.
The word accumulate is important. That is an action you do with no intention of selling for profit later.
3/ The idea has always been to dollar cost average into bitcoin.
For those that don't know what this is, I basically buy bitcoin on a periodic basis without caring what the price is.
Sometimes I buy when price is high. Sometimes I buy when the price is low. Weekly or monthly.
For those that don't know what this is, I basically buy bitcoin on a periodic basis without caring what the price is.
Sometimes I buy when price is high. Sometimes I buy when the price is low. Weekly or monthly.
4/ The dollar cost average strategy relies on the idea that "time in the market is more important than timing the market."
This has historically been true in bitcoin. The asset has an annual compound growth rate of over 100% throughout the last decade.
This has historically been true in bitcoin. The asset has an annual compound growth rate of over 100% throughout the last decade.
5/ When the price of bitcoin falls, which it has been doing for the last few weeks, I try to speed up the frequency of my dollar cost averaging.
Given my oversized exposure to the asset, this isn't always easy. But I do my best and spend most of my time trying to find more $$
Given my oversized exposure to the asset, this isn't always easy. But I do my best and spend most of my time trying to find more $$
6/ I don't care about the short term price movement of bitcoin after I buy it. Remember, I'm not a trader.
I buy the asset and tell myself that I'm going to hand it to my grandchildren one day.
As Warren Buffett famously says, "our favorite holding period is forever."
I buy the asset and tell myself that I'm going to hand it to my grandchildren one day.
As Warren Buffett famously says, "our favorite holding period is forever."
7/ The key to investing in a volatile asset like bitcoin is that you have to size your portfolio allocation correctly.
Don't invest money that you will need for daily expenses or money that you can't afford to lose.
Markets are volatile. Long term investing means LONG TERM.
Don't invest money that you will need for daily expenses or money that you can't afford to lose.
Markets are volatile. Long term investing means LONG TERM.
8/ A key reason why I take the long term holding strategy to the extreme is for emotional control and peace of mind.
It is easy to stomach wild price swings when you know you're handing the asset to your grandchildren.
Fear and greed are very real. Insulate yourself from them.
It is easy to stomach wild price swings when you know you're handing the asset to your grandchildren.
Fear and greed are very real. Insulate yourself from them.
9/ I have no clue where the price of bitcoin is going in the short term. It could go higher. It could go lower.
I simply don't know and don't believe most people know either.
However, I know that I want to own as much bitcoin as possible for the long term.
I simply don't know and don't believe most people know either.
However, I know that I want to own as much bitcoin as possible for the long term.
10/ Given my long time horizon view, the longer bitcoin stays at depressed prices, the more bitcoin I can accumulate at these levels.
This is a weird thing with most bitcoin holders. The strong hands welcome low prices for long periods of time because it helps with accumulation.
This is a weird thing with most bitcoin holders. The strong hands welcome low prices for long periods of time because it helps with accumulation.
11/11 So here is what I'm thinking and doing right now:
- Strong belief in bitcoin
- Long term view on asset
- Dollar cost averaging aggressively
- Not worried over short term price
- Plan to hand bitcoin to my grandchildren
Could I be wrong? Sure. I'm not betting on it though.
- Strong belief in bitcoin
- Long term view on asset
- Dollar cost averaging aggressively
- Not worried over short term price
- Plan to hand bitcoin to my grandchildren
Could I be wrong? Sure. I'm not betting on it though.
Should go without saying, but this is not financial advice. Do your own research.
I merely putting this out there to have public documentation of what I'm thinking in the moment and what my plan is :)
I merely putting this out there to have public documentation of what I'm thinking in the moment and what my plan is :)
β’ β’ β’
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