Quote from: dmwardjr on May 26, 2016, 01:00:43 AM

Quote from: JayJuanGee on May 26, 2016, 12:26:14 AM

There are a couple of ways to lessen concerns about bitcoin volatility:
1) your bitcoin portfolio moves so far into the green that it does not really matter so much to you if BTC prices change by 10 or 20% or even more. Personally, I still believe that these kinds of BTC investors can still profit from BTC trading, but I recognize that it is less of a concern when most if not all of the investment is pure profits.

[2) .......]

It's hard for me to fall into the #1 category. Maybe it's my age (49) and concerns about retirement with a desire to take advantage of as many opportunities as possible. Every little bit over time adds up over time. Especially, if one considers compounding growth. If one always traded in small amounts [5% of their BTC bankroll for example] with the majority of trades being big winners with small losses, their BTC bankroll increases. Which means that 5% of their BTC bankroll on trades is increasing as well.

I kind of made up these two categories, and of course we may have a bit of variation in our thinking in terms of these categories, but initially I was thinking about someone who got a 10x return and then another 10x return (which is 100x) in 2013. Now if that person had a decent stake in the game, such as $100k, then probably that person would not be too concerned about volatility thereafter, so long as he is able to take some capital out. One of the problem with the 10x and then another 10x soon thereafter scenario, is that guys were kicking themselves for not having invested enough early on and then sometimes taking out too much money too soon, but anyhow, there still could be variations in which guys profit considerably enough in order not to worry about volatility. I am similar to you, at least for now, in that I am largely reinvesting almost 100% of my gains because I had never put into bitcoin money that I needed to live upon, and also I have a fairly optimistic outlook regarding upward bitcoin price possibilities. I have gone over some of my probability viewpoints with Fakhoury - but in the end, the summary of the matter is that I am largely reinvesting a lot of my profits until probably the $3k to $5k territory - though I may reneg a bit and take some profits out in around the $2k territory, if we get there, but my strategy in regards to whether I reinvest or diversify will likely be a result of some analysis regarding how fast we get there (if we do) and what seems to have caused us to get there (if we do).

Quote from: dmwardjr on May 26, 2016, 01:00:43 AM

Quote from: JayJuanGee on May 26, 2016, 12:26:14 AM

There are a couple of ways to lessen concerns about bitcoin volatility:
[ 1).........]

2) the market cap of BTC rises to such a degree that manipulation and volatility becomes much more costly to achieve. This is almost so far into the future that we cannot quite imagine it. I personally believe we need at minimum about 100x increase in the market cap, but 1000x would be quite a bit safer in terms of lessening bitcoin's volatility. Yeah, sure I could be wrong, and possibly we could achieve 100x in a couple of years.. though I am thinking 4 years or more would be more likely - if it does occur (I hope to be wrong about my 100x BTC timeline idea, here).

As for your #2 category; I totally agree with you. There will come a time where manipulation will become impossible. Just as hacking the bitcoin network to double spend is not worth it. As for volatility, I believe that will always be there.

Can you Imagine the following:

If bitcoin was 1,000 x the market cap what it is now, that would be approximately 7,000,000,000,000 USD. If we were to say we have 17,000,000 BTC in circulation 4 years from now with a 7 Trillion market cap, this would put each BTC at $411,764 USD.

Do you realize it would be common place to have $2,000 USD swings daily with BTC at that amount? Could you imagine how many people would be on exchanges trading with those kind of swings? I cannot imagine what kind of stress may or may not be involved with those kind of swings. Cheesy

Actually, I was kind of with your hypothesizing, until you got to this $2k daily swings.. and I am thinking that we are seeing the situation a bit differently here.

Let's just say hypothetically that bitcoin is worth about $7trillion market cap in today's dollars (sure there are going to be some other issues with the dollar's valuation.. but anyhow, some of those kinds of dynamics are difficult to know today).. but anyhow, I think that you are getting something wrong in a kind of suggestion about $2k daily price swings.... ... Anyhow, I am kind of typing as I think, here, if each bitcoin is approximately $400k, then yeah, that bitcoin's price could easily fluctuate by $2 or $3k in a day, but we would be dealing in thousandths of a bitcoin, and that value may only change by $2 in a day... so in the end, it seems that we agree that the overall currency is much less volatile and more difficult to manipulate, and yeah if the price goes up 1,000x from today's price, we may have only half or less than half of our current BTC holdings... but that does not mean that we are poor, it just means that we may have chosen to diversify somewhat and for whatever personal reasons.

Quote from: dmwardjr on May 26, 2016, 01:00:43 AM

EDIT: The reason I say BTC will always be volatile; I consider $2,000 USD swings volatile. Yet, the price of BTC is so high, those of us with holdings of BTC in whole numbers and not decimal points will not be as concerned about the volatility. Those with decimal points would be more concerned. Those with decimal points would consider $2,000 USD swings as volatile while those with multiple whole numbers will not view it as very volatile.

I think that you lose me here, too, because less volatile and less manipulatable goes throughout, and I think maybe that either you are thinking about this a bit differently from me, or you are assuming a higher level of volatility.

If you hold 50BTC or something like that, and those BTC are worth $20million.. but maybe as we discussed earlier, the value of your total portfolio may fluctuate by $100k in a day, but the fluctuation of the value of the portfolio of someone holding $20k in BTC may only fluctuate by $100... It's the same volatility as a percentage but may be reasonably manageable for someone who is holding a lower value of BTC, and yeah that's not really taking into account the various ways that a person may chose to diversify, if he thinks that volatility is too risky.