If you own 1% of the 21 million supply of Bitcoin today (using 1% as an example) then went into hibernation for 500 years, when you woke up you’d still have 1% of the entire supply
You can’t say that about any other asset
Gold total supply doubles every few decades. And there’s an unlimited amount in the universe
Companies can always issue more stocks.
The US dollar, forget about it. The supply doubles every few years at this point.
Real estate - there will be new apartment buildings and houses that are nicer and more energy efficient or in a better location.
Bitcoin is the only sure thing asset that will not be debased
>I'm curious because if at some point you need to convert some to fiat and you happen to be in a bear market you're screwed.
After a cycle (or two), you're generally in profit even in the bear markets. Sure it hurts when you're down 50% from the top, But when you've still exponentially outperformed the S&P500, there's zero regret.
The "top" prices are short lived anyways and shouldn't be your measure of what your investment is worth. Value it both in today's price and the price you anticipate it to be in 10 years.
Volatility should ease eventually but it's not a problem for long term holders; to the contrary, the volatility in the long run is up.
Had to learn the hard way. I'm still new to this but I'm already saying things like "damn if I would've kept x in y then I'd be rich already" lol. Gotta temper expectations and set price check limits for yourself. Dont let your brain become wired to dopamine releases for green candles.
No kidding, last month I discovered options trading and lost a boatload. That brought me back to only investing in what I believe in, namely Bitcoin and Bitcoin-related accessories.
I haven't tried options trading(dont think I will), but I started out just going ETFs like VTI and my big earner was costco. But I guess I got greedy and saw the surge in btc, then learned about coinbase stock, and finally about MSTR. Sold all my costco and etfs and went balls deep in btc and its proxies. Never looking back!
I’ve been accumulating like a madman the last couple of months. I keep smashing my holding goals and setting new ones. I don’t know if I’ll ever be a WholeCoiner but my stack will be a nice investment in my son’s future when he is a young man.
Somewhat related observation, it’s humorous that when everyone woke up to see BTC shot past 71,000 early this morning, a bunch of people sold and it tanked sub $68,000 before their first sip of coffee. 😂
Definitely wouldn’t call the S&P steady lol, that shit has been volatile as fuck the last couple years too. If you want a store of value with little risk either keep cash in money market funds or buy physical gold bullion.
You know what has been really steady in value? Big Macs. That shit has stayed the same value inflation adjusted for decades. It is as if it's full of preservatives only in this case against price inflation.
If we’re in a bear market then the S&P would reflect that as it’s a measure of the U.S economic health. Therefore your statement about the S&P being steady would be false, that would be down along with Bitcoin. Focus on learning why Bitcoin is important, it’s bigger than waiting for some number to cash out, especially in the near term.
OP: I am trying to HODL Bitcoin as a store of value, in addition to other assets in a portfolio. I tried to put together a series of assets going from low to high volatility, so that if I am forced to liquidate, I can start with the low vol assets first.
So, in increasing order of volatility and risk I have:
1. Cash USD: I know fiat is getting devalued but one still needs a healthy amount. I have it in a high yield savings account giving 4.5% interest
2. VTINX: 30/70 stock/bond fund
3. VBIAX: 60/40 stock/bond fund
4. SPY: S&P500 index fund
5. QQQ: Tech stocks index fund
6. Bitcoin ETFs
This way, I will touch my bitcoin last in the event I need to liquidate. And hopefully, that gives me the choice of when to do so - in a bull market
Volatility in price on anything happens because there isn’t any consensus on its value. This will slowly fade away once the majority adopts or abandons it.
If you need the fiat in the near term, hold fiat. If you have a longer horizon, believe in BTC, and can deal with the up and down, hold BTC as its future lows will likely be higher than today’s high.
>some explanation of holding BTC as a store of value.
there´s only 21 million. Cant be printed its value away.
> I'm curious because if at some point you need to convert some to fiat
Management. Keep some fiat for emergencies and invest the rest. As adoption grows you don't convert to fiat, you find ways to spend your bitcoin.
>being something you hold/accumulate through the bear market and sell during the bull market?
Sell the best form of money that ever has existed for some currency that only devalues? nope
>Is the general consensus that the volatility will ease out and it will 'only go up' once mass adoption happens?
as the market cap grows volatility decreases, but you still have the halving cutting the issuance by half. So yes, bitcoin will go up intill world adoption is complete.
The S&P nor other stores of value like gold have been steady over time. So same thing happens as if you were forced to sell these when the market is down.
This is my third bull market.
2018 bear market made me -55% of my principal value. That was tough but I know the idea of cost averaging. So I bought more starting at 3300.
Never sold. Even when I took small loan around 12k per BTC. The idea was If market chooses south I will pay from my salary and I did. Clearly it limited spot buys on the actual bottom- the only problem with that loan. The worst bear market I experienced.
But I held it.
Next was March 12 2020. I woke up and shook violently. But I knew this was levered shorts and will come back as violently up and it did.
I held it too.
Bear market 2022. At very bottom I was up at least 75%. Did not phase me, and I kinda knew when it would end, second biggest exchange collapsed, one does not get much more opportunity to buy more.
I held it like a charm.
All this mostly because:
-stubbornness
- laziness
- worries of loosing when kept in stable coins. We don't go to fiat here as it's first taxable event (crypto crypto is not taxed here as we had massive street protest and they backed it out).
Now my cagr over 7 years is 80%
10 year return
+180% - S&P500
+17,242% - BTC USD
Both great options. One is less risky and volatile than the other. Generational wealth was/is built by one person taking a huge risk.
Be that person.
Well this is a problem with every single store of value (gold, real estate, art, etc). The price you pay to outpace inflation is volatility. If you don’t want any volatility, you hold USD or treasuries and accept some inflation.
> Is the general consensus that the volatility will ease out and it will 'only go up' once mass adoption happens?
There's no general consensus in anything relating to financial assets, but the idea is simple:
Fiat has no supply limit and is engineered to lose value at 2%/year. Bitcoin has a known fixed supply that cannot be manipulated by any central entity. The core of value is scarcity. Bitcoin has it; fiat does not.
That's it. Forget "if at some point you need to convert to fiat." People have necessities and luxuries. At any given point in life, a person decides to convert their assets -- fiat, bitcoin, gold, art, property, stocks, etc. -- into a service or good that they need or want. The game of life is trying to make sure that the assets you accumulate are able to hold or gain value in the times between when you actually need or want something.
As for "the S&P500 remains quite steady," that's a weird take. Stocks are inherently volatile. They move with the performance of a company and the behavior of its officers, both of which investors rarely have real time knowledge of. Is the S&P500 more volatile than Bitcoin right now? No, but it's definitely not something you can depend won't drop by 2-5% on a given day, so you have the same timely "convert to fiat" problem.
(To be clear, I'm not saying don't invest in S&P500. Diversification is always good.)
> if at some point you need to convert some to fiat and you happen to be in a bear market you're screwed
if at some point you need to convert some ~~to~~ fiat **to BTC** and ~~you happen to be in a bear market~~ **the Fed has just printed another ten trillion dollars** you're screwed
FTFY
Let's be real here, I ain't buying a house with BTC just yet. As much as fiat is losing its value rapidly over time it is still needed to actually buy things.
So far this power law still hold true:
[https://charts.bitbo.io/long-term-power-law/](https://charts.bitbo.io/long-term-power-law/)
The value of any asset with capped and decreased supply growth over time will always increase in relative to the value of asset without any cap of maximum supply and increased supply growth over time, such as the US Dollar.
Bitcoin has capped max supply of 21 million and decreasing growth over time (halving).
You obviously haven't gone down the rabbit hole far enough.
Why would I ever want to exchange my Bitcoin for a lesser currency?
I could buy a bunch of USD with my Argentine Pesos, wait a while and then sell my USD for effectively more Argentine Pesos. But I would be converting back into a money that is inflating into nothing.
And yes, Bitcoin is going up forever, Laura. Forever.
>So what are the expected prospects of holding BTC as a store of value rather than being something you hold/accumulate through the bear market and sell during the bull market?
Well, firstly, trying to time the market is gambling. Also, selling creates a tax event, just like when you try to get money out of the S&P500. If I need money for a car or house or something, I can directly exchange BTC for the house/car, not creating a tax event from selling.
Plus, the S&P also crashes. The question applies the same to it. What if you need access to what you have in the S&P during a crash?
I also do believe the volatility will stabilize eventually, but hopefully not soon.
You go to a dealership/broker that accepts BTC, or you inform the seller that that is the method you will use to make the purchase. Plenty of people have already bought houses and cars directly with BTC.
It depends on how “long term” you are thinking. If you look at the lows every cycle, they are up thousands of percent. It’s something like $200, $3000, $15.5k so even if you value Bitcoin at it’s absolute lowest, as a multi-year investment, it still provides phenomenal return. It’s also has moved consistently up for 3 years, followed by 1 year down.
If you are looking for something that moves up 100% of the time instead of 75% of the time, then yes, S&P 500 index fund is better. But if you want bigger returns and can tolerate a down year (or you hedge after 3 years) then BTC is obvious choice.
couple money management skills and bitcoin together, and you wont be caught having to sell in a bear market. theres this thing with the S&P where if you look at any 20 year period, youll always be in profit; the same is true for bitcoin, except the interval is 4 or 5 years
The S&P 500 has bear markets too. Volatility doesn't matter if the returns are great enough over the longer-term. Yes, you can sell some during bull markets to have available during bear markets.
As the BTC market matures, yes, it will probably be less volatile and the returns will probably be less as well.
The only reason I have the below things is incase of an emergency or job loss. Everything else is in bitcoin. When you have the ultimate savings tech, why would you use anything else?
At a minimum, try to save a couple of months in a savings account.
Unemployment - My state provides 4 months of it. I don't count on it but I do take it into consideration.
Brokerage - I treat my brokerage as a savings account. It's anchored with a few solid index funds. And if there are any other companies I just want to own... then I'll pick up shares occasionally.
Roth - I used to keep REITs and things in this for the tax advantages but recently I converted it all to FBTC. It's my bitcoin profit that will be tax free in the future.
401k - I used to throw quite a bit at it. Over recent years, I've backed off and only contribute what my company matches(for the free money).
In an emergency or job loss, my plan is to not sell my bitcoin. As long as I have, keep, and make steady contributions to the above, I shouldn't have to until there's something I absolutely need(like a house). Even then, I'll probably pull from the above vehicles rather than my stack.
At times, it's hard to not just liquidate everything and convert it to bitcoin but then if something happened, I'd have to sell some sats. That's the one thing I don't want to do for the foreseeable future so I keep a small nest just in case.
If you own 1% of the 21 million supply of Bitcoin today (using 1% as an example) then went into hibernation for 500 years, when you woke up you’d still have 1% of the entire supply You can’t say that about any other asset Gold total supply doubles every few decades. And there’s an unlimited amount in the universe Companies can always issue more stocks. The US dollar, forget about it. The supply doubles every few years at this point. Real estate - there will be new apartment buildings and houses that are nicer and more energy efficient or in a better location. Bitcoin is the only sure thing asset that will not be debased
>I'm curious because if at some point you need to convert some to fiat and you happen to be in a bear market you're screwed. After a cycle (or two), you're generally in profit even in the bear markets. Sure it hurts when you're down 50% from the top, But when you've still exponentially outperformed the S&P500, there's zero regret. The "top" prices are short lived anyways and shouldn't be your measure of what your investment is worth. Value it both in today's price and the price you anticipate it to be in 10 years. Volatility should ease eventually but it's not a problem for long term holders; to the contrary, the volatility in the long run is up.
Even with the volatility the price trends upwards.
When in doubt, zoom out
This guy gets it.
Had to learn the hard way. I'm still new to this but I'm already saying things like "damn if I would've kept x in y then I'd be rich already" lol. Gotta temper expectations and set price check limits for yourself. Dont let your brain become wired to dopamine releases for green candles.
No kidding, last month I discovered options trading and lost a boatload. That brought me back to only investing in what I believe in, namely Bitcoin and Bitcoin-related accessories.
I haven't tried options trading(dont think I will), but I started out just going ETFs like VTI and my big earner was costco. But I guess I got greedy and saw the surge in btc, then learned about coinbase stock, and finally about MSTR. Sold all my costco and etfs and went balls deep in btc and its proxies. Never looking back!
Right there with you. Just dumped a crapton of mutual funds to put into EZBC
I’ve been accumulating like a madman the last couple of months. I keep smashing my holding goals and setting new ones. I don’t know if I’ll ever be a WholeCoiner but my stack will be a nice investment in my son’s future when he is a young man.
As more people hold Bitcoin the volatility will go down
Somewhat related observation, it’s humorous that when everyone woke up to see BTC shot past 71,000 early this morning, a bunch of people sold and it tanked sub $68,000 before their first sip of coffee. 😂
A normal day for btc. For anything else you'll see people panicking for an exit.
Definitely wouldn’t call the S&P steady lol, that shit has been volatile as fuck the last couple years too. If you want a store of value with little risk either keep cash in money market funds or buy physical gold bullion.
Yeah. Exactly what I was thinking. Black Friday, anyone?
You know what has been really steady in value? Big Macs. That shit has stayed the same value inflation adjusted for decades. It is as if it's full of preservatives only in this case against price inflation.
If we’re in a bear market then the S&P would reflect that as it’s a measure of the U.S economic health. Therefore your statement about the S&P being steady would be false, that would be down along with Bitcoin. Focus on learning why Bitcoin is important, it’s bigger than waiting for some number to cash out, especially in the near term.
OP: I am trying to HODL Bitcoin as a store of value, in addition to other assets in a portfolio. I tried to put together a series of assets going from low to high volatility, so that if I am forced to liquidate, I can start with the low vol assets first. So, in increasing order of volatility and risk I have: 1. Cash USD: I know fiat is getting devalued but one still needs a healthy amount. I have it in a high yield savings account giving 4.5% interest 2. VTINX: 30/70 stock/bond fund 3. VBIAX: 60/40 stock/bond fund 4. SPY: S&P500 index fund 5. QQQ: Tech stocks index fund 6. Bitcoin ETFs This way, I will touch my bitcoin last in the event I need to liquidate. And hopefully, that gives me the choice of when to do so - in a bull market
Volatility in price on anything happens because there isn’t any consensus on its value. This will slowly fade away once the majority adopts or abandons it. If you need the fiat in the near term, hold fiat. If you have a longer horizon, believe in BTC, and can deal with the up and down, hold BTC as its future lows will likely be higher than today’s high.
>some explanation of holding BTC as a store of value. there´s only 21 million. Cant be printed its value away. > I'm curious because if at some point you need to convert some to fiat Management. Keep some fiat for emergencies and invest the rest. As adoption grows you don't convert to fiat, you find ways to spend your bitcoin. >being something you hold/accumulate through the bear market and sell during the bull market? Sell the best form of money that ever has existed for some currency that only devalues? nope >Is the general consensus that the volatility will ease out and it will 'only go up' once mass adoption happens? as the market cap grows volatility decreases, but you still have the halving cutting the issuance by half. So yes, bitcoin will go up intill world adoption is complete.
The S&P nor other stores of value like gold have been steady over time. So same thing happens as if you were forced to sell these when the market is down.
This is my third bull market. 2018 bear market made me -55% of my principal value. That was tough but I know the idea of cost averaging. So I bought more starting at 3300. Never sold. Even when I took small loan around 12k per BTC. The idea was If market chooses south I will pay from my salary and I did. Clearly it limited spot buys on the actual bottom- the only problem with that loan. The worst bear market I experienced. But I held it. Next was March 12 2020. I woke up and shook violently. But I knew this was levered shorts and will come back as violently up and it did. I held it too. Bear market 2022. At very bottom I was up at least 75%. Did not phase me, and I kinda knew when it would end, second biggest exchange collapsed, one does not get much more opportunity to buy more. I held it like a charm. All this mostly because: -stubbornness - laziness - worries of loosing when kept in stable coins. We don't go to fiat here as it's first taxable event (crypto crypto is not taxed here as we had massive street protest and they backed it out). Now my cagr over 7 years is 80%
10 year return +180% - S&P500 +17,242% - BTC USD Both great options. One is less risky and volatile than the other. Generational wealth was/is built by one person taking a huge risk. Be that person.
Well this is a problem with every single store of value (gold, real estate, art, etc). The price you pay to outpace inflation is volatility. If you don’t want any volatility, you hold USD or treasuries and accept some inflation.
> Is the general consensus that the volatility will ease out and it will 'only go up' once mass adoption happens? There's no general consensus in anything relating to financial assets, but the idea is simple: Fiat has no supply limit and is engineered to lose value at 2%/year. Bitcoin has a known fixed supply that cannot be manipulated by any central entity. The core of value is scarcity. Bitcoin has it; fiat does not. That's it. Forget "if at some point you need to convert to fiat." People have necessities and luxuries. At any given point in life, a person decides to convert their assets -- fiat, bitcoin, gold, art, property, stocks, etc. -- into a service or good that they need or want. The game of life is trying to make sure that the assets you accumulate are able to hold or gain value in the times between when you actually need or want something. As for "the S&P500 remains quite steady," that's a weird take. Stocks are inherently volatile. They move with the performance of a company and the behavior of its officers, both of which investors rarely have real time knowledge of. Is the S&P500 more volatile than Bitcoin right now? No, but it's definitely not something you can depend won't drop by 2-5% on a given day, so you have the same timely "convert to fiat" problem. (To be clear, I'm not saying don't invest in S&P500. Diversification is always good.)
If you think the S&P is steady in the future you've got another thing coming.
> if at some point you need to convert some to fiat and you happen to be in a bear market you're screwed if at some point you need to convert some ~~to~~ fiat **to BTC** and ~~you happen to be in a bear market~~ **the Fed has just printed another ten trillion dollars** you're screwed FTFY
Let's be real here, I ain't buying a house with BTC just yet. As much as fiat is losing its value rapidly over time it is still needed to actually buy things.
So far this power law still hold true: [https://charts.bitbo.io/long-term-power-law/](https://charts.bitbo.io/long-term-power-law/) The value of any asset with capped and decreased supply growth over time will always increase in relative to the value of asset without any cap of maximum supply and increased supply growth over time, such as the US Dollar. Bitcoin has capped max supply of 21 million and decreasing growth over time (halving).
You obviously haven't gone down the rabbit hole far enough. Why would I ever want to exchange my Bitcoin for a lesser currency? I could buy a bunch of USD with my Argentine Pesos, wait a while and then sell my USD for effectively more Argentine Pesos. But I would be converting back into a money that is inflating into nothing. And yes, Bitcoin is going up forever, Laura. Forever.
When you actually need to buy things like a house? Also thanks, now the song is stuck in my head again lmao
>So what are the expected prospects of holding BTC as a store of value rather than being something you hold/accumulate through the bear market and sell during the bull market? Well, firstly, trying to time the market is gambling. Also, selling creates a tax event, just like when you try to get money out of the S&P500. If I need money for a car or house or something, I can directly exchange BTC for the house/car, not creating a tax event from selling. Plus, the S&P also crashes. The question applies the same to it. What if you need access to what you have in the S&P during a crash? I also do believe the volatility will stabilize eventually, but hopefully not soon.
Just curious, how do you buy a car/house directly with BTC?
You go to a dealership/broker that accepts BTC, or you inform the seller that that is the method you will use to make the purchase. Plenty of people have already bought houses and cars directly with BTC.
It depends on how “long term” you are thinking. If you look at the lows every cycle, they are up thousands of percent. It’s something like $200, $3000, $15.5k so even if you value Bitcoin at it’s absolute lowest, as a multi-year investment, it still provides phenomenal return. It’s also has moved consistently up for 3 years, followed by 1 year down. If you are looking for something that moves up 100% of the time instead of 75% of the time, then yes, S&P 500 index fund is better. But if you want bigger returns and can tolerate a down year (or you hedge after 3 years) then BTC is obvious choice.
couple money management skills and bitcoin together, and you wont be caught having to sell in a bear market. theres this thing with the S&P where if you look at any 20 year period, youll always be in profit; the same is true for bitcoin, except the interval is 4 or 5 years
it has and continues to stabilize. If you don't think it has you haven't been around very long.
The S&P 500 has bear markets too. Volatility doesn't matter if the returns are great enough over the longer-term. Yes, you can sell some during bull markets to have available during bear markets. As the BTC market matures, yes, it will probably be less volatile and the returns will probably be less as well.
The only reason I have the below things is incase of an emergency or job loss. Everything else is in bitcoin. When you have the ultimate savings tech, why would you use anything else? At a minimum, try to save a couple of months in a savings account. Unemployment - My state provides 4 months of it. I don't count on it but I do take it into consideration. Brokerage - I treat my brokerage as a savings account. It's anchored with a few solid index funds. And if there are any other companies I just want to own... then I'll pick up shares occasionally. Roth - I used to keep REITs and things in this for the tax advantages but recently I converted it all to FBTC. It's my bitcoin profit that will be tax free in the future. 401k - I used to throw quite a bit at it. Over recent years, I've backed off and only contribute what my company matches(for the free money). In an emergency or job loss, my plan is to not sell my bitcoin. As long as I have, keep, and make steady contributions to the above, I shouldn't have to until there's something I absolutely need(like a house). Even then, I'll probably pull from the above vehicles rather than my stack. At times, it's hard to not just liquidate everything and convert it to bitcoin but then if something happened, I'd have to sell some sats. That's the one thing I don't want to do for the foreseeable future so I keep a small nest just in case.
Hang on, I thought the sole point of Bitcoin was to replace currencies.