Another important thing is that the investment is largely risk-free and you should invest the amount that you can afford to lose.
This statement from you is confusing.
Bitcoin is not risk free.
The advise about investing an amount that you "can afford to lose" is advice given to show that the investment (including an investment in bitcoin) could go to zero, so when you invest, you are choosing to invest into bitcoin from extra money that you have, and you are aware that you could lose up to 100% of your investment amount.
Still thinking of what could probably make one's investment in bitcoin to experience 100% loss but let me just see it as an impossible imagination even though no investment is 100% guaranteed but i don't think it is fair enough for someone to invest in bitcoin with the understanding that their investment can turn to zero. What i can just say is that while we are investing in bitcoin, we shouldn't only focus on the positive aspect of it when the price is seemingly increasing in value since there are times when the market will also become bloody so that when we experience such situation it won't cause us some distress.
I would suggest that most risks related to bitcoin, including risks of bitcoin going to zero fall into two categories.
1) execution risks - related to how you hold your BTC and secure them - which would also include third-parties that you might trust.
2) risks related to the asset itself - surely bitcoin is constructed upon open source software and then run by folks all around the world. There could be current bugs in the software or future implementations, which also might relate to various kinds of insider social attacks.
We likely have more control over risks in the first category, and I am not even proclaiming that risks in the second category are meaningfully measurable, but those second category risk surely are not zero.
Some of the flaws (or risks) could bring a bitcoin investment to being unprofitable rather than going to zero.. so there are variations of scenarios to the downside and various scenarios to the upside, so the kinds of scenarios are likely on a sliding scale, especially when referring to the future, even though once the scenario plays out (at various points in time) it becomes absolute.
For example, if am investing into bitcoin, and in February 2020 I try to assess bitcoin, and at that time the BTC price is largely bouncing around in the $9,500 price territories, and I lay out a variety of projected scenarios regarding where I believe bitcoin's prices might be in February 2025, I likely would account for a variety of possible upside scenarios, downside scenarios and even sideways scenarios. I might outline 10 or more scenarios, yet by the time February 2025 comes, ONLY one of the scenarios ended up playing out, and it might have even had been considered a minority scenario, but by the time, the scenario plays out, that played out scenario becomes my new base upon which to measure future scenarios from a more informed position, so in February 2025 I am in a better position to speculate about what might happen in February 2030 as compared to where I was in February 2020.
At the same time, any of us should also be able to recognize/appreciate bitcoin's asymmetric bet to the upside (so we should be attempting to prepare ourselves accordingly, since not all future scenarios are equally plausible), since even if we may well recognize various negative scenarios, we can also recognize that the upside scenarios are quite great that still justify putting value in bitcoin rather than putting such value into other kinds of assets and/or currencies, including that bitcoin may well be the best place to put value on a wide-scale basis (even when accounting for various downside risks) as compared to other options regarding where to put value. Many people will refer to bitcoin as amongst the best (if not the best) risk-adjusted place to put value, which largely means that even accounting for the risks and the uncertainties (which are not zero), bitcoin is still the best place to put value, and at the same time, it is not guaranteed to go up.. Both things can be true at the same time.
Another important thing is that the investment is largely risk-free and you should invest the amount that you can afford to lose.
This statement from you is confusing.
Bitcoin is not risk free.
The advise about investing an amount that you "can afford to lose" is advice given to show that the investment (including an investment in bitcoin) could go to zero, so when you invest, you are choosing to invest into bitcoin from extra money that you have, and you are aware that you could lose up to 100% of your investment amount.
Still thinking of what could probably make one's investment in bitcoin to experience 100% loss but let me just see it as an impossible imagination even though no investment is 100% guaranteed but i don't think it is fair enough for someone to invest in bitcoin with the understanding that their investment can turn to zero. What i can just say is that while we are investing in bitcoin, we shouldn't only focus on the positive aspect of it when the price is seemingly increasing in value since there are times when the market will also become bloody so that when we experience such situation it won't cause us some distress.
They just need to acknowledge the risk of investing of Bitcoin so that they will not take everything easy and think about unrealistic things while on the process of investing then no sudden surprised happen if the market will undergo on correction phase since this is one of the reason why people lose since they get panic on those natural dumping occurrence of the market.
I don't think we should only focus on positive aspect since we also need to acknowledge what possible risk to come along way of our investment so that we can always make better decision to avoid losing our money for unwanted events. Consistency and trusting on the process is important so that we can survive also succeed on those effort we made on Bitcoin. Great years coming ahead and that makes a Hodler as a winner.
I totally agreed with you because focusing on the positive part may affect our decision while investing in bitcoin. I think flexibility is also very important. Sometime not being flexible can make us loss out completely. Just like JayJuanGee said that he had different scenario while expecting the price of bitcoin and at the end it was even the minor scenario that play out for him and he was flexible enough to make the good use of the opportunity.