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It’s a lot more understandable when newbie investors are still dwelling on the profit maximization mindset when investing in Bitcoin, but as one advances and becomes more experienced and equipped, it’s important to make a shift in focus from the profit maximization approach to wealth preservation and management approach.
It is likely that each of us will continue to monitor the extent to which our BTC holdings are in profits, yet the extent to which they are in profits should not really be a great motivator when it comes to figuring out where we are at. Are we still accumulating bitcoin or have we passed into a maintenance stage. if we are in a maintenance stage we might well be wanting to preserve our overall bitcoin size, and sure we might buy and sell from time to time, yet whatever we do would not be decreasing our bitcoin stash with any kind of significance. Maybe at some point we might conclude that we are able to live off of our bitcoin or to use our bitcoin to supplement whatever other income that we have, then at that point, we might start to draw from our bitcoin based on price based withdrawals (hopefully in a sustainable way).. and/or time-based sustainable withdrawals.
Historically Bitcoin has continued to have quite a great value appreciation so that once we are at a decently sized stash.. possibly at an overaccumulation level, then likely we can figure out systems to start to withdraw from our bitcoin stash, and our withdrawal rate may well end up being way less than the amount that the bitcoin is gaining in value (even accounting for the debasement of the dollar and other fiat currencies).
Yeah, it’s understandable to monitor how profitable your investment has become, but this shouldn’t be because you wanna take out those profits, but because you wanna use that as an opportunity to assess and evaluate how much progress you’ve made with your investment and how closer you’re getting to your goals.
For me, in my first year in bitcoin from late 2013 to late 2014, I did not really try to figure out if I had enough bitcoin or not. I had a plan to invest for 6 months with a certain level of budget, and then after the first 6 months, I extended that same level of budget for another 6 months, so after 12 months, I started to figure out some assessment of whether I had enough or not.. .and by the end of 2014, I was tentatively thinking that I had enough, but then the BTC price continued to stay down and to go lower, after I had made the assessment that I have enough, so then after my additionally accumulating through much of 2015, I started to calculate that I had more than enough... so surely not everyone is going to come to similar conclusions on similar timelines.. and even my way of calculating value changed along the way, and by the time we got to 2019 or so, I started to calculate the value of my stash using the 200-WMA rather than using spot price, even though surely spot price is always relevant to some extent in terms of the price that any buys or sales will be made...
yet part of my point is that our building of a BTC stash can end up influencing us in regards to the extent to which we have a large enough BTC stash that will inform us whether to continue to accumulate, and if we conclude that we have enough BTC or more than enough, then we will likely go into some kind of a maintenance stage prior to going into sustainable withdrawal stage - even though surely we would never necessarily be precluded from buying and/or selling bitcoin at any of the various stages, even though it seems to me that if we are concluding that we are still in accumulation stages, then we should not be employing any kinds of selling techniques (except sell and replace for the making of purchases/transactions in BTC).
It’s always a pleasure to read through your comments, your journey and knowledge in the bitcoin space births the wisdom you share here.
One with the right knowledge will know that bitcoin investment journey is not a quick scheme stunt, just like someone has said before in this thread it requires patience and consistency. Once you’ve decided to invest in bitcoin with your discretionary income, the next step will be to improve on your accumulation process. I would like to say bitcoin journey is like taking care of a plant, each day you water it, take out to the sun trim it until it becomes a tree.
In the bitcoin journey, you try to increase your accumulation daily, weekly monthly as much as your cash flow can take you until you have enough stash. Because we’re humans we’ll always check on our investments even when we’re planning on long term I see this as normal but to start checking on it in order to sell when you’ve not accumulated much, I see it as a wrong practice something a trader will do (just buy, hold and sell off) making little profits. My Best Advice to a newbie is Buy, hodl, try to accumulate more, keep accumulating and hold till you have enough.