Who’s Buying Bitcoin?

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bertilak
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Re: Who’s Buying Bitcoin?

Post by bertilak » Thu Jan 16, 2020 11:51 am

Jon_PassiveInvestor wrote:
Thu Jan 16, 2020 11:35 am
bertilak wrote:
Thu Jan 16, 2020 11:25 am
If you are a speculator, Bitcoin might be worth considering.

But speculation is not investing. I can see how it might be fun and exciting to be a speculator but I am an investor and not a speculator so I own NO Bitcoin.

If I were to become a speculator I would speculate in something I found interesting enough to study to the point of becoming an expert (not a dabbler) and therefore, potentially, a success. It seems you (the OP) are quite interested in Bitcoin, but it looks like you haven't put in enough time and effort to become an expert. This is a recipe for disaster. Perhaps you can start very small just to learn the ropes of how it is done. Consider your almost inevitable losses your tuition. How much tuition are you willing to pay?
I’m 99% in VTSAX. I’m a boglehead at heart. Bitcoin is something fun, nothing more.
So you're on the right track.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet

Mickstick
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Re: Who’s Buying Bitcoin?

Post by Mickstick » Thu Jan 16, 2020 12:01 pm

I don't own any crypto but I think bitcoin in particular looks like it is having some problems with scale and privacy issues. I look at crypto as another technology sector where there is continual innovation. I just can't believe that the first iteration of cryptocurrency will continue on in perpetuity when it seems relatively easy start a new one.

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Jon_PassiveInvestor
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Re: Who’s Buying Bitcoin?

Post by Jon_PassiveInvestor » Thu Jan 16, 2020 12:01 pm

bertilak wrote:
Thu Jan 16, 2020 11:51 am
Jon_PassiveInvestor wrote:
Thu Jan 16, 2020 11:35 am
bertilak wrote:
Thu Jan 16, 2020 11:25 am
If you are a speculator, Bitcoin might be worth considering.

But speculation is not investing. I can see how it might be fun and exciting to be a speculator but I am an investor and not a speculator so I own NO Bitcoin.

If I were to become a speculator I would speculate in something I found interesting enough to study to the point of becoming an expert (not a dabbler) and therefore, potentially, a success. It seems you (the OP) are quite interested in Bitcoin, but it looks like you haven't put in enough time and effort to become an expert. This is a recipe for disaster. Perhaps you can start very small just to learn the ropes of how it is done. Consider your almost inevitable losses your tuition. How much tuition are you willing to pay?
I’m 99% in VTSAX. I’m a boglehead at heart. Bitcoin is something fun, nothing more.
So you're on the right track.
Yup, just maxed out both Roths with VTSAX for 2019 and 2020! After selling our business, our investing journey has begun finally. Last five years I just reinvested profits into the business.

beehivehave
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Re: Who’s Buying Bitcoin?

Post by beehivehave » Thu Jan 16, 2020 12:07 pm

There are over 5,000 such currencies. Picking winners in that market is like choosing a stock in the tech bubble. As there was $4.3B in fraud in 2019 out of a total market cap of $250B-$350B, you probably have a better chance of being cheated than in picking a long term winner, especially if you stray from bitcoin.
https://coinmarketcap.com/

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Jon_PassiveInvestor
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Re: Who’s Buying Bitcoin?

Post by Jon_PassiveInvestor » Thu Jan 16, 2020 12:25 pm

Just pumped another 25k into vtsax! North American trade deal was just signed. The market is going to roar.

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nisiprius
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Re: Who’s Buying Bitcoin?

Post by nisiprius » Thu Jan 16, 2020 12:44 pm

To me, the puzzle from the very beginning with bitcoin was why it was not designed to keep a stable value. That seemed totally at odds with any notion of being a currency. It seemed intentionally designed to transfer value from late adopters to early adopters.

Many swindles have some components in common. There is a plausible cover story as to why it could be true, to numb our natural disbelief. There are testimonials showing that it has made some people rich, to lure us into participating.

In the original Ponzi scheme, the plausible cover story was "arbitraging international postal reply coupons." This was legitimate, it really could work--for tiny amounts of money with great amounts of effort. The lure was the many early "investors" who did double their money in ninety days as promised as the lure.

With bitcoin, the covers story is "it's a currency," or the currency of the future, or what have you. And the lure is that, rather than maintaining a stable value, it makes some people rich.

The stated goals for bitcoin are on record in Satoshi Nakamura's paper. Among them is that it be more useful for "small casual transactions" than credit cards, PayPal, etc. Another is the elimination of the need for financial institutions and a "trust based model," because of the claimed high cost of providing reversible transactions (i.e. the high cost of making it possible to dispute a bill).

The words "stable" and "stability" do not appear in the paper.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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FrugalInvestor
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Re: Who’s Buying Bitcoin?

Post by FrugalInvestor » Thu Jan 16, 2020 12:51 pm

Nate79 wrote:
Wed Jan 15, 2020 6:26 pm
retired@50 wrote:
Wed Jan 15, 2020 6:15 pm
Jon_PassiveInvestor wrote:
Wed Jan 15, 2020 4:52 pm
I’m just wondering what allocation a boglehead would use.
Bogleheads use 0.00% for Bitcoin allocation.

Regards,
Agreed. Bitcoin is the anti boglehead investment.
True, it's pure speculation not investment.
IGNORE the noise! | Our life is frittered away by detail... simplify, simplify. - Henry David Thoreau

PVW
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Re: Who’s Buying Bitcoin?

Post by PVW » Thu Jan 16, 2020 12:52 pm

Jon_PassiveInvestor wrote:
Wed Jan 15, 2020 4:16 pm
I’m about to pull trigger and buy bitcoin, ethereum, and some Litecoin tomorrow. Who else is investing in these? What % allocation are you going with?
US dollars are going to rise in value relative to cryptocurrencies. I'm sure enough of this that I've used my entire cryptocurrency allocation to buy dollars.

redstar
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Re: Who’s Buying Bitcoin?

Post by redstar » Thu Jan 16, 2020 1:04 pm

I have a small allocation to cryptocurrency. I decided to buy the top 5 cryptocurrencies by market weight, which requires fairly little rebalancing. I originally tried to own the top 20, but cryptocurrencies moved in and out of the index too often and I couldn't keep up. I exclude Tether, as this is attempting to peg the value at $1 USD, and I can just hold USD instead.

The top 5 cryptocurrencies accounts for approximately 84% of the market capitalization as listed on https://coinmarketcap.com/.

I hold the smallest allocations and some amount of Bitcoin/Ethereum on Coinbase for rebalancing. I rebalance if the entire portfolio is off by 5% or greater.

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Jon_PassiveInvestor
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Re: Who’s Buying Bitcoin?

Post by Jon_PassiveInvestor » Thu Jan 16, 2020 1:10 pm

redstar wrote:
Thu Jan 16, 2020 1:04 pm
I have a small allocation to cryptocurrency. I decided to buy the top 5 cryptocurrencies by market weight, which requires fairly little rebalancing. I originally tried to own the top 20, but cryptocurrencies moved in and out of the index too often and I couldn't keep up. I exclude Tether, as this is attempting to peg the value at $1 USD, and I can just hold USD instead.

The top 5 cryptocurrencies accounts for approximately 84% of the market capitalization as listed on https://coinmarketcap.com/.

I hold the smallest allocations and some amount of Bitcoin/Ethereum on Coinbase for rebalancing. I rebalance if the entire portfolio is off by 5% or greater.
I’m just doing bitcoin and ethereum for now. 80/20 allocation.

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unclescrooge
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Re: Who’s Buying Bitcoin?

Post by unclescrooge » Thu Jan 16, 2020 1:11 pm

watchnerd wrote:
Wed Jan 15, 2020 10:15 pm
I'm not buying any more Bitcoin until I can pay for it with physical gold without converting it to dirty fiat in between.
So a Bitcoin vending machine that accepts gold bars? :mrgreen:

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Re: Who’s Buying Bitcoin?

Post by abuss368 » Thu Jan 16, 2020 1:11 pm

Bitcoin? Don't walk. Run!
John C. Bogle - Two Fund Portfolio: Total Stock & Total Bond. "Simplicity is the master key to financial success."

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Re: Who’s Buying Bitcoin?

Post by abuss368 » Thu Jan 16, 2020 1:11 pm

unclescrooge wrote:
Thu Jan 16, 2020 1:11 pm
watchnerd wrote:
Wed Jan 15, 2020 10:15 pm
I'm not buying any more Bitcoin until I can pay for it with physical gold without converting it to dirty fiat in between.
So a Bitcoin vending machine that accepts gold bars? :mrgreen:
Seriously?
John C. Bogle - Two Fund Portfolio: Total Stock & Total Bond. "Simplicity is the master key to financial success."

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Jon_PassiveInvestor
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Re: Who’s Buying Bitcoin?

Post by Jon_PassiveInvestor » Thu Jan 16, 2020 1:19 pm

I can pay for my coffee in bitcoin and then pay for a shopping trip at Nordstrom. Pretty crazy to think the top dogs are accepting bitcoin as currency!

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unclescrooge
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Re: Who’s Buying Bitcoin?

Post by unclescrooge » Thu Jan 16, 2020 1:23 pm

abuss368 wrote:
Thu Jan 16, 2020 1:11 pm
unclescrooge wrote:
Thu Jan 16, 2020 1:11 pm
watchnerd wrote:
Wed Jan 15, 2020 10:15 pm
I'm not buying any more Bitcoin until I can pay for it with physical gold without converting it to dirty fiat in between.
So a Bitcoin vending machine that accepts gold bars? :mrgreen:
Seriously?
Apparently coinstar already hands out BTC in exchange for your coins, so we're half way there.

redstar
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Re: Who’s Buying Bitcoin?

Post by redstar » Thu Jan 16, 2020 1:28 pm

watchnerd wrote:
Wed Jan 15, 2020 10:15 pm
I'm not buying any more Bitcoin until I can pay for it with physical gold without converting it to dirty fiat in between.
You can already post an ad on https://localbitcoins.com/ offering gold for Bitcoins.

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Nate79
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Re: Who’s Buying Bitcoin?

Post by Nate79 » Thu Jan 16, 2020 1:35 pm

Jon_PassiveInvestor wrote:
Thu Jan 16, 2020 1:19 pm
I can pay for my coffee in bitcoin and then pay for a shopping trip at Nordstrom. Pretty crazy to think the top dogs are accepting bitcoin as currency!
Interesting. When did you buy a coffee with bitcoin?

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Pete12
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Re: Who’s Buying Bitcoin?

Post by Pete12 » Thu Jan 16, 2020 1:39 pm

John C. Bogle: “Avoid Bitcoin like the plague. Did I make myself clear?”

bitdocmd
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Re: Who’s Buying Bitcoin?

Post by bitdocmd » Thu Jan 16, 2020 1:42 pm

nisiprius wrote:
Thu Jan 16, 2020 12:44 pm
To me, the puzzle from the very beginning with bitcoin was why it was not designed to keep a stable value. That seemed totally at odds with any notion of being a currency. It seemed intentionally designed to transfer value from late adopters to early adopters.

Many swindles have some components in common. There is a plausible cover story as to why it could be true, to numb our natural disbelief. There are testimonials showing that it has made some people rich, to lure us into participating.

In the original Ponzi scheme, the plausible cover story was "arbitraging international postal reply coupons." This was legitimate, it really could work--for tiny amounts of money with great amounts of effort. The lure was the many early "investors" who did double their money in ninety days as promised as the lure.

With bitcoin, the covers story is "it's a currency," or the currency of the future, or what have you. And the lure is that, rather than maintaining a stable value, it makes some people rich.

The stated goals for bitcoin are on record in Satoshi Nakamura's paper. Among them is that it be more useful for "small casual transactions" than credit cards, PayPal, etc. Another is the elimination of the need for financial institutions and a "trust based model," because of the claimed high cost of providing reversible transactions (i.e. the high cost of making it possible to dispute a bill).

The words "stable" and "stability" do not appear in the paper.
Everyone should read the original white paper by Satoshi Nakamoto before even considering investing in Bitcoin. After that I would recommend Saifedean Ammous' The Bitcoin Standard.

I have been a Boglehead for a very long time and also have a significant portion of my net worth invested in Bitcoin. Not cryptocurrency, but only Bitcoin. There are a ton of brilliant people on this forum but bogleheads.org is not the most fertile ground for bringing people into the Bitcoin world!

redstar
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Re: Who’s Buying Bitcoin?

Post by redstar » Thu Jan 16, 2020 1:43 pm

Jon_PassiveInvestor wrote:
Thu Jan 16, 2020 1:19 pm
I can pay for my coffee in bitcoin and then pay for a shopping trip at Nordstrom. Pretty crazy to think the top dogs are accepting bitcoin as currency!
I'll admit I used Bitcoin to buy a sandwich at a local deli once. But the transaction fees are pretty high for these small transactions. It looks like, at current fees, a Bitcoin transaction would start to beat out 2.9% credit card fees above $15 or so. That's a lot better than it has been in the past.

Fee history: https://bitcoinfees.info/

DaftInvestor
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Re: Who’s Buying Bitcoin?

Post by DaftInvestor » Thu Jan 16, 2020 1:44 pm

Jon_PassiveInvestor wrote:
Wed Jan 15, 2020 4:16 pm
I’m about to pull trigger and buy bitcoin, ethereum, and some Litecoin tomorrow. Who else is investing in these? What % allocation are you going with?
I find your username most ironic based upon this question :)
You can change your username by PM'ing an Admin (maybe go with "Jon_SpeculativeInvestor" :) ).

bitdocmd
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Re: Who’s Buying Bitcoin?

Post by bitdocmd » Thu Jan 16, 2020 1:45 pm

Jon_PassiveInvestor wrote:
Wed Jan 15, 2020 4:16 pm
I’m about to pull trigger and buy bitcoin, ethereum, and some Litecoin tomorrow. Who else is investing in these? What % allocation are you going with?
If as a digital store of value would buy Bitcoin only. Use Cash App.

stuper1
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Re: Who’s Buying Bitcoin?

Post by stuper1 » Thu Jan 16, 2020 1:47 pm

watchnerd wrote:
Thu Jan 16, 2020 10:35 am
stuper1 wrote:
Thu Jan 16, 2020 10:26 am


Safe deposit box at bank. I don't have a lot there yet, but hope to at some point. You can get a large value in gold into a small safe deposit box. You can also buy insurance on it if you want to at a reasonable price.
Why physical?

If you're into crypto, I would have that electronic gold would be fine.
Why physical? One of the purposes of gold in my portfolio is to insure against the risk that all of my electronic holdings go to zero if the bits and bytes stored on a server at who-knows-what location get lost or become inaccessible through malfeasance or accident.

I'm into crypto for $300, which is a very tiny percentage of my portfolio. I wouldn't say that I'm "into crypto" in the colloquial sense of that phrase.

bitdocmd
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Re: Who’s Buying Bitcoin?

Post by bitdocmd » Thu Jan 16, 2020 1:48 pm

redstar wrote:
Thu Jan 16, 2020 1:43 pm
Jon_PassiveInvestor wrote:
Thu Jan 16, 2020 1:19 pm
I can pay for my coffee in bitcoin and then pay for a shopping trip at Nordstrom. Pretty crazy to think the top dogs are accepting bitcoin as currency!
I'll admit I used Bitcoin to buy a sandwich at a local deli once. But the transaction fees are pretty high for these small transactions. It looks like, at current fees, a Bitcoin transaction would start to beat out 2.9% credit card fees above $15 or so. That's a lot better than it has been in the past.

Fee history: https://bitcoinfees.info/
Once the Lightning Network is ready for prime time Bitcoin will be much better for payments. For now would stick with the legacy system (Venmo, Visa/Mastercard, etc.)

The true value proposition of Bitcoin is as a non-inflatable decentralized digital store of value.

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queso
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Re: Who’s Buying Bitcoin?

Post by queso » Thu Jan 16, 2020 1:49 pm

redstar wrote:
Thu Jan 16, 2020 1:43 pm
Jon_PassiveInvestor wrote:
Thu Jan 16, 2020 1:19 pm
I can pay for my coffee in bitcoin and then pay for a shopping trip at Nordstrom. Pretty crazy to think the top dogs are accepting bitcoin as currency!
I'll admit I used Bitcoin to buy a sandwich at a local deli once. But the transaction fees are pretty high for these small transactions. It looks like, at current fees, a Bitcoin transaction would start to beat out 2.9% credit card fees above $15 or so. That's a lot better than it has been in the past.

Fee history: https://bitcoinfees.info/
Hopefully it wasn't a hot sandwich or they at least let you eat it before all the confirmations came in. :happy

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Jon_PassiveInvestor
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Re: Who’s Buying Bitcoin?

Post by Jon_PassiveInvestor » Thu Jan 16, 2020 1:49 pm

Nate79 wrote:
Thu Jan 16, 2020 1:35 pm
Jon_PassiveInvestor wrote:
Thu Jan 16, 2020 1:19 pm
I can pay for my coffee in bitcoin and then pay for a shopping trip at Nordstrom. Pretty crazy to think the top dogs are accepting bitcoin as currency!
Interesting. When did you buy a coffee with bitcoin?
Starbucks

JHU ALmuni
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Re: Who’s Buying Bitcoin?

Post by JHU ALmuni » Thu Jan 16, 2020 1:51 pm

I've been buying for the past couple years, willing to take the risk hoping for higher return. So far I'm happy with the performance. :beer

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Jon_PassiveInvestor
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Re: Who’s Buying Bitcoin?

Post by Jon_PassiveInvestor » Thu Jan 16, 2020 1:52 pm

JHU ALmuni wrote:
Thu Jan 16, 2020 1:51 pm
I've been buying for the past couple years, willing to take the risk hoping for higher return. So far I'm happy with the performance. :beer
I feel the same. Big things in the future!

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Nate79
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Re: Who’s Buying Bitcoin?

Post by Nate79 » Thu Jan 16, 2020 1:52 pm

Jon_PassiveInvestor wrote:
Thu Jan 16, 2020 1:49 pm
Nate79 wrote:
Thu Jan 16, 2020 1:35 pm
Jon_PassiveInvestor wrote:
Thu Jan 16, 2020 1:19 pm
I can pay for my coffee in bitcoin and then pay for a shopping trip at Nordstrom. Pretty crazy to think the top dogs are accepting bitcoin as currency!
Interesting. When did you buy a coffee with bitcoin?
Starbucks
I'm curious how you did the transaction. Was it in the app or how did you pay with bitcoin at Starbucks?

redstar
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Re: Who’s Buying Bitcoin?

Post by redstar » Thu Jan 16, 2020 1:53 pm

queso wrote:
Thu Jan 16, 2020 1:49 pm
redstar wrote:
Thu Jan 16, 2020 1:43 pm
Jon_PassiveInvestor wrote:
Thu Jan 16, 2020 1:19 pm
I can pay for my coffee in bitcoin and then pay for a shopping trip at Nordstrom. Pretty crazy to think the top dogs are accepting bitcoin as currency!
I'll admit I used Bitcoin to buy a sandwich at a local deli once. But the transaction fees are pretty high for these small transactions. It looks like, at current fees, a Bitcoin transaction would start to beat out 2.9% credit card fees above $15 or so. That's a lot better than it has been in the past.

Fee history: https://bitcoinfees.info/
Hopefully it wasn't a hot sandwich or they at least let you eat it before all the confirmations came in. :happy
Hah, no they didn't seem to care for confirmations. I guess sandwiches aren't high-stakes enough to worry about double spending.

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queso
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Re: Who’s Buying Bitcoin?

Post by queso » Thu Jan 16, 2020 1:56 pm

redstar wrote:
Thu Jan 16, 2020 1:53 pm
queso wrote:
Thu Jan 16, 2020 1:49 pm
redstar wrote:
Thu Jan 16, 2020 1:43 pm
Jon_PassiveInvestor wrote:
Thu Jan 16, 2020 1:19 pm
I can pay for my coffee in bitcoin and then pay for a shopping trip at Nordstrom. Pretty crazy to think the top dogs are accepting bitcoin as currency!
I'll admit I used Bitcoin to buy a sandwich at a local deli once. But the transaction fees are pretty high for these small transactions. It looks like, at current fees, a Bitcoin transaction would start to beat out 2.9% credit card fees above $15 or so. That's a lot better than it has been in the past.

Fee history: https://bitcoinfees.info/
Hopefully it wasn't a hot sandwich or they at least let you eat it before all the confirmations came in. :happy
Hah, no they didn't seem to care for confirmations. I guess sandwiches aren't high-stakes enough to worry about double spending.
Was it a Jewish deli? If so, there could have been at least 150k Satoshi or so worth of meat on that sandwich. :D

SlowlySaving
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Re: Who’s Buying Bitcoin?

Post by SlowlySaving » Thu Jan 16, 2020 1:58 pm

Asset allocation for something like cryptocurrencies should be less than 1 or 2% of total portfolio. I have less than 1 percent and hold Bitcoin, LTC and ETH. Definitely is a gamble and you should only use money you don't need and quite possibly lose.
Good luck!

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Jon_PassiveInvestor
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Re: Who’s Buying Bitcoin?

Post by Jon_PassiveInvestor » Thu Jan 16, 2020 2:02 pm

Nate79 wrote:
Thu Jan 16, 2020 1:52 pm
Jon_PassiveInvestor wrote:
Thu Jan 16, 2020 1:49 pm
Nate79 wrote:
Thu Jan 16, 2020 1:35 pm
Jon_PassiveInvestor wrote:
Thu Jan 16, 2020 1:19 pm
I can pay for my coffee in bitcoin and then pay for a shopping trip at Nordstrom. Pretty crazy to think the top dogs are accepting bitcoin as currency!
Interesting. When did you buy a coffee with bitcoin?
Starbucks
I'm curious how you did the transaction. Was it in the app or how did you pay with bitcoin at Starbucks?
App called Flexa. Crate Barrel accepts it now too.

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Jon_PassiveInvestor
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Re: Who’s Buying Bitcoin?

Post by Jon_PassiveInvestor » Thu Jan 16, 2020 2:08 pm

SlowlySaving wrote:
Thu Jan 16, 2020 1:58 pm
Asset allocation for something like cryptocurrencies should be less than 1 or 2% of total portfolio. I have less than 1 percent and hold Bitcoin, LTC and ETH. Definitely is a gamble and you should only use money you don't need and quite possibly lose.
Good luck!
I agree completely. I will cap it at 1%

SemiRetire
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Re: Who’s Buying Bitcoin?

Post by SemiRetire » Thu Jan 16, 2020 2:09 pm

Jon_PassiveInvestor wrote:
Wed Jan 15, 2020 4:16 pm
I’m about to pull trigger and buy bitcoin, ethereum, and some Litecoin tomorrow. Who else is investing in these? What % allocation are you going with?
I have bought btc for a over a couple years now. It has really gone up and sometimes hits 15-20 percent of my portfolio. It’s mad money, I have probably invested like 2-3 percent of my net worth in crypto. I have never sold btc, held through 20k, bought again at 6k, 3k, going down, catches me the falling knife, then a small bit at 5k on way up.

Bitcoin yearly return

This table displays Bitcoin Historical Prices on January 1st of each year.
Year Bitcoin Price ($) Change ($) Change (%)
2019 3,869.47 -9,542.97 -71.15
2018 13,412.44 12,414.75 1,244.35
2017 997.69 563.23 129.64
2016 434.46 120.54 38.40
2015 313.92 -456.51 -59.25
2014 770.44 757.13 5,690.96
2013 13.30 8.04 152.56
2012 5.27 4.97 1,655.90
2011 0.30 0.21 249.65
2010 0.09 0 0

Sorry for jumbled nature.

If you buy bitcoin, it will be VERY volatile. It can drop 70-90 percent in value expectantly.

I assume you are not a timer, but a buy and holder (HODLER in bitcoin parlance). Compared to say, former holders of small cap value or say REIT, who have chosen to quit doing those asset classes..... Bitcoin is far far more likely to result in capitulation.

So write off that money mentally, DCA in with money you can afford to lose, and HODL for at least 5-10 years no matter what happens....

Of course, if you can time, then you can time lol, but I do not believe in timing return expectantly.

Good luck.

I would keep your invested percentage small, like 1-3 percent, at most 10 percent. Btc is definitely “mad money”. Now for the end percentage, with big gains, I view that as a different question. I view my mad money account as outside of my asset allocation, but in the fact end, if it hits like 30-50 percent net worth, I will likely start selling some, even though I think ten years from now a significant gain is reasonable likey.

All the above is boglehead Heresy, it’s a MAD MONEY move you are contemplating. Be prepared to lose all you invest in btc.

Also if an chance you will back out when it falls hard, don’t invest, it WILL fall hard.

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Jon_PassiveInvestor
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Re: Who’s Buying Bitcoin?

Post by Jon_PassiveInvestor » Thu Jan 16, 2020 2:14 pm

SlowlySaving wrote:
Thu Jan 16, 2020 1:58 pm
Asset allocation for something like cryptocurrencies should be less than 1 or 2% of total portfolio. I have less than 1 percent and hold Bitcoin, LTC and ETH. Definitely is a gamble and you should only use money you don't need and quite possibly lose.
Good luck!
What is your asset allocation % between the three?

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Jon_PassiveInvestor
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Re: Who’s Buying Bitcoin?

Post by Jon_PassiveInvestor » Thu Jan 16, 2020 2:15 pm

SemiRetire wrote:
Thu Jan 16, 2020 2:09 pm
Jon_PassiveInvestor wrote:
Wed Jan 15, 2020 4:16 pm
I’m about to pull trigger and buy bitcoin, ethereum, and some Litecoin tomorrow. Who else is investing in these? What % allocation are you going with?
I have bought btc for a over a couple years now. It has really gone up and sometimes hits 15-20 percent of my portfolio. It’s mad money, I have probably invested like 2-3 percent of my net worth in crypto. I have never sold btc, held through 20k, bought again at 6k, 3k, going down, catches me the falling knife, then a small bit at 5k on way up.

Bitcoin yearly return

This table displays Bitcoin Historical Prices on January 1st of each year.
Year Bitcoin Price ($) Change ($) Change (%)
2019 3,869.47 -9,542.97 -71.15
2018 13,412.44 12,414.75 1,244.35
2017 997.69 563.23 129.64
2016 434.46 120.54 38.40
2015 313.92 -456.51 -59.25
2014 770.44 757.13 5,690.96
2013 13.30 8.04 152.56
2012 5.27 4.97 1,655.90
2011 0.30 0.21 249.65
2010 0.09 0 0

Sorry for jumbled nature.

If you buy bitcoin, it will be VERY volatile. It can drop 70-90 percent in value expectantly.

I assume you are not a timer, but a buy and holder (HODLER in bitcoin parlance). Compared to say, former holders of small cap value or say REIT, who have chosen to quit doing those asset classes..... Bitcoin is far far more likely to result in capitulation.

So write off that money mentally, DCA in with money you can afford to lose, and HODL for at least 5-10 years no matter what happens....

Of course, if you can time, then you can time lol, but I do not believe in timing return expectantly.

Good luck.

I would keep your invested percentage small, like 1-3 percent, at most 10 percent. Btc is definitely “mad money”. Now for the end percentage, with big gains, I view that as a different question. I view my mad money account as outside of my asset allocation, but in the fact end, if it hits like 30-50 percent net worth, I will likely start selling some, even though I think ten years from now a significant gain is reasonable likey.

All the above is boglehead Heresy, it’s a MAD MONEY move you are contemplating. Be prepared to lose all you invest in btc.

Also if an chance you will back out when it falls hard, don’t invest, it WILL fall hard.
Yes I’m very aware. Capping out this investment at 1% of portfolio.

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ruralavalon
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Re: Who’s Buying Bitcoin?

Post by ruralavalon » Thu Jan 16, 2020 2:15 pm

Jon_PassiveInvestor wrote:
Thu Jan 16, 2020 2:02 pm
Nate79 wrote:
Thu Jan 16, 2020 1:52 pm
Jon_PassiveInvestor wrote:
Thu Jan 16, 2020 1:49 pm
Nate79 wrote:
Thu Jan 16, 2020 1:35 pm
Jon_PassiveInvestor wrote:
Thu Jan 16, 2020 1:19 pm
I can pay for my coffee in bitcoin and then pay for a shopping trip at Nordstrom. Pretty crazy to think the top dogs are accepting bitcoin as currency!
Interesting. When did you buy a coffee with bitcoin?
Starbucks
I'm curious how you did the transaction. Was it in the app or how did you pay with bitcoin at Starbucks?

App called Flexa. Crate Barrel accepts it now too.
"Flexa then converts a consumer’s cryptocurrency to U.S. dollars in real time for payment to the merchant." Venturebeat (5/13/2019),Flexa launches mobile app for spending cryptocurrency.

So cryptocurrency has to be converted to a real currency before you can actually spend it.
Last edited by ruralavalon on Thu Jan 16, 2020 2:18 pm, edited 1 time in total.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

Presintense
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Re: Who’s Buying Bitcoin?

Post by Presintense » Thu Jan 16, 2020 2:18 pm

Jon_PassiveInvestor wrote:
Wed Jan 15, 2020 11:55 pm
abuss368 wrote:
Wed Jan 15, 2020 10:57 pm
Jon_PassiveInvestor wrote:
Wed Jan 15, 2020 4:16 pm
I’m about to pull trigger and buy bitcoin, ethereum, and some Litecoin tomorrow. Who else is investing in these? What % allocation are you going with?
You may be on the wrong forum for this! Not an investment but rather speculation.
I’m realizing this haha.
Welcome to bogleheads. Wait. You’ve been here since 2011! Have you seen a doctor about your inability to absorb and assimilate the three fund portfolio? :happy
Performance = Potential - Distraction

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Jon_PassiveInvestor
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Re: Who’s Buying Bitcoin?

Post by Jon_PassiveInvestor » Thu Jan 16, 2020 2:22 pm

Presintense wrote:
Thu Jan 16, 2020 2:18 pm
Jon_PassiveInvestor wrote:
Wed Jan 15, 2020 11:55 pm
abuss368 wrote:
Wed Jan 15, 2020 10:57 pm
Jon_PassiveInvestor wrote:
Wed Jan 15, 2020 4:16 pm
I’m about to pull trigger and buy bitcoin, ethereum, and some Litecoin tomorrow. Who else is investing in these? What % allocation are you going with?
You may be on the wrong forum for this! Not an investment but rather speculation.
I’m realizing this haha.
Welcome to bogleheads. Wait. You’ve been here since 2011! Have you seen a doctor about your inability to absorb and assimilate the three fund portfolio? :happy
I joined them built a business so wasn’t very active! I’m back now :). I’m a single fund guy right now though, I’m 31. VTSAX train alllll aboard!

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Jon_PassiveInvestor
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Re: Who’s Buying Bitcoin?

Post by Jon_PassiveInvestor » Thu Jan 16, 2020 2:26 pm

ruralavalon wrote:
Thu Jan 16, 2020 2:15 pm
Jon_PassiveInvestor wrote:
Thu Jan 16, 2020 2:02 pm
Nate79 wrote:
Thu Jan 16, 2020 1:52 pm
Jon_PassiveInvestor wrote:
Thu Jan 16, 2020 1:49 pm
Nate79 wrote:
Thu Jan 16, 2020 1:35 pm


Interesting. When did you buy a coffee with bitcoin?
Starbucks
I'm curious how you did the transaction. Was it in the app or how did you pay with bitcoin at Starbucks?

App called Flexa. Crate Barrel accepts it now too.
"Flexa then converts a consumer’s cryptocurrency to U.S. dollars in real time for payment to the merchant." Venturebeat (5/13/2019),Flexa launches mobile app for spending cryptocurrency.

So cryptocurrency has to be converted to a real currency before you can actually spend it.
From what I know that’s correct. It’s a digital currency.

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watchnerd
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Re: Who’s Buying Bitcoin?

Post by watchnerd » Thu Jan 16, 2020 2:28 pm

unclescrooge wrote:
Thu Jan 16, 2020 1:11 pm
watchnerd wrote:
Wed Jan 15, 2020 10:15 pm
I'm not buying any more Bitcoin until I can pay for it with physical gold without converting it to dirty fiat in between.
So a Bitcoin vending machine that accepts gold bars? :mrgreen:
Sounds like a Go Fund Me project.
70% Global Market Weight Equities | 15% Long Treasuries 15% short TIPS & cash || RSU + ESPP

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ruralavalon
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Re: Who’s Buying Bitcoin?

Post by ruralavalon » Thu Jan 16, 2020 2:32 pm

Jon_PassiveInvestor wrote:
Thu Jan 16, 2020 2:26 pm
ruralavalon wrote:
Thu Jan 16, 2020 2:15 pm
Jon_PassiveInvestor wrote:
Thu Jan 16, 2020 2:02 pm
Nate79 wrote:
Thu Jan 16, 2020 1:52 pm
Jon_PassiveInvestor wrote:
Thu Jan 16, 2020 1:49 pm


Starbucks
I'm curious how you did the transaction. Was it in the app or how did you pay with bitcoin at Starbucks?

App called Flexa. Crate Barrel accepts it now too.
"Flexa then converts a consumer’s cryptocurrency to U.S. dollars in real time for payment to the merchant." Venturebeat (5/13/2019),Flexa launches mobile app for spending cryptocurrency.

So cryptocurrency has to be converted to a real currency before you can actually spend it.
From what I know that’s correct. It’s a digital currency.
My point being that cryptocurrency is not a currency.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

Topic Author
Jon_PassiveInvestor
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Re: Who’s Buying Bitcoin?

Post by Jon_PassiveInvestor » Thu Jan 16, 2020 3:57 pm

I’m thinking 60/20/20 for allocation across bit, eth, and Ltc. I’ll be buying and holding for years to come.

Thoughts?

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watchnerd
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Re: Who’s Buying Bitcoin?

Post by watchnerd » Thu Jan 16, 2020 3:58 pm

Jon_PassiveInvestor wrote:
Thu Jan 16, 2020 3:57 pm
I’m thinking 60/20/20 for allocation across bit, eth, and Ltc. I’ll be buying and holding for years to come.

Thoughts?
Ask on Reddit.

Not here.
70% Global Market Weight Equities | 15% Long Treasuries 15% short TIPS & cash || RSU + ESPP

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Jon_PassiveInvestor
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Re: Who’s Buying Bitcoin?

Post by Jon_PassiveInvestor » Thu Jan 16, 2020 4:04 pm

watchnerd wrote:
Thu Jan 16, 2020 3:58 pm
Jon_PassiveInvestor wrote:
Thu Jan 16, 2020 3:57 pm
I’m thinking 60/20/20 for allocation across bit, eth, and Ltc. I’ll be buying and holding for years to come.

Thoughts?
Ask on Reddit.

Not here.
Good advice ha! Did you see this study from Yale? https://www.investopedia.com/news/every ... ale-study/

beehivehave
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Re: Who’s Buying Bitcoin?

Post by beehivehave » Thu Jan 16, 2020 4:10 pm

Jon_PassiveInvestor wrote:
Thu Jan 16, 2020 4:04 pm
watchnerd wrote:
Thu Jan 16, 2020 3:58 pm
Jon_PassiveInvestor wrote:
Thu Jan 16, 2020 3:57 pm
I’m thinking 60/20/20 for allocation across bit, eth, and Ltc. I’ll be buying and holding for years to come.

Thoughts?
Ask on Reddit.

Not here.
Good advice ha! Did you see this study from Yale? https://www.investopedia.com/news/every ... ale-study/
Thanks, but I'd rather take the advice of John Bogle, Warren Buffet and Nobel Prize winner Shiller than some random Yale economist.

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watchnerd
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Re: Who’s Buying Bitcoin?

Post by watchnerd » Thu Jan 16, 2020 4:12 pm

Jon_PassiveInvestor wrote:
Thu Jan 16, 2020 4:04 pm
watchnerd wrote:
Thu Jan 16, 2020 3:58 pm
Jon_PassiveInvestor wrote:
Thu Jan 16, 2020 3:57 pm
I’m thinking 60/20/20 for allocation across bit, eth, and Ltc. I’ll be buying and holding for years to come.

Thoughts?
Ask on Reddit.

Not here.
Good advice ha! Did you see this study from Yale? https://www.investopedia.com/news/every ... ale-study/
No, but the headline sounds like click bait and, on the surface, idiotic.

I'd never put 6% of my portfolio in Bitcoin.

If a seven figure port, that's hundreds of thousands of dollars in Bitcoin.
70% Global Market Weight Equities | 15% Long Treasuries 15% short TIPS & cash || RSU + ESPP

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ruralavalon
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Re: Who’s Buying Bitcoin?

Post by ruralavalon » Thu Jan 16, 2020 4:20 pm

beehivehave wrote:
Thu Jan 16, 2020 4:10 pm
Jon_PassiveInvestor wrote:
Thu Jan 16, 2020 4:04 pm
watchnerd wrote:
Thu Jan 16, 2020 3:58 pm
Jon_PassiveInvestor wrote:
Thu Jan 16, 2020 3:57 pm
I’m thinking 60/20/20 for allocation across bit, eth, and Ltc. I’ll be buying and holding for years to come.

Thoughts?
Ask on Reddit.

Not here.
Good advice ha! Did you see this study from Yale? https://www.investopedia.com/news/every ... ale-study/
Thanks, but I'd rather take the advice of John Bogle, Warren Buffet and Nobel Prize winner Shiller than some random Yale economist.
"On the other hand, Tsyvinski's study stands in contrast with that of Nobel laureate Robert Shiller, who suggested in May that bitcoin is a failed experiment and 'another example of faddish human behavior.' "
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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Jon_PassiveInvestor
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Re: Who’s Buying Bitcoin?

Post by Jon_PassiveInvestor » Thu Jan 16, 2020 4:25 pm

watchnerd wrote:
Thu Jan 16, 2020 4:12 pm
Jon_PassiveInvestor wrote:
Thu Jan 16, 2020 4:04 pm
watchnerd wrote:
Thu Jan 16, 2020 3:58 pm
Jon_PassiveInvestor wrote:
Thu Jan 16, 2020 3:57 pm
I’m thinking 60/20/20 for allocation across bit, eth, and Ltc. I’ll be buying and holding for years to come.

Thoughts?
Ask on Reddit.

Not here.
Good advice ha! Did you see this study from Yale? https://www.investopedia.com/news/every ... ale-study/
No, but the headline sounds like click bait and, on the surface, idiotic.

I'd never put 6% of my portfolio in Bitcoin.

If a seven figure port, that's hundreds of thousands of dollars in Bitcoin.
Yup the 6% was scary!

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