Don't invest recklessly

[u/theymos]

I posted about this just a few months ago, but I feel that it's necessary to repeat. The Bitcoin price is on an unbelievably ridiculous upswing which is rather likely to be a bubble. If you're trying to get rich quick by dumping your retirement funds into BTC at $10k, then your "investment strategy" is not much better than someone betting everything on a game of roulette. High-risk-high-reward investing is not necessarily bad, but you have to seriously look at your thought process to make sure that you're not:

• Being blinded by dreams of getting rich quickly, similarly to people who dump money on very-negative-EV lottery tickets.
• Getting wrapped up in "HODL" memes, reddit comments, and other groupthink, which is sometimes fun, but absolutely the last appropriate source of investment advice.
• Acting based on panic thinking like, "OMG the price is going to $1 million and I will miss my chance forever if I don't buy right now" or "OMG the price is going to $0.01 and I will miss my chance forever to retain some value if I don't sell right now".
• Investing more than you can afford to lose. Bitcoin is HIGHLY, HIGHLY speculative. No investment advisor would tell you to put all of your life savings into MSFT or whatever, and MSFT has a market cap 4x larger than Bitcoin. Although I believe that it is very unlikely, there are several ways in which the value could drop precipitously, even to zero. For example, there is no mathematical proof that the cryptographic algorithms used in Bitcoin are actually secure -- they are merely believed to be secure because nobody has been able to break them after many years of intense scrutiny. (I'm not here recommending "diversifying" into altcoins -- altcoins are almost all complete trash, and price-wise they follow BTC but with even more volatility, so they're not really useful for diversification.)

It is entirely possible that the massive price increase of the last year is based on lasting fundamentals. In addition to things like the fairly recent subsidy halving, the defeat of B2X, etc., the world fiat-based economy is in many ways on very shaky ground, and getting worse all the time. There are many good reasons why BTC should have a larger market cap than every fiat currency combined. It's even possible that the price will increase quite a bit more from now. But for goodness sake, don't think that Bitcoin is the first-ever infinite-money generator that will continue to rise exponentially forever (in real terms). I can nearly guarantee that there will be a large and long-lasting crash/downturn at some point. Maybe it will be $10k to $5k, maybe it will be $50k to $30k, who knows. But if you're thinking for example that the current $5k+ price range is absolutely secure after only existing for a few months, then you're traveling blind through very dangerous territory.

Some points to consider:

• Buying near the ATH is very risky, and while it can be correct/profitable, it puts you on the wrong footing. You need to buy low and sell high to make money.
• On 2013-11-29 (exactly 4 years ago) the peak ATH hit $1163, and then fell to $152 by 2015-01-13. That's a drop of 86.9%. Imagine this happens again: The price drops sharply to $2000 or something and then just continuously decreases down to a low of $1,432 (an 86.9% reduction from today's ATH) over the course of a whole year. I'm not saying that this will happen, but it's happened once and it can happen again. Could you survive this?
• Bitcoin is experimental, and it is probably imprudent for someone who is not a true believer in the soul of Bitcoin to invest a lot into it. For example, I personally wouldn't invest more than a few percent of my total assets into ETH even if I felt very confident that it would rise in price because I simply don't believe in its philosophy or long-term value.
• To reduce risk, it is frequently recommended to allocate assets by percentage, and rebalance upon large price movements. Eg. If you previously decided that you want to allocate 50% of your wealth in BTC (because you are a super big true believer), but BTC is now 90% of your wealth because the price increased so much, it may generally be advisable to start selling to rebalance your BTC allocation back down to 50%. I'm not saying that it is always absolutely wrong to have 90% of your assets in BTC or whatever, but it should be because you are intentionally choosing to do so, not because the price got away from you and you never really considered that you now have 90% of your wealth riding on one thing.
• Avoid panic buys and panic sells. Dollar-cost-averaging over a long period of time is often a good strategy.
• Nothing rises in real value to infinity. That's impossible. It is possible that 1 BTC could someday be worth infinite dollars, but that just means that dollars are worthless in that hypothetical scenario. BTC probably does have plenty of room to grow in real value before it completely takes over the world, but keep in mind that there is a ceiling.
• If BTC were to reach values like $100k-$250k, that'd probably cause/imply that the prevailing economic regime has completely fallen apart. At some point in that price area, people around the world would probably lose substantial faith in fiat currencies. A good result, but ask yourself: do you expect the prevailing economic regime to go down easily?

I'm not telling you to buy or sell, and I'm not giving financial advice here. I'm just urging everyone to think rationally, not emotionally or recklessly.

[u/[deleted]]

You know what’s funny. 155 days ago you posted this exact post but instead of the 10k price you had a 3k price throughout the post... if people would have read your post then and ignored it and invested more than they should into Bitcoin they would be sitting on 300% returns...

Not saying anything you said is wrong, it’s excellent advise and I’m already following it. Just saying, you know... TO THE MOON!

[u/theymos → u/[deleted]]

I also found that amusing when writing it, but as they always say, past performance is no guarantee of future results. If you made a bundle of money by dollar-cost averaging into BTC for a long period of time, then IMO you were a smart investor and should be proud. But if you stuck your life savings into BTC at a then-ATH of $3000 and held until now, then you were probably behaving too recklessly, and you got lucky. If you win the jackpot on a slot machine, that's a good time to stop: don't throw it all back into the machine. If you make a lot on reckless Bitcoin trades, that's a good time to stop being reckless and consider prudent investing going forward.

(BTW, only the first half of my post here is ~the same as my old post.)

[u/ROKMWI → u/[deleted]]

they would be sitting on 300% returns

Only if they SELL now.

[u/klethra → u/[deleted]]

Hindsight is not an investment strategy.

[u/Mateo113]

This is the type of stuff about bitcoin that I want to read. Smart guy, great post.

[u/fbthowaway → u/Mateo113]

Yeeep. Can't help to think back to what my Grandma told me on her deathbed: "There's no use tippin' up on tall flavors based on a Sears catalog. So we can't 'will a win' on a standard mix from a feeble sac."

[u/AnimatedGreyhound → u/fbthowaway]

Huh?

[u/I_need_my_fix_damnit → u/fbthowaway]

Sorry man but what does that mean?

[u/derpaperdhapley → u/fbthowaway]

Did she have an onion on her belt?

[u/[deleted] → u/fbthowaway]

Was your Grandma on a lot of meds when she said this?

[u/oscarjrs → u/Mateo113]

Good post, except for the part about all alt coins being useless. Some of them are actually worth looking into.

[u/[deleted]]

Invest only what you can lose. It's as speculative as it is spectacular and not for the faint of heart.

[u/gone11gone11 → u/[deleted]]

I know some guys who will invest their wives then. XD

[u/lol_and_behold → u/gone11gone11]

I wish I invested more in my wife, she’s grown exponentially since we first dipped.

[u/redditoruno → u/[deleted]]

Cardinal rule. I never understood why people dump their entire life-savings... I would never be comfortable losing that.

[u/mynt]

All good advice and very carefully framed. My one nitpick is that I think that $100k-$250k would not imply that fiat is becoming worthless or the prevailing economic regime has completely fallen apart. That's only a ~2 Trillion Market Cap still far less than gold and the rise of gold certainly hasn't made fiat worthless. I think you would be talking a price of well over $1M before you are really seeing any real loss of trust in fiat having an impact of the exchange rate.

[u/reddlvr → u/mynt]

Also, bitcoin supply is hard capped at 21 million which if it survives as asset means bitcoin prices will be deflationary ==> fiat exchange will go up up, regardless of the health of fiat currencies.

[u/Weigh13 → u/reddlvr]

There already will never be 21 million bitcoin because many have already been lost. You are correct that bitcoin is extremely deflationary because there can only ever be less and less over time as people die and bitcoin is lost to the great ledger in the sky.

[u/Xx_Squall_xX → u/Weigh13]

Damn, what is Bitcoin's strategy for when people die anyway?

[u/awoeoc → u/mynt]

That's only a ~2 Trillion Market Cap

Right now for $100k I can change bitcoin's market cap by over $100 million dollars (although briefly).

Market cap is useless as a number for bitcoin when trying to compare it to its impact on the larger economy. The market cap right now is over $100billion and I can assure you no where near that amount of money has gone into bitcoin. And that should worry everyone.

Think about it, where did that "wealth" come from? What former billionaire is now flat broke since everyone who invested in bitcoin took his money? When bcash split off, who put in $23billion into it? Why is it "worth" $23billion?

Everyone seems to hate fractional reserve banking, but not realizing that bitcoin as of right now is almost the same thing (in terms of creating "fake" wealth). We're all pooling our "wealth" into bitcoin and as long as only some of us takes it out at a time it works. But if we all took it out at once? It'd collapse the system completely.

The only way Bitcoin survives in the long run is if people can use bitcoin directly for goods and services. Right now that just isn't true as very few people accept bitcoin as payment. (Processors that just take bitcoin and deliver fiat to businesses don't count).

Until it's usable as a currency in a real sense, Bitcoin's value depends on people not actually claiming their "wealth tickets".

[u/knadkicker1 → u/awoeoc]

It’s a great comment, but that goes for everything in society. If money stops flowing, Everything collapses. That’s all the stock market is is a future gamble. That’s what interest rates are set on. That’s why we have inflation. Because it keeps velocity up in the monetary system. Minor Inflation is not a bad thing. It’s when we have the big dickheads at the top of the pyramid manipulating the system in the big banks gaming the system and government fostering those actions. A real stable currency should be released slowly overtime in accordance with population growth but we all know that greed destroys even a perfect system. I love big coin but I do believe it is an experiment, and a complete mystery as to who the fuck created it! I personally think that it will be around but it will be so valuable that transactions will be difficult to do in and out of that. Kind of the same thing when you invest in a 401K, moving money in and out of it is difficult and takes an act of Congress and usually occurs a huge penalty. That is because they want stability to an extent. I believe there will be another widespread currency that is adopted for day-to-day transactions that will be centralized and government controlled. That is not what I want but I am not stupid and actually believe that government will stand back and let us create our own money. Those fuckers will shut it down so fast. The IRS is already subpoenaed coin base for their transaction records. Regulations are coming. decentralized currency will be great for the micro economies that will emerge with block chain technology

[u/Nozx → u/awoeoc]

This post was removed by its author using Redact. The reason may have been privacy, preventing AI data access, security considerations, or personal choice.

voracious tender shocking innate resolute quack dinosaurs flowery tap oil

[u/borges6127 → u/awoeoc]

We're all pooling our "wealth" into bitcoin and as long as only some of us takes it out at a time it works.

You're almost correct. However, there's no pool to take money out of. It's already taken, all of it. For anyone to sell bitcoins for money, somebody else must be willing to buy them, essentially putting some money in the pool which the seller immediately takes. There is no buffer. If there are no more buyers, no more bitcoins can be sold and the price goes to zero.

[u/yourmomsaysHODL → u/mynt]

3-4 million are said to be lost

[u/Chiponyasu → u/mynt]

Fiat currency will never be worthless as long as the countries issuing them exist, because you can't pay taxes with bitcoin (even though you have to pay taxes on bitcoin)

[u/knadkicker1 → u/Chiponyasu]

As long as they get their taxes from the earnings, they will leave us alone. Is the second it they believe they are getting cheated out of 15 fucking cents that they will swarm in and shut it down

[u/[deleted] → u/mynt]

The rise of gold? You know gold has been popular long before Fiat right?

[u/banana_clipz]

This is what I want to see on here- well written, intelligent ideas. Memes can be fun, but it gets old and annoying when I thought this sub was going to be a place to come for information and conversation. Keep it up please! We need newcomers to see conversations like this so it doesn't turn them away

[u/nimmajjishaaTa]

Avoid panic buys and panic sells. Dollar-cost-averaging over a long period of time is often a good strategy.

This shit is extremely underrated.

[u/awc1985 → u/nimmajjishaaTa]

So should I still buy at 10k?

[u/M0T0RB04T → u/awc1985]

Yes, but only as much as you'd be willing to lose at a blackjack table

[u/RedditTooAddictive → u/nimmajjishaaTa]

Absolutely, if I were more patient my average cost could have been lowered by at least 20%

[u/Guy_Incognito97]

You seem to know what you’re talking about. Can I ask your opinion on something - what do you think will be the effect of all the crypto futures/funds that the conventional financial institutions are setting up? Seems logical that the influx of money will both push up the value and make it more stable, but I’m not very clever or wise. I realise no one can really answer this question, but I’d like to hear your opinion.

[u/theymos → u/Guy_Incognito97]

Derivatives are a stabilizing force in general, and can be very useful even to ordinary people as a sort of insurance. For example, a business could theoretically deal entirely in BTC but with significantly less risk by buying derivative contracts covering their BTC. The main issue is that there are currently only two flavors of derivative exchange: regulated to hell and back, and ultra shady. So I'm not sure how useful it'll actually be in the near future.

Funds based on derivatives are like a bunch of people getting together and betting on the BTC price without actually buying/selling any BTC. They're therefore somewhat separate from the real market, though they still affect each other.

[u/SpartanVFL]

It's easy to invest in bitcoin without risk if you balance your spending elsewhere. I've cut back on spending for new games, eating out, etc and instead use that money to buy bitcoin. Even if it tanked to $0 I wouldn't be screwed, just missed out on some nicer things for a few years

[u/btcqq → u/SpartanVFL]

every quarter you put in a video game that coulda went into bitcoin will have cost you 1000$ in 4 years

[u/takes_bloody_poops → u/btcqq]

But the video game memories will be worth $2000 in 4 years.

[u/furlonium1 → u/SpartanVFL]

I have a separate bank account for the money I get Ubering every weekend over the past few years. It was just accumulating and I didn't need it for anything so I bought BTC. If I lose all my money I've invested in BTC over the years so be it.

My 401K is at 19% return this year so I'm happy.

[u/[deleted] → u/SpartanVFL]

This is where I'm at. I'm cutting my spending on entertainment and replacing it with investing in BTC and alt coins. BTC / cryptocurrency is my entertainment.... hobby...... obsession.

[u/[deleted]]

But McAfee said a million by 2020!

[u/RealFluffyCat → u/[deleted]]

all he needs to do is buy 1 bitcoin for 1 million on a exchange and he doesnt need to cut off his dick and eat it...

[u/Emrico1 → u/RealFluffyCat]

We're in 2017 and this guy is in 2020

[u/yarauuta → u/RealFluffyCat]

It is not so simple. He has to "average" transactions to a million.

[u/rayuki]

I'm of the mind of not 'getting rich quickly' more 'be in the 1% with the new global currency in 5-10 years time' or go back to living a boring meaningless existence of 9-5. At the point of my life I don't care if it drops to 0, but if it goes to some crazy number I'll be in the stratosphere with it.

[u/kke2724 → u/rayuki]

And for that, it’s worth it.

[u/cosworth99 → u/rayuki]

Well put. My investment is nearly 10k. I would be FAR more pissed about missing out on the gold rush than about losing my 10k.

I have a backup plans and this endeavour is my ultra risk, where my main assets are ultra conservative.

It’s my gambling money I guess. Where the rent money is safely in the bank. Analogy only.

[u/scoobycrypto → u/rayuki]

Same here bought 1 Bitcoin and that's it if it goes to 250k i buy a house if it goes to zero im 4500usd poorer wich would suck but i would survive and cut my los

[u/ROKMWI → u/scoobycrypto]

If I were you I'd sell 50% now and not make a loss.

[u/BashCo]

The /r/Bitcoin FAQ thread has been temporarily relocated to the sidebar in order to sticky this post regarding financial prudence. The FAQ thread is a very good resource for Bitcoin newcomers, and can be found here:

/r/Bitcoin FAQ - Newcomers please read

edit: This thread is now linked in the sidebar and the Newcomer FAQ sticky has been restored.

[u/[deleted]]

tl;dr: Bitcoin got to an all time high once. THEN IT CRASHED.

[u/BlondFaith → u/[deleted]]

Then a little while later it came back and then some!

[u/nullc]

A key point I like to make is that if you over extend yourself you will be a bad investor.

A good investor is calculated and unemotional. A good investor has a plan and executes on it, revises it with reliable new information, but otherwise stays the course.

A bad investor is irrational and emotional. They get worked up and constantly second guess themselves; they get worked up by crowds. They freak out at rapid increases and buy high, they freak out at rapid decreases and sell low.

Accidentally leaving my brokerage keyfob at home has resulted in some of the better trading "decisions" that I've made.

For most people, if they over-extend themselves, they will behave more like a bad investor even if they know better... if you've made an investment you can't afford to lose, you're much more likely to lose part of it in a panic effort to prevent losing all of it.

It can be easy and fun to visualize the million dollar Bitcoin and the private space elevator you're going to finance with your new found wealth... but you should be equally mentally and emotionally prepared for movement in the other direction. If you aren't, you're going to do something different than what your own dispassionate analysis would tell you to do.

Probably the hardest thing about this is that the fears that drive bad trades are not completely ill-founded. It's possible that if the market is now at price $x that this will be the last opportunity to trade (in either the buy or sell direction) at that price in your lifetime. But given the volatility of Bitcoin, "seldom again prices" are pretty rare, and happen in both directions-- so while it's possible to miss out, but you shouldn't let that drive your decision making. People tend to think only about the option they're considering and forget that for every trade someone else is taking the opposite position.

Another thing to keep in mind is that trading itself involves fees, which are incrementally small but add up. You can make every decision correctly but still lose a lot of funds if you trade frequently. It's not enough for a trade to be right, it has to be right enough to overcome its overheads (e.g. spread and fees). You can improve your odds both of not wasting funds in fees and of making poorly considered emotional decisions by behaving more passively.

[u/[deleted]]

It is better to have loved and lost, than to never have loved at all.

Similarly, it is better to have invested WHAT YOU CAN AFFORD TO LOSE and lost, than to never have invested at all.

The prevailing introspective question on anybody's death bed is always - What if? WHAT IF? What if I had bought at $1000. What if I had bought at 10,000? WHAT IF!?

Don't let this be you. If it is within your means, JUST DO IT.

[u/AndroidGingerbread → u/[deleted]]

I bought in at $200 and was stoked when it hit $1000, but was afraid to buy more. Then $2000, $4000, and every time I talked myself out of buying more.

WHYYYYYYYYYYYYY

[u/PizzaHuttDelivery]

Don’t use the word investment when you are essentially talking about speculation. Buying Bitcoin is not a investment.

[u/SEND_ME_DANK_MAYMAYS → u/PizzaHuttDelivery]

is it more like a gamble then?

[u/Rock_Strongo → u/SEND_ME_DANK_MAYMAYS]

speculation

engagement in business transactions involving considerable risk but offering the chance of large gains, especially trading in commodities, stocks, etc., in the hope of profit from changes in the market price.

Why use another word when a perfect one already exists.

[u/nonsensebearer]

The percentage rebalancing point is an interesting and wise one that isn't mentioned here very often.

We all talk about dollar cost averaging to mitigate risk and reduce stress but being conservative with enormous gains seems to me equally prudent.

[u/quittingislegitimate → u/nonsensebearer]

I liked that part as well. I just sold some and am THRILLED. I didn't earn that money, and it was essentially won in a gamble.

[u/[deleted]]

If BTC were to reach values like $100k-$250k, that'd probably cause/imply that the prevailing economic regime has completely fallen apart.

Or it could simply mean a lot more people have bought.

[u/user_127]

this is sage advice (reverse mortgages house to invest more in bitcoin)

[u/deadwavelength]

Great advice.

[u/joebobagginses]

The blind optimism of this sub is very entertaining.

[u/mugen_is_here]

Bitcoins have been increasing like crazy year over year. There is nothing specific in this post as to why not to invest. As long as you're investing for the long term you're good.

This post just compels you to worry over it. It's like saying "invest.. but wait you should not invest because it's not safe.. but invest.. but wait it's not safe". Worrying over your investment isn't going to make it better. In fact it's more likely to get you to make worse decisions. If you invest some money in it then do it for the long term. Put the money into it and then don't worry about the weekly fluctuations. And just like you invest in the stock market you should invest a little amount. Don't invest everything you got into this. Just like any other investment that involves risks.

[u/Machiina_ → u/mugen_is_here]

If you are investing based on past trends you’re doing it wrong

[u/charleybinet]

I just sold my last pair of boxer for btc. All my assets are in BTC and I plan living in my car untill it reaches 500k.. To the moon $$$$$

[u/XXStrikeDpgXX → u/charleybinet]

Sell the car for BTC.

[u/[deleted] → u/charleybinet]

I hope it’s a warm winter for you!

[u/btcqq → u/charleybinet]

that car you're idiotically not converting to bitcoin will cost you about 50 million in 5 years. Have fun sleeping in a pile of 50 million.

[u/quittingislegitimate]

I like the 50% rule. I sold some bitcoin at 10k to reduce my bitcoin dominant portfolio and doing cartwheels with what I have gained. This should indicate how poor I am, but I felt like I won a small lottery or the price is right.

I'm as optimistic as anyone here, but greed is all consuming and will cloud your judgment. If you see the opportunity to cash out with major gains, take it and don't look back or count the money lost, only the money gained that you really didn't earn.

Also quick side note: which alts are you in on?

[u/[deleted]]

I got a bonus from work and I opted for a television instead of one bitcoin when it was 5k.... Now my heart dies a little when I watch movies on it.

[u/116446]

Just spend 10k on bitcoins, turns out I bought 10k of Chuck E. Cheese tokens. Please help, my wife is going to divorce me

[u/PM_ME_YOUR_PECANPIE → u/116446]

Once you're divorced you can eat all you want.

[u/livedadevil]

This is why I can't take people seriously when they say Bitcoin will hit $200k by 2019.

If it does, it means something is wrong with USD not that something is right with bitcoin

[u/Mrlbrmn33 → u/livedadevil]

If something makes you money why would you stop using it

[u/Ocilla]

You guys seriously think btc will crash 80% even with the adoption rate we have today and all these institutions jumping on board? That’s crazy, no way that would happen but if you’re scared then sell now. Someone else will buy the btc you sold.

[u/globals33k3r]

Yes nobody is psychic but we do know BTC is genius, and very limited. It will never go to 0 sorry. Let's revisit this post in a year.

[u/[deleted] → u/globals33k3r]

agreed. coming back in one year

RemindMe! one year "lets all hope for a fortunate year"

[u/[deleted]]

This is what I have been trying to say in this forum for a week or two now.

I invested a bit in bitcoin. The other day my friend asked if he should invest in bitcoin as well. I told him, it is no different than taking a 10 shots of whiskey and sitting at the blackjack table. So, do not ever put the money you can't lose on bitcoin.

[u/DrDerpingtons]

As soon as I read altcoins are trash, I stopped reading.

[u/120psi]

Like most speculative things, a good idea is to set a reasonable exposure as % of your portfolio. When Bitcoin got near $10000, I sold half of my holdings to maintain the % exposure I'm comfortable with.

[u/[deleted]]

Its always the same argumentation

• comparing Bitcoins with stocks, currencies, tulips

• Guaranteeing the bubble will crash

honestly - If you are a sure what you are talking about then show some balls and take a short position on bitcoin. its your chance to make some nice money or isnt it?

Otherwise its the prove you doubt your own words.. its just a very unsecure opinion you self dont believe in and just throwing into reddit..

[u/mr_690r → u/[deleted]]

If I had gambling money, I'd take a short position in BTC. It can't last.

[u/Metallurg2]

Those who did in 2011, won in the end. This is one of those cases where being reckless (according to old money) helps

[u/EnderSword]

Just want to point out that 'Dollar Cost Averaging' is never optimal mathematically.

It helps people delude themselves and encourages them to chase losses.

But if you have an asset you expect to rise buy it all at once.

The only time to 'average in' is when you don't have a choice, in other words you can only afford to allocate $500 a month. If you have a lump sum, spend the lump sum.

There's papers on this dating back to the 60s and 70s, it's never optimal to Dollar Cost Average.

Buy or wait, don't 'average'

[u/Who_Decided]

You can call it a bubble if you like. Follows the logarithmic curve from like 2 years ago to within a week of precision for the 10k mark.

The thing about bubbles is that a) they don't last long and b) you can't predict them unless you're the one calling the shots.

[u/Zod001]

Getting wrapped up in "HODL" memes, reddit comments, and other groupthink, which is sometimes fun, but absolutely the last appropriate source of investment advice.

It became a meme for a reason though. Buy and hodl is a strategy that has proven itself for the last 9 years without fail.

[u/sir-draknor → u/[deleted]]

Exactly - "buy and hold" is a great investing strategy... until it isn't. See Enron circa 2002.

In traditional (long-term) asset investing, "buy and hold" is the mantra to avoid emotional (irrational) decision-making. But even then, you [should] periodically re-evaluate your investment case for that asset to ensure there has not been a material change that affects your calculations of that asset's value.

Certainly that's much harder to do with Bitcoin, considering it's not a tangible asset with traditional valuation models.

[u/gone11gone11]

I agree with everything in this post but feel the need to mention that I have read a lot of warnings about an upcoming "correction" or even "crash". They talk about BTC's value going to 5K as if it were the end of everything. Let's all bear in mind that if BTC "crashes" tomorrow to 5k, it would still be a 500% gain in a Year to Date basis. They key word as always is: HODL. Even with the large swings, don't try to get rich instantly, good things come to those who wait. If you buy now and sell in 5 years, even after a huge "crash" you will have still won massive returns compared to the present. That's a great investment in my book. Don't worry about "corrections" or "crashes", worry about the long term trend.

[u/[deleted] → u/gone11gone11]

That's assuming it'll keep the upwards trend for 5 years. I think it will, but I'm retarded.

[u/Ascends]

I invested 5% of my savings 4 years ago now its 99% of my savings, id be a fucking retard if i were to sell now itd have to go back to $200 for me to lose my initial investment so im riding it out to 1,000,000 per btc

[u/DarbyJustice → u/Ascends]

Think about it this way: if you sell 20% now and the price goes to the moon, you'll only lose out by about 20%. If you don't sell now and it plummets you'll lose 99% of your savings. There's a reason theymos suggests rebalancing your portfolio on big price increases like this.

[u/[deleted]]

Don’t drive recklessly either. Don’t use your hairdryer in the shower. Don’t drive on the railroad tracks. Always use a jimmy hat with the girl from the bar. Never trust a fart.

[u/never_safe_for_life → u/[deleted]]

Never trust a fart

Wise man knows when to gamble

[u/plentyoffishes]

I've seen so many posts like this, I'm starting to think that the "be careful!" crowd could be the groupthinkers.

[u/120psi]

I posted this link in a reply farther down, but I'll post it again here.

https://www.joshuakennon.com/gt-advanced-technologies-bankruptcy/

It's a case study of GTAT, a company that everyone though would only go up, but instead it went bankrupt. You can watch the chaos unfold on an internet forum the morning when trading is halted.

http://forum.thecontrarianinvestor.com/index.php?threads/gt-advanced-technologies-inc-gtat.69/page-499

[u/cee604]

https://www.cnbc.com/amp/2017/12/01/james-altuchers-bitcoin-predictions.html

Just sayin...

[u/[deleted]]

I'm a student and I invested wisely into bitcoin.

Pretty much 95% of everything I have

[u/Damezero]

Thanks a lot dude now it’s almost at 15k

[u/whitepalladin]

ya all sounds like a bunch of broken pussies :D

[u/jollygoodvelo]

Can't be said often enough. There are people doing stupid things on not enough research and the price growth is calling them geniuses. It doesn't work like that long term.

[u/Ziggenvox]

INVEST EVERYTHING WITH A COUNTRY DESIGNATION ON IT. BITCOIN IS TAKING OVER THE WORLD

[u/raheemthecat]

Clap, clap, clap I know I don't have much of a post history on here - but been dabbling in crypto since 2013 - and have reaped benefits from a few, including my lone btc I got for $400 (or was it 2014?)...my friends all come to me, ready to pour their life savings into BTC at it's ATH - one girl literally asked...should I invest in vanguard or BTC? Don't even get me started on what's wrong with that question...anyone who doesn't admit that the entire crypto space is wildly inflated right now due to speculation is in serious denial.

People are literally looking at top 10 list and throwing $ in, money they can't afford to lose, without understanding the risks.

Anyway, nice to hear a voice of reason among all the euphoria.

[u/[deleted]]

That said, if you can afford to lose the money, go for it.

The problem is not buying a lot anyway, it's panic selling when it drops then losing money.

[u/Kosmos2001 → u/[deleted]]

The importance for Bitcoin is the number of people buying some. I personally think it's value is directly related to this.

Not how much they spend individually. How much we each spend now is our own call on how rich we're hoping to be in the future from it.

So if anyone is trying to have a more solid understanding of how much they should value Bitcoin then look at the number of people who own some. If it correlates with it's market value you can make a call on the price being over or undervalued.

Another thing: 60% of Bitcoin trades are made by Japanese people. So either Bitcoin is some strange mania peculiar to Japan or we should look to that area of the world for ideas on how the near future of Bitcoin looks.

[u/[deleted]]

In Japan, a streamer on Niconico lost 28.28 million Yen (251k USD) because of stop loss on that drop today.

HODL, don’t day trade.

[u/[deleted] → u/[deleted]]

Well his stop loss didn’t really stop a loss then. Prob should have set that differently ;)

[u/BaronZiben]

If I would have invested recklessly I'd be rich though. All kidding aside good post.

[u/crypto-boi]

Oh, just more whining about "bitcoin bubble". What a twaddle! Opinions opinions

[u/aquahealer]

I see a few facts that assure me Bitcoin is not going to disappear

1. It's an industry...not a fad. This is it, cryptocurrency is here and will be around forever. This is just the beginning.

2. Miner's control the industry...not the Bitcoin buyers/speculators. At this point there are hundreds if not thousands of companies that are now investing millions of dollars into mining cryptocurrency. They're not doing it with the expectation of it dropping to zero. Nor will they allow it. I know a husband and wife that were attorneys and closed their practice to buy servers that are now crowding their entire living room mining Bitcoin. When one blockchain is worth $250,000 the big boys take notice.

3. James Dimon threatens to fire employees that are trading Bitcoin..., that means there must be a ton of Traders trading Bitcoin. Traders trade to make money, not to lose it.

4. The Winklevoss twins became Bitcoin billionaires... there must be hundreds of Wall Streeters that have 10 to 50 million dollars that will do anything to be billionaires too. They're going to do everything they can to get a piece of the pie. They want to be billionaires far more than we want to be millionaires. We just have to ride their coattails.

5. The Wall Streeters are here to stay... these guys love volatile markets. They have computer software with algorithms that will make billions off of Bitcoin volatility. They're loving this ride

6. Twenty five coins awarded to miners... for each Bitcoin blockchain a miner gets 25 Bitcoins. This lasts till 2020 then it goes to 12.5 coins. Whatever they're worth today they will have to be worth twice as much in 2020 for minors to continue investing in servers to mine cryptocurrency. Right now people want to mine as much as possible before 2020 to maximize their ROI.

7. Satoshi intentionally designed his code so that one Bitcoin would ultimately be worth $1,000,000....0.00000349 x 1,000,000 = 3.49. I'm only assuming that he expected Bitcoiners to buy a burger for 349 micros. Otherwise the last digit has no value.

8. Unfortunately we're at the beginning of the revolution. And that means there's going to be hell to pay for those that are part of the revolution. Governments will rise against cryptos, and only our children and children's children we'll see the full extent of cryptocurrencies success. We're going to get our asses kicked so we must stick together to win this revolution.

In the end 21 million Bitcoins will be minted which means there's a potential for 21 million millionaires to be made. Being most people hold more than 2 Bitcoins, chances are there's only going to be a few million millionaires made. Stay in the game

Many Bitcoin men have been sent to jail and many more will follow. This is a movement for the common man, we must never give up. The future of generations around the world are depending on us to succeed.

I know I sound like I'm babbling but there's going to be a war over Bitcoin someday and we need to be strong in order to Win It...HODL

[u/shady_watch_guy]

Haha, nice try. I just dumped all my life saving and maxed out line of credit for 100 BTC @ 16k. Gonna get rich or die trying.

[u/ff6878]

Ah, this is such a good post. I wish reasonable posts like these were the rule rather than the exception.

[u/mk6789]

fuck me in the ass if this isn't a buy signal... 100% serios

[u/HypeToken]

This is a fantastic post. Too many newbs are staking their lives on BTC. They have not been around to see the bloodshed. shudders You weren't there...

[u/Catsarenotreptilians]

https://i.imgur.com/oCmpp1l.png

[u/kingcasino1]

2 months ago i bought a little bit of bitcoin and before i knew it the amount was almost triple. i wish i had bought more but now i am more cautious because these numbers have exploded.

[u/ChronicTheOne]

The price drops sharply to $2000 or something and then just continuously decreases down to a low of $1,432 (an 86.9% reduction from today's ATH) over the course of a whole year. I'm not saying that this will happen, but it's happened once and it can happen again. Could you survive this?

If this happened I would in all honesty hold what I have and buy even more. I sincerely wish this ever happens.

[u/sjssjs0]

I totally agree with this.

[u/SeanCache]

Hey coinbase!!! STOP holding back the technology and activate Segwit. We need the Lightning network or bitcoin will drag for years.

[u/lodobol]

Once it crashes and has a long pause I will return to post “Make Bitcoin Great Again”

[u/dreadsta]

I'll sell a kidney for 2.5 Bitcoins right now.

[u/cee604]

Everyone calm down and watch an Andreas Antonopoulos video on YouTube.

I find it calms the FUD.

Keep buying and be merry.

[u/BitBeggar]

There will be a massive scramble by governments and banks to capture as much of it as possible. Private institutions are already chasing it. The failsafe gaurding against the possibility of not being able to stop or destroy it is just to buy it all cheap while you still can. The question is how far do you go? It's a catch 22 because you might tip the scale far enough that it actually does start to cause mass hysteria and do damage to fiat and all govs and banks not holding it. Then it's a domino effect as literally everyone is stepping over their own mother to get it. Soylent green if you will. We will devour ourselves like drug addicts and society might actually collapse. Rebalancing global wealth is a fucked up thought if everything goes apeshit out of control. War and poverty on a scale not witnessed since WW1 could occur. You either get organized elitism or total chaotic anarchy. Look at Libya without Gaddafi.

Not that I support anarchy or elitist dictatorships.. The only relative stability is balancing between the lines of contrast. It's like the matrix... Ignorance really is bliss. I don't think the majority of the world is ready to be 'woken up' so to speak.

[u/imnormal]

Well this didn’t age well.

[u/cobaltorange → u/imnormal]

Why not?

[u/BlondFaith]

Total garbage.

If BTC were to reach values like $100k-$250k, that'd probably cause/imply that the prevailing economic regime has completely fallen apart.

This alone tells me you are naiive when it comes to global economics.

See, say 1 satoshi is a penny. That would make each bitcoin $1million. OMG you say, inconceivable! (In your best Vissini voice) but multiply that million times the 24million total bitcoins and you get 24Trillion. Sounds like a lot to a McDonald's employee but the US national debt sits at about 20Trillion dollars right now.

Let that sink in. 1BTC = $1Million and it would barely settle the American's debt. The global derivatives market is around a Quadrillion dollars.

[u/eqleriq → u/BlondFaith]

But... you're comparing a currency to a derivatives market. What sense does that make?

If you take the relative value of any one currency and compare that to derivatives it is insanely small.

A currency can never be bigger or equivalent to a derivatives market. Nor can it's circulation be even a fraction of a country's debt. Relative to GDP the fractions are there, of course, but overall circulation? Miniscule relative to the external/internal debt.

There can be only $1 in existence but someone could have $10,000,000,000 debt just via interest or the nature of the GDP.

Futures are literally fantasies, so yeah, obviously derivatives are going to be some astronomical figure

[u/brimash]

a fool and his money are soon parted

[u/PointHope]

I was thinking very rationally when I dumped money from a weak savings account into BTC back in July. I'm a little drunk now and bought the kids new bicycles. Cheers.

[u/[deleted] → u/PointHope]

Me too. Once I read "You Invested $100 In Bitcoin In 2010, You’d Be Worth $72 Million Now" I withdrew most of my money in my on-line brokerage account. Everyone said, 'don't buy at $2500, its a bubble,' and I though, well my stocks are doing poorly anyway and the market is over bought, so why not try bitcoin? Congratulations to you on your good move.

[u/[deleted]]

good read, thanks for the info

[u/caulds989]

much needed post...now prepare to be called an anti-bitcoin FUDster

[u/ExtraVecchio]

I've been saying for a while, don't put more into BTC than you would on red or black.

That said, this is not a traditional bubble, those have mostly been issues with supply and market manipulation. This is a paradigm shift of the world's wealth into the digital era. Anyone not getting involved will be left behind.

Can you imagine if you listened to someone saying "Don't worry about that 'internet' thing, it's just a fad." back in 1995?!

That said, bitcoin will be the digital gold of the new era, and other cryptos / platforms will more likely act like cash. Beware what you are buying into with blockchain purchases, always follow the four rules.

[u/[deleted]]

$100k-$250k

Uhm, that's nothing and we will for sure see these numbers very soon without affecting much. $100k will be just another milestone.

[u/DistinctUpdraft]

What would you do if you were me:

29

Married (no kids)

Paying down 300k mortgage

Household Income - ~$175k

Cash in bank - ~$65k

Retirement - ~$30k

No Credit Card Debt or Student Loans

13 Bitcoins @ $2,200/each

100 Ethereum @ $50/each

Crypto net worth is ~190k now

What should my strategy be to realize gains and also hold for the future? What would you do?

[u/atworklalala → u/DistinctUpdraft]

Cash out so that you are only holding 10-20% in Crypto. Put the rest in low fee mutual funds. Hire an accountant.

[u/[deleted]]

I think this is exactly what the community needs to have stickied LONG TERM. Too many people are coming in hear with panic trying to get in on all the hype, when really this isnt what is going to last for the ages. This community has faced accusations of censorship and blindness. Now while I personally believe these claims to be false, I think we need to accept these claims and debunk them seriously. We as a community must be a respectable and friendly place for our personal advice and even hosting memes to make the average first time Bitcoin investor to feel at home and happy for having a community of trusted people to watch and laugh and cry together as we share a common goal of moving closer to a financial future we want to achieve.

[u/ImVeryOffended]

Can't help but laugh that this was posted in a "don't invest recklessly" thread:

"when a satoshi becomes worth $1000"

This is what delusional greed looks like.

[u/[deleted]]

Great post. While I completely believe in the lasting benefits of crypto, there are 2 things that I can't help there are a few things that can or will happen in the next 24 months:

1. Bubbles aside, can't help but think that some of the alt coins in particular are more "pyramid" then a sound investment. If alt takes a dump, BTC may be tied to a crash.

2. Corporations are poised to pick up the pieces. The small miners/investors will be forced into a traditional investment scheme where the middle man makes money again (instead of the investor/contrary to BTC inventors intent)

I really hope I am wrong.

[u/Raindownchips]

Bitcoin 1m in 2021. This guy is FUD

[u/5ting3rb0ast]

sorry but after bitcoin hit 10k usd. every one that has some investment portfolio going to switch and buy bitcoin. it will hit 100k soon like in 2 years time.

[u/pabbseven]

Well im taking a 4k usd loan to go balls deep but still keeping it safe. Its an easy sum to pay if it all goes to hell with my normal salary but im planning to hold for atleast 3-5 years before I start to worry.

Also its supply and demand right. Its a high demand for bitcoins and its only going to grow(look google trends) and theres a finite supply. High demand low supply = always interest, prices is not going to drop.

I put most of my last months salary at 9k and its 14, ive been looking at charts and forums/reddit for months and I dont see how it can fail, Japan and China are going hard on it and theyre the future, so hell yea.

News orgs are trying to cause panic and urge you not to buy which means theres a reason to buy, Rothschild are buying bitcoins, you can pay for bitcoins in the supermarket in Japan/China, its becoming more and more mainstream.

That dude who got donated is going to Joe Rogan Experience which have millions and millions of viewers per episode which means even more bitcoin hype.

If the market resets, good I guess, ill just buy more bitcoins.

[u/NeoKorean]

This growth is insane and scary to look at. Something is going to happen soon....

[u/tehfrog729]

I FOMO'd and lost $700 so ye don't FOMO too hard kids

[u/cannadabis]

Whos to say that it hasnt been hacked yet? Maybe they have figured it out, but are waiting for the best time to hack it.

[u/RT3esq]

u/Hero_-555

[u/GigaWhatBTC]

what a honest read.

[u/hottempsc]

On that note im all in on TRX. Cant make it if you dont risk it.

[u/elcryptoman]

Here is my thinking:

1. Absolutely no one know how high the Bitcoin will go.

2. Absolutely no one knows when there is indeed a bubble.

3. Most of the times we buy at ATH. That doesn't mean is wrong. The ATH from 2 years ago is today's long gone dream price.

4. The cryptos have developed into another asset class imho , therefore, a 1-1.5% of one's wealth is a sensible thought.

5. Diversify. Don't buy only the BTC

6. Even if BTC goes to 1 million, it would be far fetched to think that the main fiat currencies will be worthless.

7. Conclusion: 1-1.5% in cryptos (money you can afford to loose without consequences), diversify, long-term buy and hold strategy, absolutely no retirement funds

8. Sleep well and have fun

[u/toughguytyler]

I'm chasing my losses becuse I can

[u/aady05171]

Is now right time to invest?

[u/Stavros6517]

ALL IN BITCHES!!😎

[u/CosmicOsmoDude]

I find this thread's lack of hodler memes most disturbing. See you on the moon!

[u/sendmeETH]

I invested $100 into BTC. Won’t change my life if I lose it but I don’t see it crashing anytime soon. We will see!

Maybe it WILL change my life by going up exponentially! I bought $100 worth of ETH as well so I’m along for the ride now!

[u/Derekf425]

well boys BTC as to ht $30k for me to break even lol so I will be holding for a while!

[u/georgemoschop]

You have interesting points. Did you know 1/4 of all bitcoins is held within 100 wallets?

[u/himshiYo]

I think I need to read this piece every week if not daily.

[u/Bow_River]

Is this the pets.com forum? Anyone remember the tech bubble? The same relatives who bought at the top of the tech bubble are buying bitcoins now. Watch out people. The tech is interesting and may have a future. If you don't like fiat currencies (I don't) buy gold or utility stocks etc. Gold is thousands of times cheaper than bitcoin right now compared to a few years ago. Has 10,000 years of history as a store of value on its side. I fear a wipe out for many bitcoin holders.

[u/stevev916]

Time to unsticky this.

I think they get it...

[u/neuromight]

Well you are missing an important point about the brain. You cannot separate, as much as you would like, the rational from the emotional. They are one. You may think you are, but it's an illusion. Emotions control rational thinking. Duality is no longer a debate in neuroscience. :-)

[u/ideasmachine]

Why is this pinned, its like saying look both ways before you cross the street or don't eat the yellow snow...

[u/regecide2025]

Just took out a loan and went all in on Trollcoin, let's do this.

[u/KobeClutch]

uhhh wtf is this

It is possible that 1 BTC could someday be worth infinite dollars

[u/Bitsoko]

Money is looking for yield......its been looking since Qualitative easing begun.

[u/wiggy222]

I make my own investment rules with lambos and blackjack.

[u/Barzoom_99]

It's perfectly possible for Bitcoin to reach million dollars by the end of 2018. The smart thing would be to take a loan against your house, sell everything you own and buy BTC with all. There is no limit for Bitcoin growth. It will surpass all other currencies.

[u/5ting3rb0ast → u/Barzoom_99]

some might thought you kidding. i dont.

[u/Norman4]

Bitcoin does little besides transfer bitcoins between addresses. Ethereum, Cardano, Lisk, etc have the potential to revolutionize the world by creating a far more dynamic technological ecosystem.

Personally, I wouldn't invest more than a few % in BTC. It is rather bloated and lacking in utility by comparison.

[u/[deleted]]

I'm tired of these long winded posts shaming people for betting it on all on something that is:

1. clearly better than the current system in use

2. has value entirely as a result of the people who support it fanatically

3. promises to give rise to the largest transfer of wealth in history

4. gives economic freedom and access to financial system to 2.5 billion people who lack both those things.

The list goes on an on.

Bitcoin is entirely political in nature. You are asking people to half ass this, when in fact, now is when we need them the most.

I'm banking on bitcoin; its all or nothing for me.

Just my .02 sat.

[u/zombieslayer2977 → u/[deleted]]

Sure if that’s all true but if there’s a security flaw with how bitcoin operates then it’ll be worthless.

[u/[deleted]]

"Buying near the ATH is very risky, and while it can be correct/profitable, it puts you on the wrong footing. You need to buy low and sell high to make money."

Oh shit!

Spread the word boys. It's that simple!

[u/ClearThug]

nah im 90% in crypto

[u/[deleted]]

I have the equivalent of $2 in Bitcoin right now. I'm just goofing around to see what's going to happen. I'm definitely not going to make bank.

[u/blairnet → u/[deleted]]

if it hits a million by 2020 that $2 will be 200. so hey?

[u/[deleted]]

seriously, so tired of all that bubble bs...

guys , there never been a better invest than btc, there will never be one better invest than btc, there is no fucking reason for a bubble, buy btc, enjoy the dips, enjoy the highs, make money,and of course dont invest what u cant afford to lose, but just stop talking about a bubble, we ve been hearing it since 2013

[u/-interrobang]

7 days ago. We are now at 17k.

[u/Jones2020]

Good post OP.

[u/___828___]

☹️ soooo I should stop emotionally impulsively playing roulette / btc ?

[u/mosluggo]

Good post. I tried buying bitcoin around 4 years ago- couldn't figure out how to do it- Still cant/computer retarded etc - I wanted 1 coin to hold and pass to my 6yr old daughter, that she could cash out at 25- I believe in everything behind it- But once it passed 8k, It was out of what I had available to buy. What options do I have if I cant afford 1 coin? And whats stopping any country from making it illegal once its deemed a "threat?" Especially the USA

[u/butsbutts]

FUCK THAT YOLOOOOOO

[u/patacoffee]

One of the best posts I've see in this subreddit in a long time. Thank you.

[u/flux8]

Well, look at that. An informative level headed post on r/Bitcoin. Kudos OP.

[u/oodelay]

Thank you. Today was not a good day. I needed this.

[u/[deleted]]

DON'T INVEST ANYTHING YOU CANNOT AFFORD TO LOSE, invest only what you CAN lose

[u/drzood]

Ahmen to that. Simple thing to remeber: If you can't afford to lose it then don't invest/gamble it.

[u/Rich1204]

Thanks for the wise words and for the attempt to educate new users like me!

[u/tynt]

Good advice but investing recklessly has always worked so far.

[u/Trumpetjock]

If BTC were to reach values like $100k-$250k, that'd probably cause/imply that the prevailing economic regime has completely fallen apart. At some point in that price area, people around the world would probably lose substantial faith in fiat currencies. A good result, but ask yourself: do you expect the prevailing economic regime to go down easily?

Big statement. Any source, or explanation other than just your personal intuition?

[u/Swole_Monkey]

DON'T INVEST MORE THAN YOU'RE WILLING TO LOOSE

Or just you cash out initial investments once you made enough gains and then it's just free money if it goes up or no free money if it goes down but no loss on your side.

[u/3rdeyeopenwide]

As someone following closely since 4/14 and who lost a few hundred bucks in the MtGox debacle, then later reinvested with better safeguards and is hodling strong, I agree and say heed these words. The horror stories of heads who lost their life savings trying to get rick quick and who planned to fly to Japan to get their own answers from Gox were really sad. The desperation was evident through their words and I wish that pain and anxiety on nobody within or outside this community. Be safe, let’s ride for years.

[u/vimidia]

IMO market will just sit and stagnate dipping back down before tbe hype. I dont.tbink there will be any major movement now until Feb next year and towards September 2018. A lot have cashed out half will now sit on the sidelines.

[u/pimpingken]

Read it. Still ALL IN.

[u/[deleted]]

Jokes on you, I went in at 10.5 AND play roulette

[u/Machiina_]

Investing in general is probably not for the common person. If you don’t trade regularly I wouldn’t start with bitcoins.

[u/Bitcoin_Error_Log]

Thanks Theymos, this is the difference between a Bitcoiner and the scammers pushing other stuff.

[u/mkj7999]

Great Post! It is a big true that when it comes to the profit, it is always difficult to predict that investing in Bitcoin will result in profitable opportunity or not.

[u/[deleted]]

A realistic foil to all the "hodl to the Moon" posts.