A good friend has nearly $1M in BitCoin what do I tell him?

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livesoft
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Re: A good friend has nearly $2M in BitCoin what do I tell him?

Post by livesoft » Thu Dec 07, 2017 3:23 pm

Gotta change the thread title, eh?
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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by Thesaints » Thu Dec 07, 2017 3:26 pm

According to Oanda, the OP's friend now has $1.3M in BTC. Or more precisely, would have $1.3M if he managed to liquidate now, at the Oanda onversion rate.

SrGrumpy
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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by SrGrumpy » Thu Dec 07, 2017 4:00 pm

Can I become his good friend, too?

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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by fatlever » Thu Dec 07, 2017 4:10 pm

OnFire wrote:
Wed Nov 29, 2017 2:39 am
Granted, he “saw the light” nearly 4 years ago, when BTC was $114. He bought $10K worth. I’m thinking it might be time to take some profits. He is a working stiff, but also a business man and a smart one at that. His opinion is that if if it goes to zero, $10K won’t break him, but if he sells, he might regret it, and he’s “letting it ride”.

I told him to get out with his profit when it was $200 a coin. Why is now different than then? What would YOU say to convince him, or should I just keep my mouth shut completely?
So now he has:

https://www.cointimemachine.com/what-if ... 1-29-2017/
You would now have 97.36 BTC which are worth $1,590,052.1 today.

You might call it foolishness but I think it takes incredible belief in Bitcoin to hold it through all this over this period of time. I certainly would not be able to hold that entire amount. He might be downplaying his belief in it so that he doesn't seem like a lunatic. It's unlike someone that is casually speculating for fun not to cash out a sizable sum.

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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by DrGoogle2017 » Thu Dec 07, 2017 4:32 pm

Tell him I envy him.
Last edited by DrGoogle2017 on Thu Dec 07, 2017 8:27 pm, edited 1 time in total.

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Leif
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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by Leif » Thu Dec 07, 2017 4:41 pm

BitCoin is suppose to be an alternate currency, right? If so it is a poor one. Ideally currencies have a stable value. It seems to me it is being primarily used for speculation. Lets see how far the "greater fool" theory runs.
wikipedia wrote:The greater fool theory states that the price of an object is determined not by its intrinsic value, but rather by irrational beliefs and expectations of market participants. A price can be justified by a rational buyer under the belief that another party is willing to pay an even higher price.
Investors should diversify across many asset-classes so that whatever happens, we will not have all our investments in underperforming asset classes and thereby fail to meet our goals-Taylor Larimore

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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by NotWhoYouThink » Thu Dec 07, 2017 4:44 pm

NotWhoYouThink wrote:
Wed Nov 29, 2017 8:55 am
Tell him he can pick up the check for lunch.
Changing my response. Make it dinner.

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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by Jags4186 » Thu Dec 07, 2017 4:47 pm

$1.6 million is life changing money to almost anyone. Your friend has hit the lottery and should cash out. This is like that deal or no deal show where you have a guaranteed payout but you keep holding out for more eventually losing it all.

Unless this money has no utility for him I can’t imagine continuing to hold on.

wrongfunds
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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by wrongfunds » Thu Dec 07, 2017 5:11 pm

all he has to do is to wait for another month and then it will be worth $3.2M Under the circumstances, why should he sell now if he did not sell before?

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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by chevca » Thu Dec 07, 2017 5:55 pm

So far, so good for the friend's let it ride strategy, I guess.

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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by wrongfunds » Thu Dec 07, 2017 7:21 pm

The thing is almost any rational person would have cashed out at least some portion a long long time ago. Since he reached this far, he is obviously does not belong in that category.

I do wonder if he is monitoring it every single second or is he of the type who does not even look at it at all. There can be nothing in between.

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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by technovelist » Thu Dec 07, 2017 7:43 pm

wrongfunds wrote:
Thu Dec 07, 2017 5:11 pm
all he has to do is to wait for another month and then it will be worth $3.2M Under the circumstances, why should he sell now if he did not sell before?
In that case he is being way too conservative. He should use leverage to increase his return! :moneybag
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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by White Coat Investor » Thu Dec 07, 2017 8:09 pm

technovelist wrote:
Thu Nov 30, 2017 9:29 pm
Chuck wrote:
Thu Nov 30, 2017 12:41 pm
The reason I don't feel bad for "missing" the Bitcoin boom is that if I bought or mined Bitcoin for pennies "back in the day," there is a 0% chance I would be holding it now.

When it got up to $10, I would have sold half. When it got up to $100, I would have sold half... and again and again and again making it virtually impossible that I would ever gained a million dollars.

This guy did something really impressive that I wouldn't have had the willpower to do. Not taking it off the table is how he's won. As to the question of "now what?" It's anyone guess.
I ran that scenario in my head earlier today, and that's how I would have acted.

Which is why I'm not upset about missing out. How do you know when to cash in?
When it has gone up 100% this week and it's being featured on CNN's front page every day, it's time to cash in. I mean, do you think it's going to go up 100% next week too?
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movingabroad
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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by movingabroad » Thu Dec 07, 2017 8:16 pm

The REAL effects of scarcity and supply and demand haven't even kicked in yet. This is the one opportunity where people have had the chance to get in before wall street. IPO's aren't available to small investors. Wall Street isn't even here yet. But the herd is coming... ETFs will most likely be available in 2018 as well. This is gonna go way higher, although there will be many corrections along the way.

Also, you guys need to quit calling it tulips. Tulips crashed 1 time and never returned to anywhere near their previous high. Bitcoin has crashed over 50% like 6 or 7 times, even 80% one time, and it continuously goes back to new all time highs.

I watched someone buy 12million at 17,700 on GDAX today in a matter of 3 seconds. This is real money. This is not just small time investors.

HODL baby.

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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by technovelist » Thu Dec 07, 2017 8:21 pm

movingabroad wrote:
Thu Dec 07, 2017 8:16 pm
The REAL effects of scarcity and supply and demand haven't even kicked in yet. This is the one opportunity where people have had the chance to get in before wall street. IPO's aren't available to small investors. Wall Street isn't even here yet. But the herd is coming... ETFs will most likely be available in 2018 as well. This is gonna go way higher, although there will be many corrections along the way.

Also, you guys need to quit calling it tulips. Tulips crashed 1 time and never returned to anywhere near their previous high. Bitcoin has crashed over 50% like 6 or 7 times, even 80% one time, and it continuously goes back to new all time highs.

I watched someone buy 12million at 17,700 on GDAX today in a matter of 3 seconds. This is real money. This is not just small time investors.

HODL baby.
Anything is possible.

But some things are very unlikely.

I will say that this time really is different in one way.

It is the fastest and the largest bubble in history.

The collapse will be equally epic.
In theory, theory and practice are identical. In practice, they often differ.

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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by aqan » Thu Dec 07, 2017 8:26 pm

The word is that a bunch of crooked men (or women) propping up the price and will short it like hell as soon the futures trading begins

movingabroad
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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by movingabroad » Thu Dec 07, 2017 8:28 pm

http://www.zerohedge.com/news/2017-12-0 ... egulator-r

”Thomas Peterffy, a pioneer of electronic trading and head of Interactive Brokers, has warned that the introduction of bitcoin futures into a clearing house could increase systemic risk. On Wednesday Interactive said its clients would be unable to short the bitcoin futures market because of the extreme volatility of bitcoin.

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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by movingabroad » Thu Dec 07, 2017 8:29 pm

Also JPM and other banks are currently buying BTC for their clients. HOw can they short it? I'm sure that would be illegal. Also they're gonna have all eyes on this for market manipulation.
Last edited by movingabroad on Thu Dec 07, 2017 8:30 pm, edited 1 time in total.

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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by movingabroad » Thu Dec 07, 2017 8:30 pm

Bitcoin will be scaling within the next year. Instant micro transactions with basically no cost.

https://www.coindesk.com/lightning-last ... ign=buffer

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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by jadd806 » Thu Dec 07, 2017 8:33 pm

movingabroad wrote:
Thu Dec 07, 2017 8:16 pm
The REAL effects of scarcity and supply and demand haven't even kicked in yet. This is the one opportunity where people have had the chance to get in before wall street. IPO's aren't available to small investors. Wall Street isn't even here yet. But the herd is coming... ETFs will most likely be available in 2018 as well. This is gonna go way higher, although there will be many corrections along the way.
What if Wall Street is already here, and they're just waiting for the futures so they can cash out?
movingabroad wrote:
Thu Dec 07, 2017 8:16 pm
This is real money.
You do realize money is literally being printed in the form of Tether (USDT), likely not backed by USD as they claim it is, and being used to inflate the price of Bitcoin in collusion with the largest exchange?

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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by jadd806 » Thu Dec 07, 2017 8:34 pm

movingabroad wrote:
Thu Dec 07, 2017 8:30 pm
Bitcoin will be scaling within the next year. Instant micro transactions with basically no cost.

https://www.coindesk.com/lightning-last ... ign=buffer
Lol. Here comes another fork when half the Bitcoin community decides they don't like this.

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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by Traveler » Thu Dec 07, 2017 8:39 pm

I would take the ~$1.5M and retire

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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by cherijoh » Thu Dec 07, 2017 8:49 pm

Bfwolf wrote:
Wed Nov 29, 2017 3:24 am
I doubt you're going to convince him, and it may just annoy him since it's unsolicited.

His perspective is off though. He doesn't have 10K in Bitcoin anymore. He has $1M. Every day, he is making the decision of whether he wants to have $1M (or whatever the current valuation is) invested in Bitcoin. Ask him: if he had $1M more in cash than he has right now, and nothing in Bitcoin, would he buy $1M in bitcoin? If the answer is no, then he's making the wrong decision by staying fully invested (yes there are some tax implications to selling).

You can also ask him what his end game here is. At what price WOULD he sell?

It's crazy for a working stiff to have $1M invested in this crypto-currency. He could sell $250K of it now and another $250K on Jan 1 (to spread the tax burden) and still hold $500K of the stuff going forward. Is $500K not letting it ride enough???
+1

This is Behavioral Economics 101 - similar to the typical example of someone having a run of luck in a Las Vegas casino and letting a bet ride. OP's friend is mentally accounting for his bit coin as a $10K investment just like the gambler is mentally anchoring on his initial bet.

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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by chevca » Thu Dec 07, 2017 9:16 pm

I admittedly don't know much at all about Bitcoin, nor do I really want to. So, please no links or suggestions to search. But can I ask a simple question and get a hopefully simple answer. Who is in charge of all this?

The OP's friend, let's say, wants to cash out for $1M or $1.5M and says I'm out give me my money. Who pays him? There was a post in this one or one of the other Bitcoin threads about someone going in with $12M. Who are they trusting with their $12M?

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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by Chuck » Thu Dec 07, 2017 9:18 pm

There are numerous exchanges that buy and sell bitcoin for dollars and other currencies.

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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by technovelist » Thu Dec 07, 2017 9:18 pm

chevca wrote:
Thu Dec 07, 2017 9:16 pm
I admittedly don't know much at all about Bitcoin, nor do I really want to. So, please no links or suggestions to search. But can I ask a simple question and get a hopefully simple answer. Who is in charge of all this?

The OP's friend, let's say, wants to cash out for $1M or $1.5M and says I'm out give me my money. Who pays him? There was a post in this one or one of the other Bitcoin threads about someone going in with $12M. Who are they trusting with their $12M?
To cash out, you have to sell it to someone else.

Okay, theoretically you could spend it to buy things from vendors who take it, but that's not realistic with millions of dollars.
In theory, theory and practice are identical. In practice, they often differ.

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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by chevca » Thu Dec 07, 2017 9:22 pm

Ah, so the friend would have to sell to many buyers to cash out... or, get lucky and come across someone wanting to put $12M into this? There's not one place, institution, or whatever holding millions or billions of dollars?

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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by bligh » Thu Dec 07, 2017 9:25 pm

White Coat Investor wrote:
Thu Dec 07, 2017 8:09 pm
technovelist wrote:
Thu Nov 30, 2017 9:29 pm
Chuck wrote:
Thu Nov 30, 2017 12:41 pm
The reason I don't feel bad for "missing" the Bitcoin boom is that if I bought or mined Bitcoin for pennies "back in the day," there is a 0% chance I would be holding it now.

When it got up to $10, I would have sold half. When it got up to $100, I would have sold half... and again and again and again making it virtually impossible that I would ever gained a million dollars.

This guy did something really impressive that I wouldn't have had the willpower to do. Not taking it off the table is how he's won. As to the question of "now what?" It's anyone guess.
I ran that scenario in my head earlier today, and that's how I would have acted.

Which is why I'm not upset about missing out. How do you know when to cash in?
When it has gone up 100% this week and it's being featured on CNN's front page every day, it's time to cash in. I mean, do you think it's going to go up 100% next week too?
It's possible. It wouldn't surprise me. Not anymore.

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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by bligh » Thu Dec 07, 2017 9:28 pm

Leif wrote:
Thu Dec 07, 2017 4:41 pm
BitCoin is suppose to be an alternate currency, right? If so it is a poor one. Ideally currencies have a stable value. It seems to me it is being primarily used for speculation. Lets see how far the "greater fool" theory runs.
wikipedia wrote:The greater fool theory states that the price of an object is determined not by its intrinsic value, but rather by irrational beliefs and expectations of market participants. A price can be justified by a rational buyer under the belief that another party is willing to pay an even higher price.
Agreed. But markets can stay irrational for a long long time.

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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by technovelist » Thu Dec 07, 2017 9:28 pm

chevca wrote:
Thu Dec 07, 2017 9:22 pm
Ah, so the friend would have to sell to many buyers to cash out... or, get lucky and come across someone wanting to put $12M into this? There's not one place, institution, or whatever holding millions or billions of dollars?
Right now he wouldn't have any trouble finding someone who wanted to buy $12 million worth.

The operative phrase being "right now". :mrgreen:
In theory, theory and practice are identical. In practice, they often differ.

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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by technovelist » Thu Dec 07, 2017 9:29 pm

bligh wrote:
Thu Dec 07, 2017 9:28 pm
Leif wrote:
Thu Dec 07, 2017 4:41 pm
BitCoin is suppose to be an alternate currency, right? If so it is a poor one. Ideally currencies have a stable value. It seems to me it is being primarily used for speculation. Lets see how far the "greater fool" theory runs.
wikipedia wrote:The greater fool theory states that the price of an object is determined not by its intrinsic value, but rather by irrational beliefs and expectations of market participants. A price can be justified by a rational buyer under the belief that another party is willing to pay an even higher price.
Agreed. But markets can stay irrational for a long long time.
True. But bubbles generally don't last very long, especially after they get to the vertical ascent phase.
In theory, theory and practice are identical. In practice, they often differ.

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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by TheTimeLord » Thu Dec 07, 2017 9:30 pm

technovelist wrote:
Thu Dec 07, 2017 9:28 pm
chevca wrote:
Thu Dec 07, 2017 9:22 pm
Ah, so the friend would have to sell to many buyers to cash out... or, get lucky and come across someone wanting to put $12M into this? There's not one place, institution, or whatever holding millions or billions of dollars?
Right now he wouldn't have any trouble finding someone who wanted to buy $12 million worth.

The operative phrase being "right now". :mrgreen:
Just saw a story about Bulgaria sitting on $3 Billion in the coin.
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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by bligh » Thu Dec 07, 2017 9:52 pm

technovelist wrote:
Thu Dec 07, 2017 9:29 pm
bligh wrote:
Thu Dec 07, 2017 9:28 pm
Leif wrote:
Thu Dec 07, 2017 4:41 pm
BitCoin is suppose to be an alternate currency, right? If so it is a poor one. Ideally currencies have a stable value. It seems to me it is being primarily used for speculation. Lets see how far the "greater fool" theory runs.
wikipedia wrote:The greater fool theory states that the price of an object is determined not by its intrinsic value, but rather by irrational beliefs and expectations of market participants. A price can be justified by a rational buyer under the belief that another party is willing to pay an even higher price.
Agreed. But markets can stay irrational for a long long time.
True. But bubbles generally don't last very long, especially after they get to the vertical ascent phase.
The problem right now is, how do you even put a value to these things?
Is $100 too much? Why?
Is $10,000 too much? Why?
Is $1,000,000 too much? Why?

To me personally, bitcoin are worthless. Sure the blockchain is cool, and people in tech will probably figure out how to use it to build some cool stuff on top of it. An immutable, distributed ledger that hogs electricity. Great. Life changing stuff.

Under non bubble circumstances, who would find bitcoin actually worth something?

Don't tell me it's a replacement for fiat currencies, because Bitcoin would itself be a fiat currency (if it was a currency) with super high transaction costs and only a random group of miners and developers in charge. Let's see.. I would love it if I was engaging in criminal activity or money laundering. I would use it to transfer out my wealth if I was living under an oppressive regime, or under social, civil or military threat. Or if I was just someone who wanted to stuff some of my money under a globally, distributed, immutable mattress. That is about it. Are there any other genuine uses I am missing?

If the bubble burst, and bitcoin fell to $1,000 tomorrow.. would that be a good time to buy it to store some of my wealth? Why $1000? The value isn't zero.. but what is it?
Last edited by bligh on Thu Dec 07, 2017 9:57 pm, edited 1 time in total.

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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by technovelist » Thu Dec 07, 2017 9:57 pm

bligh wrote:
Thu Dec 07, 2017 9:52 pm
technovelist wrote:
Thu Dec 07, 2017 9:29 pm
bligh wrote:
Thu Dec 07, 2017 9:28 pm
Leif wrote:
Thu Dec 07, 2017 4:41 pm
BitCoin is suppose to be an alternate currency, right? If so it is a poor one. Ideally currencies have a stable value. It seems to me it is being primarily used for speculation. Lets see how far the "greater fool" theory runs.
wikipedia wrote:The greater fool theory states that the price of an object is determined not by its intrinsic value, but rather by irrational beliefs and expectations of market participants. A price can be justified by a rational buyer under the belief that another party is willing to pay an even higher price.
Agreed. But markets can stay irrational for a long long time.
True. But bubbles generally don't last very long, especially after they get to the vertical ascent phase.
The problem right now is, how do you even put a value to these things?
Is $100 too much? Why?
Is $10,000 too much? Why?
Is $1,000,000 too much? Why?

To me personally, bitcoin are worthless. Sure the blockchain is cool, and people in tech could probably will figure out how to use it to build some cool stuff on top of it. An immutable, distributed ledger that hogs electricity. Great.

Under non bubble circumstances, who would find bitcoin actually worth something?

Don't tell me it's a replacement for fiat currencies, because Bitcoin would itself be a fiat currency (if it was a currency) with super high transaction costs and only a random group of miners and developers in charge. Let's see.. I would love it if I was engaging in criminal activity or money laundering. I would use it to transfer out my wealth if I was living under an oppressive regime, or under social, civil or military threat. Or if I was just someone who wanted to stuff some of my money under a globally, distributed, immutable mattress. That is about it. Are there any other genuine uses I am missing?

If the bubble burst, and bitcoin fell to $1,000 tomorrow.. would that be a good time to buy it to store some of my wealth? Why $1000?
Well, I would say that it might be worth something, maybe $5, for all of those uses.

But this is the most obvious bubble I've ever seen, and I'm including the 1979/1980 silver, dotcom, and housing bubbles.

I learned my lesson in the first of those, buying silver on the DAY OF THE TOP... on margin. :oops:

As for Bitcoin, we're in the vertical ascent phase. That usually doesn't last too long. Maybe a month or two?
In theory, theory and practice are identical. In practice, they often differ.

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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by Teague » Thu Dec 07, 2017 10:19 pm

nisiprius wrote:
Wed Nov 29, 2017 8:01 am
The story goes that George Gershwin asked composer Igor Stravinsky for lessons. Stravinsky asked Gershwin how much money he made; when Gershwin told him, Stravinsky said, "I should be taking lessons from you."
I do not know how George Gershwin may have invested his money, but he did benefit from having an Ira.
Semper Augustus

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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by White Coat Investor » Fri Dec 08, 2017 12:32 am

bligh wrote:
Thu Dec 07, 2017 9:52 pm


If the bubble burst, and bitcoin fell to $1,000 tomorrow.. would that be a good time to buy it to store some of my wealth? Why $1000? The value isn't zero.. but what is it?
That's what nobody knows. Maybe it's $100. Maybe it's $1,000. Maybe it's $10,000. Maybe it's $100,000.

It's in the vertical phase now. We don't know how high it will go. We do know it will have a massive fall. And then we don't know where it will end up. It's quite possible it will end up somewhere higher than it is today. But that's really the big bet.

Fascinating to watch. Don't think I could sleep at night if I owned any though.
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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by MossySF » Fri Dec 08, 2017 3:34 am

A rational person would have sold out at 100% profit ($10K).

Of course, even if you go the "sell 50% route every X% gain" -- you would have no where near the 1.5M-2M the good friend has now.

It takes an irrational person to hold during a $10K --> $1.5M upswing. Hence, there is no rational argument that makes any sense on selling now.

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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by iflyjetzzz » Fri Dec 08, 2017 4:03 am

movingabroad wrote:
Thu Dec 07, 2017 8:16 pm
The REAL effects of scarcity and supply and demand haven't even kicked in yet. This is the one opportunity where people have had the chance to get in before wall street. IPO's aren't available to small investors. Wall Street isn't even here yet. But the herd is coming... ETFs will most likely be available in 2018 as well. This is gonna go way higher, although there will be many corrections along the way.

Also, you guys need to quit calling it tulips. Tulips crashed 1 time and never returned to anywhere near their previous high. Bitcoin has crashed over 50% like 6 or 7 times, even 80% one time, and it continuously goes back to new all time highs.

I watched someone buy 12million at 17,700 on GDAX today in a matter of 3 seconds. This is real money. This is not just small time investors.

HODL baby.
Wait. What? Tulip prices went straight up and only crashed 1 time? I'm calling BS. I have never found daily price records from the 17th century tulip trade and I certainly wouldn't trust any anecdotal statements on the daily price action of tulips in the 17th century ... your statement on the price action is anecdotal and you have nothing of substance to back it up. If you do, it will also be anecdotal.

As far as Bitcoin or any other cryptocurrency goes, they will all eventually crash. Why? Because they are backed by nothing. Fiat currencies have the power of taxation to back the currency. Bitcoin simply has the already expended computations that mined the bitcoin. There is nothing backing bitcoin or any other cryptocurrency. And as far as blockchain technology, who cares? It's not something that a holder of cryptocurrencies can receive income from so it has zero value.

Bitcoins are no different than the baseball card, beanie baby, and yes, tulip crazes of the past. I am willing to bet that there are many holders of bitcoin that have used extreme leverage to pay for their holdings - that will make price swings even more exaggerated.

I wouldn't touch Bitcoin or any other cryptocurrency on either the long or short side because no one knows when the mania of crowds will end. Perhaps one should pull Charles Mackay's book off the shelf and review it.

Tamalak
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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by Tamalak » Fri Dec 08, 2017 9:24 am

OnFire wrote:
Wed Nov 29, 2017 10:15 pm
chevca wrote:
Wed Nov 29, 2017 12:14 pm
He's a business man and a smart one at that,.... and you're a fireman/paramedic. What do you think you should tell him? :happy

I kid, no knock on fire fighter or paramedics.

I would tell him..... nothing. Let him do as he pleases with this.
Haha. He is a firefighter and a paramedic too. That’s how I know him. We went though the academy together almost ten years ago, and our kids go to the same school.


I asked him under what circumstances he would sell any of it. Was he going to get out when it hit a certain price point? A total value? Keep it or 30 years and give it to his kids? He said he was just going to let it ride. “The sky’s the limit.”

He said I was too conservative in all my dealings. I broke my shoulder mountain biking down a volcano, tore an ACL skiing moguls in Colorado, went ship wreck diving in the Bahamas, bungee jumped over a pool in a Chicago, and raced Porsche’s and BMWs on the track at 140+ mph. And I run through burning buildings.

But I’m too conservative.

I told him my wife and I are on track to have a net worth of a million dollars in less than five years (barring catastrophe) and that I don’t mind getting rich slowly, as long as I get rich.

I told he should at least consider selling one coin every time it hit a logarithmic benchmark. One at $1k, 10K, etc. He didn’t seem interested.

He owns a business that does very well. He will be fine.

This was as much a thought excercise as a true solicitation for advice.

I told him to listen to Buffet, (He is a fan). “Be fearful when others are greedy. Be greedy when others ar fearful.” And to study the internet bubble of 1999, the South area bubble, and the Dutch Tulip Mania. He didn’t seem interested.

History doesn’t repeat itself, but it does rhyme.

You can lead a horse to water. Ah well.
You sound unbearable to be around. Get a freaking handle on your ultra-type-A personality. You made your opinion known to him, now back off.

I would never buy bitcoin unless I wanted to use it as an actual currency. If I somehow woke up with bitcoin I would sell it immediately whether the price was 10 million or 10 cents. But I'm not the one who turned 10k into 1 million so I'm not about to lecture those that have.

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nedsaid
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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by nedsaid » Fri Dec 08, 2017 10:28 am

HomerJ wrote:
Wed Nov 29, 2017 11:31 am
I went to Vegas in 2007 and talked to my cab driver about the housing boom there at the time.

He said his condo was worth over a million dollars (he bought it for $200,000). I told him to sell it, and rent for a while.

He said he might sell if it got to $2 million.

It didn't. I always wondered what happened to that guy.
My guess is that he is still driving his cab.
A fool and his money are good for business.

invest0
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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by invest0 » Fri Dec 08, 2017 11:03 am

Tell him to let it ride. :)

No seriously, if he understands that it's a volatile asset, what's the problem?

Sure, he's "anchoring". But he didn't risk that much to start and must have known he was taking a big gamble, especially back then. There are still pretty compelling cases that Bitcoin could go 100x higher.

Your advice could either be the best or worst thing for him. The reason there aren't so many Bitcoin millionaires is that plenty of others said exactly what you did between 2011 and 2016.

vaught
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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by vaught » Mon Dec 11, 2017 5:00 pm

I'm curious...

Let's say that friend did decide to liquidate his $1 million in bitcoins.

Anyone have any idea what the actual transaction costs would be to go from X bitcoins to $1,000,000 cash?

SEAworld9
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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by SEAworld9 » Tue Dec 12, 2017 12:54 am

vaught wrote:
Mon Dec 11, 2017 5:00 pm
I'm curious...

Let's say that friend did decide to liquidate his $1 million in bitcoins.

Anyone have any idea what the actual transaction costs would be to go from X bitcoins to $1,000,000 cash?
that really depends on where it sits, how it's done, where it sits, and how fast. if it's already on an exchange, maker fees are very low (0% on gdax). if it's in cold storage it depends on what speed the transfer is done (this is probably how he/she has it stored).

vaught
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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by vaught » Tue Dec 12, 2017 8:04 am

SEAworld9 wrote:
Tue Dec 12, 2017 12:54 am
vaught wrote:
Mon Dec 11, 2017 5:00 pm
I'm curious...

Let's say that friend did decide to liquidate his $1 million in bitcoins.

Anyone have any idea what the actual transaction costs would be to go from X bitcoins to $1,000,000 cash?
that really depends on where it sits, how it's done, where it sits, and how fast. if it's already on an exchange, maker fees are very low (0% on gdax). if it's in cold storage it depends on what speed the transfer is done (this is probably how he/she has it stored).
Let's say from cold storage to the exchange.
Sell on exchange.
And then transfer to bank.

movingabroad
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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by movingabroad » Tue Dec 12, 2017 8:45 am

[/quote]

Let's say from cold storage to the exchange.
Sell on exchange.
And then transfer to bank.
[/quote]

Couple bucks to send it from cold storage to the exchange. 0 fees to sell on the exchange. 0 fees to transfer it to the bank account.

vaught
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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by vaught » Tue Dec 12, 2017 9:08 am

movingabroad wrote:
Tue Dec 12, 2017 8:45 am
Let's say from cold storage to the exchange.
Sell on exchange.
And then transfer to bank.
[/quote]

Couple bucks to send it from cold storage to the exchange. 0 fees to sell on the exchange. 0 fees to transfer it to the bank account.
[/quote]

Wow. Couple bucks to liquidate $1M. Would've guessed more. Thanks.

mrgeeze
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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by mrgeeze » Tue Dec 12, 2017 1:29 pm

OnFire wrote:
Wed Nov 29, 2017 2:39 am
Granted, he “saw the light” nearly 4 years ago, when BTC was $114. He bought $10K worth. I’m thinking it might be time to take some profits. He is a working stiff, but also a business man and a smart one at that. His opinion is that if if it goes to zero, $10K won’t break him, but if he sells, he might regret it, and he’s “letting it ride”.

I told him to get out with his profit when it was $200 a coin. Why is now different than then? What would YOU say to convince him, or should I just keep my mouth shut completely?
A good friend often reminds me You don't make money till you sell something.
If I had 2 orders of magnitude return on my investment, I would at least take a taste.
You might suggest he cash out 25 or 50% of it. Personally I'd sell 50% pay the 75 grand in taxes, burn 25 on a CRAZY weekend, and have a 400K for more reasonable investing. But that's me.

HomeRuns are often not much different than long fly ball outs.
Did I mention you don't make money till you sell something

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bltkmt
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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by bltkmt » Tue Dec 12, 2017 1:35 pm

"Nice trade."

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arcticpineapplecorp.
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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by arcticpineapplecorp. » Fri Dec 22, 2017 7:38 pm

I'd make sure he knew the following:

Bitcoin is a market I wouldn't want to be in. Good luck playing with the cherished few who own most of the coin:
How much of the volatility of bitcoin is due to whales influencing the market price versus new or outside investors? Bloomberg reports that about 40% of all bitcoin is owned by roughly 1,000 people, and many people believe these “whales” collude to influence the price of bitcoin. But there’s no proof of this. source: https://finance.yahoo.com/news/74-bitco ... 33293.html
“I think there are a few hundred guys,” says Kyle Samani, managing partner at Multicoin Capital. “They all probably can call each other, and they probably have.” One reason to think so: At least some kinds of information sharing are legal, says Gary Ross, a securities lawyer at Ross & Shulga. Because bitcoin is a digital currency and not a security, he says, there’s no prohibition against a trade in which a group agrees to buy enough to push the price up and then cashes out in minutes. source: https://www.bloomberg.com/news/articles ... the-market
I wouldn't want to swim in that pool.
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

goblue100
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Re: A good friend has nearly $1M in BitCoin what do I tell him?

Post by goblue100 » Sat Dec 23, 2017 9:40 am

invest0 wrote:
Fri Dec 08, 2017 11:03 am
Tell him to let it ride. :)

Sure, he's "anchoring". But he didn't risk that much to start and must have known he was taking a big gamble, especially back then. There are still pretty compelling cases that Bitcoin could go 100x higher.
Of course he is going to do what he wants. I would point out to him The marginal utility of money theory:

https://www.mrmoneymustache.com/2012/02 ... -new-life/
"Understanding the marginal utility of money is important for two reasons.

1. It forces you to realize that there’s a diminishing return in earning money.

Many people assume more money is always better, and they allow the potential for more money to be a carrot on a stick. They just keep pursuing it, never pausing to reflect on what they’re really after. "
Some people are immune to good advice. - Saul Goodman

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