Currently, many investors are pouring their money into Bitcoin completely, but on the one hand, they want to make a quick profit, and on the other hand, they want to avoid risk because they only consider the profitable side of Bitcoin. However, Bitcoin is risky, and when the price of Bitcoin fluctuates, they panic the most. As a result, they take the wrong steps and sell Bitcoin, and later when the price of Bitcoin increases again, they are disappointed because they sold Bitcoin.
Invest in Bitcoin for the long term through the DCA strategy because Bitcoin will increase in value more than we expect in the next two to three years, you can save for your family's basic needs and your own unnecessary expenses and continue investing slowly because you are investing in Bitcoin. You can benefit from investing in Bitcoin in the long term.
I agree with your points that many investors buy Bitcoin without understanding the risks in the hope of quick profits. This tendency is common among new investors. When the market falls, they panic and sell. This is a very natural and recurring human reaction. The DCA strategy is good advice and it is a very effective and good strategy for moderate risk management. It reduces the stress of investing.
However, I think there is a place in your comment that needs to be thought through. What you said,
'in the next two to three years, it will grow more than we expected'. Although this comment is very optimistic, from a real investment perspective, I think it is a prophetic guarantee that should not be given. Because the market does not give any guarantees. Even though Bitcoin has increased many times in the past, none of us know what will happen in the future. Therefore, we should think based on possibilities, not on certainty. 'The price may increase', 'history shows that there is a possibility of growth' sounds more reasonable. Any statement about the future or "prices will go up more than we expect" can be misleading for new investors. We should invest based on probability, not on the certainty that prices will go up.
I think that there are a couple of problems with the statement that you highlighted inearth that might be a bit related to your concerns about making guarantees about bitcoin prices, yet there is also a problem to consider bitcoin on such short timelines, like a trader would think about getting in and out of bitcoin.. and perhaps a guy should not even be overly concerned if bitcoin prices might be up, down or sideways within a 2-3 year timeline, especially if guys might be coming to bitcoin with 4-10 years or longer timelines.
Even the BTC price is not guaranteed to be up 10 years or longer, even though there seems to be a bit of an ongoing and persistent upward BTC price trajectory that seems to be based on bitcoin's underlying characteristics involving scarcity, decentralization, still early adoption phases (that relate to network effects), and other related sound money matters that continues to put upwards price pressures on bitcoin, in spite of potential short term manipulation and/or potential attempts to keep it down by governments, status quo powers that be etc, and sometimes the status quo powers that be might not disclose the various exact natures of their attack attempts..
Guys who are thinking about bitcoin in 2-3 year timelines are not even thinking correctly about bitcoin, and perhaps are not even protecting their own interests, unless they might be considering how they might stack bitcoin as vigorously as they can within the next 2-3 years since they are not sure if they will be able to get bitcoin at these prices, yet we know that sometimes bitcoin still will correct back down, yet we still need to prepare ourselves in case it does not dip back down. Guys who came to bitcoin in early to mid 2017 do not likely regret the bitcoin that they accumulated during that time, and perhaps they continued to accumulate bitcoin through the 2017 peak and the various corrections in 2018, 2019 and 2020. Yet if they emphasized accumulating bitcoin during that time, even though the BTC price ended coming back down to peak 2017 prices in 2022, they still would have had been better off for their stacking and their front loading of their bitcoin.
Let's say that a guy got into bitcoin in the beginning of 2017, and his goal was to stack a whole year of his salary within 4 years (so he figured that he has to stack 25% of his salary for each of the next 4 years). If he had a $40k salary, then that would be $10k per year, which is about $200 per week, so between early 2017 and late 2020, he would have had invested about $42k and he would have had accumulated right around 9.55 BTC. Surely not a bad place to be, even if he decided to stop stacking in early 2021. Right now, if he still had that same 9.55 quantity of BTC, then he could start to sustainably withdraw at a rate of $48k per year forever into the future, and likely able to adjust upwardly at 7% per year to account for the debasement of the dollar and/or the rise in the cost of living.. So there can be ways to focus on the short term in terms of stacking as many sats as possible and/or taking other measures that would be deemed reasonable.
Yep... Another reason that Regardme does not seem to know what he is talking about since he seems to be considering diversification as a way to grow your investment portfolio rather than as a way to attempt to protect it and to preserve its value, which means that you don't need to diversify until you have gotten some level of growth or maybe you have been investing into bitcoin for 4-10 years or longer and even if bitcoin had not grown as you had expected/hoped, you still might need to start to diversify at some point after you had put so much value into one location.
It’s clear and I agree with you about what should be the primary aim of an investor who wants to diversify into other sectors, the primary aim should be directed towards risk reduction and not just a way to grow investments portfolio. And anyone who is diversifying should try to spread his investments across a different sector and not engaging in what’s similar to the investment currently ongoing . By so doing, you’re trying to mitigate or reduce the impact of risk or downturn in any of the category or sector and at the same point enabling a more stable returns over time.
Further more, a newbie into bitcoin investment shouldn’t think of diversifying yet, he or she doesn’t have any business in diversification as the focus should be to consistently accumulate bitcoin and grow his portfolio to a point of over accumulation, perhaps 2-3 cycles of being a Mainstay in bitcoin accumulation.
I am not proclaiming to know at what point diversification starts to make sense, since there are some subjective elements involved in making those kinds of decisions, yet at the same time, I had been suggesting that beginners do not likely need to be thinking about diversification, and they likely could spend several years building their cashflow management and solely focusing on building up their bitcoin investment before diversification might start to make sense.
I think that Regardme had been talking about diversification as if it were a way to invest into a bunch of things simulataneously (such as shitcoins) since he is assuming not to know which one is better or worse.
Yet any of us who have already identified bitcoin as amongst the best, if not the best investment, then why is there a need to diversify. Another thing is that even if we might be a bit hesitant about bitcoin, then we likely need to figure out how to diversify rather than merely diversifying for the sake of it. Some people are still trying to figure out bitcoin's investment thesis and how bitcoin is different from various shitcoins.. so yes. .that is too bad that they are lost in that regard.. yet still it may well be prudent to at least get started with bitcoin first, and then just figure out their position size until they learn more about bitcoin. If they are studying various shticoins while they are studying bitcoin, then they are likely distracted.. and it might be difficult to help them to figure out why bitcoin first and to actually act upon bitcoin first ideas.
You’re absolutely right, sometimes when I hear about diversification here I usually do ask myself why are my diversifying when I’m still in my bitcoin accumulation stages, the question I usually do ask myself now where are my going to diversify that will be better than investing and accumulating Bitcoin which I think it’s quite a bad idea to me right now, And it’s never like if we find ourselves in a situation of maybe you could say that we’ve achieved our goals of whatever over accumulation that we feel that we’ve achieved then some guys here would definitely start thinking about how they could diversify some of there assets, which I still think it doesn’t guarantee success in a long term investment in other ideas of diversification.
I think that one of the greatest justifications of diversification is attempting to preserve the value that we had presumptively grown over a considerable period of time, so we start to diversify in order to not lose value during periods of volatility and/or extended downside price moves.
It becomes more important as bitcoin grows in value, and if you are earning $40k per year, and you have only bitcoin and cash and if you had been
accumulating bitcoin over 5 years by buying $230 per week and you have something like 1.8 BTC, you might start to feel nervous about having so much value in bitcoin if you don't have any value in anything else besides cash (such as in your emergency funds).
To me I don’t think there is any reason to diversify to anything except to continue buying and accumulating my bitcoin and stacking more and more,
Take 30% of your income and imagine that you had been able to buy 30% of your income in bitcoin for the past 4-5 years. If the ONLY thing that you have is bitcoin and cash, you might start to feel nervous about having that much value in bitcoin and cash and nothing else..
I don’t think there is any reason for me to be hesitant in terms of accumulating more instead I will be looking for a possible way of being aggressive, whoever that want to diversify and then thinks that giving shitcoins a try is totally a bad idea to me because even shitcoins depends on Bitcoin to thrive so why do I have to diversify on something that depends on what I have been investing, instead I will
Prefer to get started and continue buying and accumulate bitcoin consistently, which I also think that it will make me look like I don’t have enough trust in Bitcoin to be thinking about diversifying when I’m still in my bitcoin accumulation stages and all this talk of diversification would definitely get me distracted along the line, then I will prefer to focus on stacking up Bitcoin consistently and hodl.
Hopefully we are not talking about diversifying into shitcoins. That makes little sense, even though some folks do those kinds of things.
I am not proclaiming to know at what point diversification starts to make sense, since there are some subjective elements involved in making those kinds of decisions, yet at the same time, I had been suggesting that beginners do not likely need to be thinking about diversification, and they likely could spend several years building their cashflow management and solely focusing on building up their bitcoin investment before diversification might start to make sense.
I think that Regardme had been talking about diversification as if it were a way to invest into a bunch of things simulataneously (such as shitcoins) since he is assuming not to know which one is better or worse.
Yet any of us who have already identified bitcoin as amongst the best, if not the best investment, then why is there a need to diversify. Another thing is that even if we might be a bit hesitant about bitcoin, then we likely need to figure out how to diversify rather than merely diversifying for the sake of it. Some people are still trying to figure out bitcoin's investment thesis and how bitcoin is different from various shitcoins.. so yes. .that is too bad that they are lost in that regard.. yet still it may well be prudent to at least get started with bitcoin first, and then just figure out their position size until they learn more about bitcoin. If they are studying various shticoins while they are studying bitcoin, then they are likely distracted.. and it might be difficult to help them to figure out why bitcoin first and to actually act upon bitcoin first ideas.
Thanks for your correction sir. But I wasn’t really talking about diversification in finance or investment. I meant diverse as a core meaning. What I was trying to say was that new investor should broaden the scope of bitcoin, by understanding it well and stay informed. I wouldn’t advise a new investor, to diversity and spread investments across different assets.
Whatever you are saying is not very clear, since we are talking about bitcoin in this thread... so when we talk about diversification, we are talking about other possible investments or maybe hedging with cash or other fiat, and surely some folks believe that hedging with shitcoins is a good idea..... and if we are talking about beginner investors, then it seems quite problematic to be spreading their capital across various asset classes, perhaps prior to even learning about bitcoin and figuring out their bitcoin stake and even figuring out what kind of cashflow management that they might carry out. Investing and cashflow management is only one part of life, but still, we are talking about investing and cashflow management in this thread, so any other uses of the term diversification would seem to be off topic, which makes it unclear about what you are talking about, even with your attempt to clarify.