5 ms·

Let's assume you're already invested in Bitcoin and you're sure it's a bubble. What's the best strategy going forward? I've been convinced that it's a bubble si

by gst 9y ago

Let's assume you're already invested in Bitcoin and you're sure it's a bubble. What's the best strategy going forward? I've been convinced that it's a bubble since 2011 or so so if I'd sold everything because of that I'd sold it at a fraction of the current price. On the other hand you don't want to hold it forever, as you assume it's going to crash at some future point. I think slowly selling on the way up is a good strategy. For example everytime it doubles you sell 10% or 20% (depending on the risk you are willing to take). At https://bitcointalk.org/index.php?topic=345065.0 https://bitcointalk.org/index.php?topic=345065.0 there's a better description of this approach and at http://bitcoinsavingsplan.com/ http://bitcoinsavingsplan.com/ there's a calculator to check scenarios with different numbers. Any other better approaches?

NicoJuicy 9y ago
I went out 3 times completely and went in with the starting amount ( 3% of my savings, so not much). The last rebuy was lower, i think the bubble will almost pop ( banks are investing, they will let it drop when they want). I truelly regret people going all-in, once it collapses. They won't get their money out because of time-outs on the exchanges. If I lose the current amount, i won't care and every time it goes to high, so I would care. I just go out. I don't need to stress about it and I don't have FOMO, because I have some. Also, I set/adjust my limit orders every 3-4 days and hope one hits.
- kamaal 9y ago
  >> They won't get their money out because of time-outs on the exchanges. Timeouts and software glitches are hardly the point here. You can't sell it, unless you have a buyer. And you won't have a buyer because every one is trying to sell it. You are forced to hold it, because what else can you do?
hyperpape 9y ago
Rebalancing is the concept you're looking for. https://www.investopedia.com/terms/r/rebalancing.asp https://www.investopedia.com/terms/r/rebalancing.asp As for your strategy, if it really keeps doubling, and you only take out 10-20% per doubling, you'll end up with 90% of your net worth in bitcoin, which seems unreasonable. But that comes down to a question: even if you give it high odds that it will continue to go up, if you're not certain of it, then you should probably want to accept some risk of losing future gains to avoid some risk of losing what you have. If you are certain it will go up...you have bad judgment.
AnimalMuppet 9y ago
I had somewhat the same situation when my employer granted me some stock options, and the stock was going up. Do I sell now and take the money, but miss future gains? Do I wait and get the future gains, if any, but also face the risk of future losses? I decided to try to minimize my future regret. So I sold some, and kept more, and as it kept going up I sold more. There's only one thing I regret: It reached a price that I thought was really sweet at the start of December (I don't remember which year). It was a really tempting price, but I didn't sell because I would pay too much of the gains in taxes. I wanted to wait until next year, when more of the profit would be in a lower tax bracket. Two days after I decided that, the price dropped dramatically.

by gst 9y ago

NicoJuicy 9y ago

I went out 3 times completely and went in with the starting amount ( 3% of my savings, so not much). The last rebuy was lower, i think the bubble will almost pop ( banks are investing, they will let it drop when they want). I truelly regret people going all-in, once it collapses. They won't get their money out because of time-outs on the exchanges. If I lose the current amount, i won't care and every time it goes to high, so I would care. I just go out. I don't need to stress about it and I don't have FOMO, because I have some. Also, I set/adjust my limit orders every 3-4 days and hope one hits.

kamaal 9y ago
>> They won't get their money out because of time-outs on the exchanges. Timeouts and software glitches are hardly the point here. You can't sell it, unless you have a buyer. And you won't have a buyer because every one is trying to sell it. You are forced to hold it, because what else can you do?

hyperpape 9y ago

Rebalancing is the concept you're looking for. https://www.investopedia.com/terms/r/rebalancing.asp https://www.investopedia.com/terms/r/rebalancing.asp As for your strategy, if it really keeps doubling, and you only take out 10-20% per doubling, you'll end up with 90% of your net worth in bitcoin, which seems unreasonable. But that comes down to a question: even if you give it high odds that it will continue to go up, if you're not certain of it, then you should probably want to accept some risk of losing future gains to avoid some risk of losing what you have. If you are certain it will go up...you have bad judgment.

AnimalMuppet 9y ago

I had somewhat the same situation when my employer granted me some stock options, and the stock was going up. Do I sell now and take the money, but miss future gains? Do I wait and get the future gains, if any, but also face the risk of future losses? I decided to try to minimize my future regret. So I sold some, and kept more, and as it kept going up I sold more. There's only one thing I regret: It reached a price that I thought was really sweet at the start of December (I don't remember which year). It was a really tempting price, but I didn't sell because I would pay too much of the gains in taxes. I wanted to wait until next year, when more of the profit would be in a lower tax bracket. Two days after I decided that, the price dropped dramatically.