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A Bitcoin / Cryptocurrency thread & Experiment

edited March 10 in Other Investing
So, I’ve been watching Bitcoin and cryptocurrency news like many have over the last year or two. I’ve been encouraged to invest in it ... when it was in the $1,000-1500 price range. I dismissed the advice and thought it was a fad. I watched it gyrate between 1500 to 20,000 to 50,0000 and back to 35,000 and below.

Each time... I referred to the volatility as a reason to justify avoiding it as an investment.

But in the last 6-8 months, I’ve watched companies like Microstrategy and Tesla and Insurance companies decide to invest ALOT of capital (Billions!) in this digital currency that is currently unregulated. That lack of regulation is what draws investment by the uneducated but it’s also what worries me the most. Elon and Michael et al are saying that parking cash in Bitcoin is smarter than and more appreciative than watching their cash lose value in the bank due to inflation.

That said, it did not stop me from investing a whole $50.00 into Bitcoin. Not Bitcoin Cash but Bitcoin. More on that distinction later.

My chosen platform for this experiment? The PayPal app - where you can buy as little as $1.00 of Bitcoin. It’s likely not as efficient as a platform like eToro or Coinbase. My first $50.00 purchase of Bitcoin was at the beginning of the year. I have DCA into it and as of today- it’s at an all time high. I fully expect it will drop 50% or more in the next 6 months. I’ll provide exact details of my total investment in the near future.

Purpose of this thread? A cryptocurrency experiment. Can I / We use the volatility of Bitcoin and “market timing” and crypto to make money? Of course, the risk is that while I’m experimenting...it becomes a legitimate gold alternative— a better place to park cash as Elon and Michael Saylor are saying. If adoption continues to rise (and it IS)... I may regret not accelerating the investment. The opposite can happen too. It could crash as it has done previously... but can I or We trade in and out and make money? Can you?

Would appreciate replies that include stories or links promoting or detracting from the crypto conversation. I think it’s a worthy subject or topic for the investing community to monitor and evaluate. In full disclosure, I’m highly skeptical of crypto and generally conservative.

YTD... my return is +15% in Bitcoin. I’ll share specific details on total investment in a future post. At the moment, 1 Bitcoin is worth $55,500.00 Thoughts?



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Comments

  • Oh, I missed this thread after replying to another thread about Bitcoin.

    Here is a 13 minute video offering from 2018, one of many "Bitcoin for Dummies".
  • Thanks @catch22 - good contribution
  • You might find this article to be of interest. Ms. Lyn Alden Schwartzer is sharp as a tack.

    Is Bitcoin A Ponzi Scheme? Point By Point Analysis
  • edited March 11
    When you cannot beat them, maybe reasonable to join them/ add small amounts at a time. Don't bet the whole house but just *play money* like going Vegas

    Our bitcoin GBTC holding comprise ~ 0.0005% of portfolio. You may expect loose the whole house on Bitcoin.
  • So many newbies joined the parties
    Maybe bad to the ones that leave the latest/maybe sell soon

    https://www.hellenicshippingnews.com/analysis-wealth-managers-frustrated-over-bitcoin-anxious-for-piece-of-the-action/

  • Why does my mind go blank when I read about “mining Bitcoin”? And that it requires massive amounts of current?
  • Sounds like the radio in my Toyota Tacoma. Might be a loose connection.:)
  • edited March 11
    .
  • edited March 11
    Old_Joe said:

    “Might be a loose connection” ...

    I always wondered about that.:)
  • Interesting articles by Schwartzer.

    What intrigues me is that Satoshi still has 1 million unspent bitcoin in his original wallet that he mined in 2008-09. That's worth $57 billion today! Of course, Satoshi could be an individual or a group of people; nobody knows.

    I'm also intrigued as to the timing of Bitcoin's development and launch - immediately following the crash of 2008-09 as stockmarkets were bottoming. Was this purposefully timed to quietly usher in a new method of financial transacting and accounting? I don't know or have any views, but I've read several theories for and against.
  • This , being from Suze Orman scares me as much as anything else about Bitcoin.
  • No thanks. In the past she invested largely in CDs and have very little equity exposure. Surprise that many people listen to her investment advice.
  • edited March 16
    So I’m still DCA into Bitcoin and because I DCA recently... I’m only up 8 percent YTD... but here’s a story worth reading. “Bitcoin is a fad... knee jerk reaction”

    https://www.coindesk.com/billionaire-investor-howard-marks-warming-to-bitcoin

    https://www.marketwatch.com/story/billionaire-investor-howard-marks-says-his-initial-dismissal-of-bitcoin-was-a-knee-jerk-response-11615923111
  • only 8%, wow
  • edited March 16
    Only 8 percent... on a total of now $750.00 invested in Bitcoin. But I have a whole $1,000 that I’m playing with in Bitcoin. A week or so ago, I was up 15 percent and before that 20 but my entry point was better.

    My experiment is... can I keep investing and selling and using house money to make a huge profit in the volatility of Bitcoin? Hint: There are patterns with how it trades.

    Plus... will it go higher as more Institutional investors (Fidelity?) pile in or more Corporations invest? I would love it if we all benefitted.
  • Hi Jon, What are you using for a purchase vehicle for Bitcoin?
    Only curious, thank you.
  • Howdy folks,

    PayPal will let you buy bitcoin BUT they hold it and you cannot withdraw, buy nor sell it. It's only for purchases you make using PayPal.

    Rono
  • Yes Mr Rono but can you buy weed, get a tattoo or use it to fund your draftkings account?

    Sarcasm yes and yes I believe bitcoin is the ultimate Ponzi

    Best,

    Baseball Fan
  • edited March 17
    my friends are saying Bitcoin hit 220k in late Nov2021?
    Any thoughts?
    probably would get in/buy little more and buckle up

    sell when it reaches 70s levels

    very small/play money
  • edited March 17
    @rono That's incorrect. You can sell crypto on Paypal and receive the funds via check or direct deposit in your account. Their intention is that you use crypto at their merchants. But they do not prevent you from withdrawing. https://www.paypal.com/us/smarthelp/article/FAQ4396

    @catch22 for my experiment- I chose an inefficent vehicle - Paypal.

    Pros:
    It's easy to buy and sell via the app.
    It's easy to direct deposit funds into and out of Paypal.
    No need for a wallet. They are responsible for keeping your wallet and security.

    Cons:
    The spread is too wide.
    Price seems too high on Bitcoin vs. selling price.
    You cannot set limit orders
    The pricing and fees are not as transparent as they should be.
    You don't have your own wallet.
    It takes a little effort to cash out

    Coinbase or eToro are probably the preferred way to buy and sell ... until things like this happen: https://www.marketwatch.com/story/morgan-stanley-set-to-offer-wealthy-clients-access-to-bitcoin-funds-report-11615998321

  • Howdy folks,

    Jon, you're correct. Because of your DCA via paypal, I googled it. It's their wallet and while you can buy it through them, they keep it possession of it. You can sell it to them and take your 'profits'. You can use it to purchase anything that will take paypal. However, you cannot withdraw your bitcoin to a different wallet, You cannot use it outside the paypal world.

    That said, I think, you're making a good sense way to DCA into a holding as a speculation. I have issues with them being the wallet and not me if I wanted to hold it as a core asset holding in my portfolio. For that I want to be the wallet.

    good luck and keep us informed,

    rono who remembers bitcoin at $200.

  • Howdy all,

    Baseballfan. Point taken. That's my issue with paypal. They hold the wallet and you can only use your bitcoin within their system. You can't move it out but can only sell it to them or use it to buy stuff thru them. feh. I want to be the wallet, so I can buy pot.

    take care,

    rono
  • edited March 20
    So I keep waiting for a meaningful drop from 58k. But I’m not up 1:00 - 3:00 AM EST... Hint... that’s a magical time.
  • edited March 22
    A bit of a drop this afternoon/evening - allows for a better entry for another $100.00.

    Almost at $1000.00 (total gambling money) for this. Still seeing pretty impressive growth by DCA. I'm starting to believe I will regret not making it a 10K experiment. We will see.
  • A counter point from Ray Dalio ... https://finance.yahoo.com/news/ray-dalio-on-bitcoin-and-probability-of-ban-130008375.html

    Biggest threat is governments outlawing Bitcoin. That said, much smarter people than I are adding it to their Arsenal. Fidelity is close to adding a crypto ETF. As more institutions and companies embrace crypto... I can’t imagine they haven’t investigated this threat. Bitcoin managed just fine today with the options expiring. So far, I’m still positive with my 1K. Having fun with it. Will post an update when it’s worthwhile.
  • edited March 26
    I would worry about the US or China or Russia starting their own digital currency. What would that do to bitcoin? I was reading something about China already started their own digital currency. I admit I do not understand it at all. What will become the worlds reserve digital currency like the dollar is the worlds reserve currency now. Its value is tied to the dollar i.e. 1 bitcoin is worth xx dollars. Things are crazy now with all the NFT things trading i.e. baseball cards, NBA video clips etc... Why would I buy a video clip that I can go on Youtube and watch anytime I want but they are trading at ridiculous prices. I'll let the next generation play with bitcoin. I don't have the interest/desire to research and understand it. Good luck!
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