I wanted to buy right when it hit $850 a few days ago. I redeemed my $11k mutual fund, but the wire transfer took until Friday to go trough. By the time I was able to buy bitcoins, they were $1111 on coinbase. Bought anyway. Got 9.89BTC.
Just lost $2k of that investment, according to the markets. Though it seems to be recovering somewhat. Ow.
Anyway, I'm long on bitcoin. Maybe it will crash and I'll lose everything. Twice it's crashed, then the recovery has eclipsed the previous peak by several X. So I don't know.
I do know that if banks hasn't been so slow, then I would currently be telling the story of "I was able to grow $11k into $13k." One problem BTC solves is moving money around instantly. It doesn't close for Thanksgiving holiday.
Mtgox needs to become wiser as well. There's currently no trade fees, because they wanted to participate in BTC Black Friday. That kind of thing encourages people who are holding onto $15k coins to sell all of them if they think the market will go down. An extra 0.4% on that much money is significant. Mtgox really shouldn't be so willy nilly.
For the love of god, be sensible - sell half on Monday and put it back into a traditional retirement investment. You'll still do well if BTC goes up. There is no reason to put 100% of your retirement funds into any single asset.
As with most investments, you need to think medium and long term. Barring some kind of final(!) crash, there isn't anywhere to go for BTC but up. Mainstream media and ordinary people are just now starting to talk about it. Stay with your investment, and don't sell before it at least doubled. If it crashes temporarily, that's fine too: chaos is a ladder.
Within reasonable confidence, I'd say: Whatever you do, do not sell at a loss. That's the moment when it becomes a loss. Don't lose your nerve.
Personally, I had a bit over 100 BTC. When it reached $20 the second time, I sold it because I could use the money and also because I became nervous. While it wasn't the biggest money mistake of my life, it's certainly a whopper in retrospect. Don't be like me ;)
By your definition of a "mistake", the biggest mistake you probably made in your life was not buying all the Medifast Inc stock you could get your hands on in 1999. It went up 16,210% in ten years.
But wait, it gets worse. Even just going back a year, if you had bought and sold the right stocks at the right times, you'd be the richest person on earth by far, even if you only started with a few bucks.
But don't worry, you could do the same thing over the next year. You've learned from your "mistakes," right?
In all seriousness, your financial advice is pretty bad and akin to recommending gambling strategies for Roulette. If you both realize you are gambling and are cheering each other on for fun, that's one thing, but I get the sense that you really don't understand that you are in fact gambling.
I have never seen a clearer speculative bubble (as seen from within the midst of the bubble and not hindsight) in my lifetime than this one. You just don't invest for the medium or long term on a speculative bubble. Bitcoins do have some intrinsic value, but as the author of the article we're all commenting on noted, the price of Tulips still hasn't recovered to its 1637 peak.
Really? Is there something a stock or anything accessible by mere mortals that goes up 20+ times it's value every year? :-)
I bought and sold my bitcoins when prices where bellow 100$. Well, given the fact that I doubled the money I should be happy and brag about it, but I'm not. I could be holding 10k now and it hits in the stomach when I'm thinking about it.
On the other hand, I would never invest more than I can afford to lose.
If someone wants an accessible instrument that regularly goes 20x+ times initial risk in a year or even a month! look into the options markets. Remember to always only buy to open your call and put positions and sell before the contract expires if it is in the money.
There are thousand, if not tens of thousands of trades that can get someone that RoR.
I can point towards other instruments that can have that much or more risk to reward ratio. I calculate speculative risk at 100% value + incidental costs of the trade. So if someone said they doubled their investment that would mean a ratio of 1:1 aka a coin flip.
Though if someone did not know that these regulated speculative opportunities are abundantly available, they most likely should stay away.
Well if you knew stock movements like the poster suggested, you could achieve huge returns by playing with options. Like the options on Nokia that went from a few pennies to a dollar or so when MS announced the purchase. Options jump around by a huge lot each week. So it seems that starting from $100, if you knew were things were going each week, you'd make a ton of money. (There's a limit as you get more money - it's uh, hard, to double a billion dollars on a limited set of options in a week, versus only $100.)
Emotionally it does matter. Economically there's no difference between having the $2000 cash and buying 100BTC at $20 versus having 100BTC at $20 and choosing not to sell it.
I would strongly recommend rereading skwirl's post and introspecting on the ways that emotions rather than the hard calculus of the market may be at influence.
I say this as someone who is long on BTC (and purchased right before the last great crash, where it dropped 30x in an instant). I've known the entire time that it's a wild gamble, and having a few coins just in case it becomes absurdly successful sounded fun (it's been very successful for that, watching the highs and lows, talking about it with friends and coworkers, even if it crashed again I've already gotten my money's worth).
There absolutely is. You can't effectively spend bitcoin, except on the exchanges. You can't use bitcoin to buy anything. The only thing you can do is use USD to buy bitcoin and transfer the bitcoin, and have it transferred back into USD by the merchant.
When you exaggerate points like this you undermined the reasonable advice you're trying to give people.
Product and service availability for Bitcoin is very small, indeed, but it's not zero and the point you're trying to make is probably lost on anyone who already knows that you are either exaggerating or confused.
While it wasn't the biggest money mistake of my life, it's certainly a whopper in retrospect. Don't be like me ;)
I have a problem classifying random things like this as a mistake. You didn't have enough information at the time to predict that BTC would exceed $1000, and you don't have enough information now to predict what it will do, either.
It's just a game of musical chairs. The only "mistake" is to play. Some mistakes we pay for, while others ultimately benefit us.
IMHO it would be a huge mistake not to invest a few days worth of income in bitcoins . Most likely you'll loose them, but there's a reasonable chance you'll get 100x back in a few years. I invested $2500 in the summer of 2012 and just last week cached a small part to buy a Citroen C5 saloon.
100x back in a few years? So the market cap will be >1T, and Satoshi will be the richest man (?) on earth? Don't think so. Maybe 10x, and the chance of this is probably not great enough to balance against a crash.
Good call divesting some of your BTC in favor of physical assets.
IMHO China, Saudi Arabia, Japan, Abu-Dhabi, etc. can't be happy with US printing trillions of USD every year. They need a stable currency to keep their enourmous savings in, but the Fed monetary policy is eroding those savings. Bitcoins would be a perfect alternative. If governments start buying them, the total value can easily go > 1T.
Plus are you implying that hackers, like Bill Gates, Larry Page and Satoshi, can't possibly be (or deserve to be) ultra-rich?
If any of those places were unhappy they would stop buying US treasuries. But they keep buying them.
There isn't a "can't be happy" feeling to a market - just what people actually do. At the scales and volumes involved, it is literally impossible for any of those countries to divest themselves of treasuries suddenly (for one thing, bonds don't work that way).
Moreover, governments only invest in real things. The productive output of the US is a real thing because all those places buy tons of US goods and services. Bitcoins are not real things. Perhaps moreover, why would any one of those places invest in a currency at a scale which would simply let them purchase the computing power to take it over permanently?
Which perhaps should highlight why nationstates aren't going to buy it?
Because the money levels being talked about are large enough that you could trivially destroy it. Which means your entire foreign exchange rate is subject to whether someone wants to screw with the blockchain.
Which means at any junction, some third actor can hold the entire currency hostage - unless the governments invest in huge amounts of hashing hardware to protect it. Which is (1) a colossal waste of money and energy and (2) would, in turn, give them the capability to do the exact same thing.
Bitcoin will never be a currency held or traded by governments.
I think the decision to sell what would now be quite a nice Christmas bonus is, as you say and as I said above, a mistake only when viewed in retrospect. Now, however, I do have more information to go on. Yes, it's still a gamble.
The implication is obviously that there won't be a "final(!) crash." This sort of reasoning applies to every penny stock in the market. Am I supposed to read this and then invest in all of them? After all, they will all continuously go up (unless they all go down).
> but there is nothing wrong with stating an opinion based on personal experience.
And that's really all I did.
Regarding investing: telling someone who just bought a shitload of BTC to sell at a loss after some minor and entirely expected market fluctuation is just malicious.
Why? BTC is, for our purposes, infinitely divisible. BTC is just as useful when it is worth $1, as when it is worth $1B. I believe the bitcoin network has value, but 1BTC doesn't hold any more intrinsic value than 0.1BTC. They both leverage the same network.
The argument usually hinges on simple counting: there are only 21 million possible bitcoins, and 21 million is nothing compared to the money supply of other currencies. Therefore, in the end (supposing bitcoin succeeds hugely), the exchange rate must be enormous.
So the difference between 1BTC and 0.1BTC is that there are significantly fewer of the former than the latter.
I don't think you're following the argument at all. A bitcoin is composed of satoshis, and the price is additive. Switching units doesn't actually change the price.
I hope those 11k aren't all your savings. I have coins, am bullish long term, but buying bitcoin is speculation, and bitcoin can fall back to $0.01, even if I don't think it's likely.
It is indeed all my savings. But I was saving it anyway, so I won't be out in a doghouse if it vanishes. I guess I'm dumb, but at this stage in my life I'd rather have 9.89BTC than $11k.
My theory is, everyone's expecting it to crash. So therefore it's more likely to do the opposite. Not much of a theory, but it seems to have been historically true.
If the market is efficient, the collective expectations is what gives the price at a given moment. It is what people are will ing to pay for it and what people are willing to sell for.
>My theory is, everyone's expecting it to crash. //
That's how a crash happens isn't it? It's not driven by any wider economic reality beyond the conviction of "investors". If the investors can be convinced that it's crashing then it crashes. That certainly appears to be how manipulative exploitation of short positions occurs.
That's because short positions are defined by using borrowed money. Not only will they lose money in a crash, they will be bankrupted into unrepayable debt by a crash. So if they think it's crashing, they have to sell before a certain price because they do not have the money to cover their position.
I think your sample is too small. Old-world finance looks at the charts and expects a crash, but everyone who actually holds BTC seems to have a target price of $1M
It scares me that not a word in here has anything to do with wanting to own units of this "currency" for any sort of utility or actual use, but just blind belief that the "value" will continue to go up.
welcome to the roller coaster ride! i was playing the bitcoin market with a small amount of money and had automated orders buying at $90 and selling at $120. It kept accumulating coins fairly consistently for a few months. My "sell everything" order kicked in at $140 but the value just kept rocketing up to $1000!
Even though I made money obviously I'm a bit sad about it. But it just shows that nobody can see into the future. I thought at the time that $140 would be a ridiculous profit.
My advice if you plan to go long is to just resist watching the value because it will drive you crazy and you'll make stupid moves as you try to guess which way the graph is going to go.
Just lost $2k of that investment, according to the markets. Though it seems to be recovering somewhat. Ow.
Anyway, I'm long on bitcoin. Maybe it will crash and I'll lose everything. Twice it's crashed, then the recovery has eclipsed the previous peak by several X. So I don't know.
I do know that if banks hasn't been so slow, then I would currently be telling the story of "I was able to grow $11k into $13k." One problem BTC solves is moving money around instantly. It doesn't close for Thanksgiving holiday.
Mtgox needs to become wiser as well. There's currently no trade fees, because they wanted to participate in BTC Black Friday. That kind of thing encourages people who are holding onto $15k coins to sell all of them if they think the market will go down. An extra 0.4% on that much money is significant. Mtgox really shouldn't be so willy nilly.