In case for the other investments asset, they will serve as a means for backing us up to have an alternative source of income, and if things does not really works out as expected with them as well, we revert back on our emergency fund and use for any urgent need arising, so having all these in place, we may not be able to consider touching our bitcoin investment as we continue to hold until the market gives the required signal for sell.
I don't see the need for diversification here since you're already investing in Bitcoin. Bitcoin investment will gives you more profits than any other investments you can ever think of, so it is important you concentrate fully on accumulating Bitcoin until you reached your accumulation target and nothing else because that's what's matters. Moreover it is also very wrong to use other assets as backup for emergencies as it doesn't add up. Our Emergency funds should be created alongside our Bitcoin portfolio using our discretional income and should only be Used to Sort out real life emergencies,I believe this is the best way of keeping our holdings untampered during our early accumulation stages. Meanwhile it is also important to hold for a longer period of 10years or more and shouldn't be monitoring the market for a signal to sell at an early stage.
It’s not a bad idea if as a bitcoin investor you decides to diversify into other business or investment sectors not related to bitcoins provided that you have what it takes to do so whereby it will not affect your bitcoin accumulation and holding in such a way that you start selling your bitcoins just to raise the money for your diversification. It is only not wise if as a bitcoin investor, you still choose to diversify into investing in other shitcoins or assets because at this point I don’t think what you’re doing is diversification again, knowing fully well the relationship between bitcoin and other shitcoins. Even most of this shitcoins depends largely on the performance of bitcoins even though most people argue about this, but the truth is that these shitcoins depends largely on the performance of bitcoin . So why chose to diversify into shitcoining as you may end up in a more higher risk instead of trying to manage the risks. The least you can do as a bitcoin investor, if you want to diversify, let it be in a sector different from bitcoin, there are so many areas where you can chose from such as estate and land, stocks, logistics etc. so I don’t think is a bad idea if as a bitcoin investor you chose to diversify into other sectors in order to enhance your risk management and mitigation because if one of the sector performs poorly, you can use the other sector to potentially balance or reduce the losses. In as much as you are diversifying, and also being consistent with your bitcoin accumulation and holdings, then nothing is wrong.
It's not good for you to diversify when you are still in your bitcoin accumulation journey because it will distract you from staying focus and concentrate on how to build and grow your bitcoin investment till you reach your bitcoin target. It's better that you should have reached your bitcoin target before you think of diversifying into other asset since bitcoin generates more profits faster overtime than any other asset currently.
I feel that diversifying of asset should be done on an asset that you know more about so that you don't regret your actions later. Bitcoin is increasing in value overtime and it is good for one to be able to accumulate as much as possible for yourself in future because bitcoin is still in her early stage and there's no need to reduce the funds that you are suppose to put into bitcoin for something else because you are slowing the pace of growing your bitcoin portfolio.
I believe that it is a bad idea to diversify in the beginning of a bitcoin investment, yet there can be value in diversifying after a few years of building a bitcoin portfolio.. maybe after a whole cycle, maybe after investing 0.5 to 1 year worth of expenses, maybe at some other point that is determined by each person.
Diversification tends to be justified to protect an investment and not necessarily to grow the investment.
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It’s not a bad idea if as a bitcoin investor you decides to diversify into other business or investment sectors not related to bitcoins provided that you have what it takes to do so whereby it will not affect your bitcoin accumulation and holding in such a way that you start selling your bitcoins just to raise the money for your diversification. It is only not wise if as a bitcoin investor, you still choose to diversify into investing in other shitcoins or assets because at this point I don’t think what you’re doing is diversification again, knowing fully well the relationship between bitcoin and other shitcoins. Even most of this shitcoins depends largely on the performance of bitcoins even though most people argue about this, but the truth is that these shitcoins depends largely on the performance of bitcoin . So why chose to diversify into shitcoining as you may end up in a more higher risk instead of trying to manage the risks. The least you can do as a bitcoin investor, if you want to diversify, let it be in a sector different from bitcoin, there are so many areas where you can chose from such as estate and land, stocks, logistics etc. so I don’t think is a bad idea if as a bitcoin investor you chose to diversify into other sectors in order to enhance your risk management and mitigation because if one of the sector performs poorly, you can use the other sector to potentially balance or reduce the losses. In as much as you are diversifying, and also being consistent with your bitcoin accumulation and holdings, then nothing is wrong.
It will not be a bad idea for an investor who has good amount of bitcoin in his portfolio and has been accumulating for 10 years or more to decide to diversify his portfolio into other assets that doesn't correlate with bitcoin. However it will be a lame idea for an investor who is barely 2 to 3 yrs in accumulating to begin to talk about diversifying as this will definitely affect his bitcoin investment since the investor is still struggling to build up a good portfolio in bitcoin diversifying may affect and his level of continuous accumulation of bitcoin since he will have to pull funds in other assets. In other to avoid distractions while trying to build a better portfolio in bitcoin we should focus more on accumulating bitcoin persistently and continuously until we have a good stash of it in our portfolio.so before talking about diversification,we should have a good stash of bitcoin in our portfolio and also have being holding for 10yrs longer or more.
Sure. Most guys probably take 10 years or more to get to a point in which they had invested 1 year of their expenses into bitcoin or maybe 1 year of their income into bitcoin. There also might be guys who are able to front load their investment into bitcoin and maybe even invest 1 year of expenses or 1 year of income into bitcoin in less than a whole cycle. Surely some of those guys might have come to bitcoin with already having other investments in other areas, and so even though I am surely not against guys trying to remain focused on bitcoin and or even prioritizing bitcoin, yet they surely might feel some justification to invest into more than just bitcoin and cash, especially if they might have both the amount invested into bitcoin adding up, yet there also may well be some BTC price appreciation that helps to contribute towards decisions to diversify into other assets, which might not even result in selling any bitcoin but instead focusing money at other assets besides bitcoin, such as properties, stocks, bonds, commodities or even businesses. and not even referring to shitcoins, which some guys might want to add shitcoins to their investment portfolio (hopefully no more than 10%, which aslo might be too much).
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It’s not a bad idea if as a bitcoin investor you decides to diversify into other business or investment sectors not related to bitcoins provided that you have what it takes to do so whereby it will not affect your bitcoin accumulation and holding in such a way that you start selling your bitcoins just to raise the money for your diversification. It is only not wise if as a bitcoin investor, you still choose to diversify into investing in other shitcoins or assets because at this point I don’t think what you’re doing is diversification again, knowing fully well the relationship between bitcoin and other shitcoins. Even most of this shitcoins depends largely on the performance of bitcoins even though most people argue about this, but the truth is that these shitcoins depends largely on the performance of bitcoin . So why chose to diversify into shitcoining as you may end up in a more higher risk instead of trying to manage the risks. The least you can do as a bitcoin investor, if you want to diversify, let it be in a sector different from bitcoin, there are so many areas where you can chose from such as estate and land, stocks, logistics etc. so I don’t think is a bad idea if as a bitcoin investor you chose to diversify into other sectors in order to enhance your risk management and mitigation because if one of the sector performs poorly, you can use the other sector to potentially balance or reduce the losses. In as much as you are diversifying, and also being consistent with your bitcoin accumulation and holdings, then nothing is wrong.
It will not be a bad idea for an investor who has good amount of bitcoin in his portfolio and has been accumulating for 10 years or more to decide to diversify his portfolio into other assets that doesn't correlate with bitcoin. However it will be a lame idea for an investor who is barely 2 to 3 yrs in accumulating to begin to talk about diversifying as this will definitely affect his bitcoin investment since the investor is still struggling to build up a good portfolio in bitcoin diversifying may affect and his level of continuous accumulation of bitcoin since he will have to pull funds in other assets. In other to avoid distractions while trying to build a better portfolio in bitcoin we should focus more on accumulating bitcoin persistently and continuously until we have a good stash of it in our portfolio.so before talking about diversification,we should have a good stash of bitcoin in our portfolio and also have being holding for 10yrs longer or more.
I agree with your point to an extent, bitcoin first is an investment, you should be done with one investment before thinking about another, so for bitcoin, you should be able to reach an overaccumulation stage which could take you up to 10 years depending on the strategy your using to build your portfolio, so that by the time you will wish to diversify into any other investment, your bitcoin investment journey wouldn't suffer any setback. Some persons just want to multitask themselves in pursuing different things at the same time instead taking one step at a time, your bitcoin accumulation journey is already a tedious one, as it will require you to be focused on your goal and not self-destruct by diversifying when you haven't reached your set goals.
After 1-2 cycles, a bitcoin investor might start to feel comfortable with 1) the amount that he put into bitcoin 2) the extent to which his investment into bitcoin had appreciated (perhaps) and/or 3) the strength and perhaps even the overbuilding of his back up funds and his cashflow management systems/practices.
It remains difficult to figure out at what point diversification starts to make sense since a guy has to account for
his various personal factors... and surely the size and value of his bitcoin holdings as well as his own personal goals can also be factors.
It is problematic when guys are suggesting that there are bright lines regarding when and if to diversify.. even though implementing diversification from the beginning may well be problematic, especially for brand new investors. Also, considering shitcoins as good diversification is also problematic.
https://bitcointalk.org/index.php?topic=5487753.msg65455294#msg65455294The Link above shows where JJG has made the whole issues of diversifying clear. Since it is not good to start diversify at the beginning of our Bitcoin investment and it is not also really advisable to wait till overaccumulation so what it means is that, there is a level your Bitcoin investment will reach or get to, then you can start diversifying that is if you have the capacity to..., but if you don't have the capacity to... I will advise you continue with Bitcoin investment till the point you feel you are ready and it won't disturb your main investment.
Haven said this, I know people will still want to go about it the other way round and I would not tell them to stop but rather kudos to them.
Of course, I am probably repeating myself, yet there are some guys who diversify for the mere sake of diversifying, yet they may well not know what they are doing, and to them it just seems good to diversify, but they end up losing their focus and their prioritization of bitcoin which also means dilution of time, energy and value into assets/currencies that are likely inferior to bitcoin.
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Even as we desire to accumulate and HODL Bitcoin for a longer time, does not necessarily mean that profit is not a priority, both investors and traders aims at making profit but the only difference is that traders are too quick to take their profit while the investors are not too concerned about making profit in a short period of time, But for a long period of time. The main point am trying to make is that everyone who invest hopes to make profit, and we can not completely removed the main reason for investment which is profit in our discussion.
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Investors are not focused on profits, and likely they presume profits, yet if they are holding an investment for 10-15 years or longer, before they start to sustainably withdraw from it, then sure, they likely are presuming that they would be in profits by the time they are starting to sustainably withdraw from their BTC stash.
And, so if they are withdrawing from their bitcoin stash at a rate of 4% per year or 10% per year or some variation of that, they are likely just using their bitcoin as a form of side income, and the value of their bitcoin stash may well be gaining in value faster than their withdrawal rate, which it part of the reason that their withdrawal systems woudl be considered as being "sustainable" and perhaps able to perform perpetually, whether they are living 20 years longer, 50 years longer or some other period of time that they are withdrawing from the bitcoin at their calculated sustainable rate of withdrawal.
By the way, think about the value of their bitcoin, and maybe instead of having a 50% or 100% appreciation of their bitcoin's value, they might have 3x to 10x or maybe even 50x to 100x or more, and so they are not necessarily considering their exact profit level but instead their bitcoin had compounded on itself and brought their whole BTC holdings to such a value that they could sustainably live off of it or at least to supplement any income that they might have outside of their bitcoin holdings.
It is possible to both assume future profits, while at the same time not taking them for granted, since the bitcoin investment is not guaranteed to go up with the passage of time, since we can have execution risks and also potential problems with the asset itself - and at the same time, many of us recognize and appreciate bitcoin as amongst the best of investments currently available (if not the best investment currently available).