Quote from: ginsan on January 31, 2024, 09:11:11 PM

Quote from: JayJuanGee on January 31, 2024, 08:02:37 PM

Many times in this thread we end up talking about diversification to become necessary after your bitcoin holding might become quite large and even several years the size of your annual expenses/income, and so you are correct that there is no reason to diversify within crypto.. since bitcoin is already a leader in the area, which largely means that other crypto (shitcoins) are dependent upon (or correlated to) bitcoin's performance, so there would not be much if any value to diversify into shitcoins. So, generally the concept of diversification would relate towards other sectors that are supposed to be non-correlated, such as equities, properties, bonds, commodities, and/or cash/or cash equivalents (again not referring to shitcoins). One of the problems with poor people getting into various shitcoins likely come from their not having access to other investments, so they might consider shitcoins as their best option, which may or may not excuse such behavior because if they mostly have bitcoin and they build up their wealth to several times their annual income/expenses, then surely at some point they might have enough value to diversify into various kinds of other traditional asset classes to the extent that it might be justifiable to invest in that direction.

Of course it is true as you have said that if they have accumulated more BTC in their portfolio then they can budget the allocation into several points if they want to complete a small collection in their portfolio. But as long as I am here of course we are still too confident to focus all the budget we have only on buying BTC. Because our investment target has not yet reached a greater level of BTC holdings in our portfolio so I still continue to focus on accumulating BTC for some next year.

Don't get me wrong, I am not advocating any kind of early diversification, even though I concede that guys have discretion regarding when and how much they end up diversifying beyond bitcoin and dollars (and/or their local fiat). So even someone who is investing 10% of his annual salary/expenses into BTC, he is still going to take around 10 years before he has invested one years salary/expenses into BTC.

Also, even though we cannot presume exactly where each person is in their bitcoin journey, we still tend to talk quite abit about newbies and getting started because when you are getting started then that is likely where you need to develop the most skills and good practices, and also so many people are not really used to investing, so it does not hurt to continue to aim our discussion towards the most beginner levels while at the same time anticipating that not everyone is in the earliest of the beginner stages of their bitcoin journey, and so there are guys here with all kinds of levels of experiences, but still may need to either hone their basics or prepare themselves for times in which they may well be ready to pass into different stages. Some of the mistakes that newbies and even intermediate investors make tends to be to prematurely start to believe that they are ready to enter into more advanced levels of BTC accumulation or maintenance or even to start to screw around with selling and/or trading BTC before their BTC portfolio sizes are sufficiently built up.

It could be that guys only diversify between bitcoin and cash (or cash equivalents) for many many years and they do not hold any other kinds of investments, and that could well be enough, even though the more and more bitcoin that you get, then the easier it should become to justify considering holding some other kind of assets, yet those are completely discretionary considerations, even though we know that if we start to get a point that we have 3 years of our income in BTC and then maybe we have 12 months in cash, we still are going to start to have problems because we have 3x more value in BTC, and if we reduce our case down to 6 months, then we have 6x more in BTC, and if we reduce our cash to 3 months then we have 12x more in BTC, so we might start to really realize that we are in a very volatile position because let's say our salary/expenses are around $25k per year, and so if we are holding 3 years ($75k) in bitcoin, then maybe our BTC holdings double or maybe it gets cut in half.. so then we might start to feel that we are too overly weighted in bitcoin, which is part of the further justification in regards to making sure that we hold our value in a variety of asset rather just in bitcoin, yet not everyone is going to agree about that.

I am not going to push the issue especially since there are options, including that maybe if some of us end up having 10 years income/expenses in bitcoin (remember 20-30 years is entry-level fuck you status, and some folks might even be able to figure out ways, especially with bitcoin to be able to turn something close to 10 years in bitcoin to be entry-level fuck you status, especially if they are valuing based on bottom prices such as the 200-WMA rather than spot price), so they might get concerned that they have too much value in BTC, even if they might have 6 months to 2 years in cash, but that cash would not be working for them, so maybe they have 3 months in and emergency fund. 3 months in reserves and then they have to figure out ways to invest the other 18 months worth of cash, so maybe they would put it in index funds in the stock market or in bonds or in something that they believe might not move the same as bitcoin so that if bitcoin is going down maybe these other assets are not going down as much and maybe they could be gaining in value when bitcoin is going down.. NOT easy to figure out exactly, but if we have many years investing and building the size of our BTC stash (and the overall size of our wealth) these end up NOT being bad problems to have.

Quote from: ginsan on January 31, 2024, 09:11:11 PM

Some of those who have started buying BTC since 2015 certainly already have large amounts of BTC in their portfolio so it will be easy for them to diversify their budget.

Sure the chances are that the longer that a person has been into BTC, then the more likely that he has been able to accumulate BTC along the way and to be able to profit from the passage of time and keeping some BTC in his holdings; however, we cannot assume that everyone has errored on the side of accumulating BTC because sometimes guys get distracted into accumulating fiat, so they lose their focus, and they misunderstand how much they should be building and accumulating their BTC holdings rather than believing that they are doing well merely because they gain some dollar profits here and there along the way.

Quote from: ginsan on January 31, 2024, 09:11:11 PM

But I doubt they will because the longer we are in btc the more we find a conviction to continue buying btc and forget about shitcoins in the slightest context

Sure, and sometimes when guys make mistakes along the way, they sometimes learn that they need to just start to focus more and begin to stack sats as if they were just starting because sometimes they get worked up about mistakes that they made in the past, and then they try to make up for the mistakes that they made in the past, and while engaging in all that conduct and activism in regards to bitcoin, they might not have developed, built and put good bitcoin accumulation actions into practice.

Quote from: Troytech on Today at 12:10:53 AM

Quote from: JayJuanGee on January 31, 2024, 05:16:05 PM

My suggestion to provide various and diverse frameworks should still be within some frameworks rather than throwing up your hands and saying "anything can happen" because it is not correct that anything can happen with the same kinds of odds... maybe I am quibbling..? but there is a difference between saying anything can happen and saying to prepare for a variety of scenarios.

Okay I seem to understand you more now, just as you originally explained I think we are making this senerios based on what can actually happen like a down trend senerio or up trend senerio which is part of a framework, and not preparing for senerios which would most likely or even not happen and maybe start putting efforts into it.
Because from what I had already been practicing as you taught, I just did a basic plan on how I would approach the market if it started an uptrend like, after the etf approval, the market did a little spike to 49k, I only DCA once at that time and that was my worst case senerio, but in other not to slow down on my accumulation process, I allocated more that my original 10% to it, I did 30% that week so I would match up with my Norma Dca plan, and when we had that dip to 39k I actually started lump summing more than DCA, I did three times that week and still did my DCA but this time 15%, I used a bit money from my reservation for the lump sum and I did a little cutting down expense to meet up with DCA, and then my normal plan would be when the Market is consolidating around a certain price, I would just go with a mix of monthly lump sum and regular weekly DCA, just to balance things up.
This was how I original understood it.
Sir pls if you have any advice to give to me, that could enable me make my plan better would be fine.

It is difficult to give more suggestions than what I already have because you seem to be wanting to time your buys in a way to attempt to get as much bang from them as you can, and sure there is nothing wrong with that, up to a point, but you have to still consider that no matter what you do, you are likely going to still have some cash in your reserves and the price goes up or you run out of cash and the price goes down.

It seems that you also have gone through some of the exercises that we discussed, but really best case, worst case and base case scenarios have short, medium and long term components, and they likely are not very relevant for short term since you probably should mostly be focusing on DCA rather than trying to buy the dip and things like that. .It seems that you do not have enough money coming in on a regular basis to be covering all of the scenarios..so you have to just keep building your various stashes that are going to be combined with BTC, emergency funds, reserves and maybe even maintaining some float so you don't cause yourself to go crazy if you make mistakes and you try to push your BTC buys but then run out of money or fail to plan properly..

One of the solid ways that I can suggest is to create a plan for either 3 or 6 months at a time, but hey, I know that you don't want to do that because you are all excited about the ETFs and about the halvenings, so I cannot really blame you for those kinds of inclinations to front-load rather than budgeting for 3 or for 6 months.

Anyhow, if you budget for 6 months, then you add up all the money that you have available for investing (and maybe you already bought bitcoin with that), an then you have your income coming in which is weekly or twice a month or maybe it is more sporadic than that, but still you have some kind of an idea of your budget, so if you have a weekly allowance in which you are able to buy $100 per week, then whenever the week starts, you can try to figure out the best of the dips during the week, and maybe you buy $33.33 worth of bitcoin each time there is a significant dip, and then by the end of the week, you spend whatever is left, if you have any left, and then the next week you have another $100 in your allowance that you are able to spend, so you can try to buy the dips, but maybe you will get too stressed by that, so what is wrong with just picking a day of the week and then just buy every week on that day?

$100 per week would give you $2,600 invested in 6 months.

If you have $2,400 in your savings, and you decide that you want to spend half of it right away, then you end up buying $1,200 right away, and then maybe the other half you use to buy dips (if there are dips), so then maybe you might set your first dip buy $100 at around $38k, and then every $750 that the BTC price drops then you would end up buying another $100, but that would give you only 12 BTC buy orders, and is that enough for you or not? In my thinking you want BTC buy orders to go slightly below where you think is the most that the BTC price is likely to drop, but maybe you consider that there are no way that you could have 12 buy orders fill.. because that would be buying $100 at each of the price points:

1 = $38,000
2 = $37,250
3 = $36,500
4 = $35,750
5 = $35,000
6 = $34,250
7 = $33,500
8 = $32,750
9 = $32,000
10 = $31,250
11 = $30,500
12 = $29,750

No one knows, so you just try to set your buy orders (increments and amounts) the best that you can (based on your budget and based on your view of not wanting to run out of money to buy but being happy if the BTC price goes up rather than down), and you hope that all of your buy orders don't get filled unless the BTC price spikes down, fills all your orders and then goes back up (I know newbies are not as affected by price drops, but still getting yourself into a mentality of a BTC holder is that you should probably be stacking BTC to such an extent that you are always hoping the BTC price goes up rather than down or sideways).

You don't know.. are your orders going to get filled or not? They should feel like insurance that you don't want to have to use, but you have it in case the drop happens. And maybe the longer that you are in bitcoin the longer you maintain these kinds of buying on the dip ladders while at the same time you are DCA buying on a regular basis, perhaps $100 per week or some other amount that is reasonable based on all of your circumstances that you reassess from time to time.