Goal : Accumulate 12 BTC as soon as possible.
Progress [August 2019]: 13.2 %
This is a live document which I update very often with new ideas.
As mentioned here I am expecting the new Parabolic Bitcoin Bull run to take place around 2024. However based on the halving theory we should expect another Bull run around 2020 in the best case. I am not sure it will play exactly like this given the strength of the previous Bull run but I need to have a plan anyway and I like to plan based on the worst scenario rather than the best.
My goal is to take 30 % profit once BTC reaches $50.000 , 30 % profit once BTC reaches $100.000 and keep the rest 40 % for the future. Once the price goes to these high levels maybe we will have to think in terms of BTC instead of USD/Euro.
Currently my only income comes from my day job so I will be assigning a part of it on BTC.
I am currently writing a post that goes through my income distribution on various investments and this post will shed more light into it.
Making a long term plan like this does not give a great satisfaction since a small amount of fiat is dedicated every month in order to buy a small amount of BTC. Also it is the nature of BTC that makes this adventure risky as at any point it can break down. In addition at the moment there is not at all any upside movement in order to make this grind a bit more exciting. I predict it to be a long grind which I will document in this frequently updated post.
There is also the difficulty of maintaining the secret keys intact for a period of 5 years which i regularly think about. I have not found any great solution to this yet but I am brainstorming about which would be the ideal way to store them.
Unfortunately I have to purchase BTC with fiat since I suck at trading and I do not want to risk losing what I have already invested. There are some clever guys out there that accumulate only by trading but that is not for me, at least for now.
I will not explain again in this post why I believe that there will not be a Parabolic bull run at the 2020 halving. To summarize everyone knows of the next halving and it will be pretty obvious that this scenario plays as exactly as everyone is expecting. Everyone at the moment is pricing in that the next bull run will take place in or around 2020. [ This view is probably influenced by the fact that we have being through a horrible bear market but I am inclined to Change my opinion if the Price allows it. ( 05.04.19)].
I expect that the halving in 2024 will be the catalyst of the next Parabolic bull run since by then the whole Bitcoin infrastructure will have matured, having a history of 15 years behind it and with the help of Lightning Network enabling small payments or a similar solution if Lightning Fails to scale.
My goal is to accumulate 12 Bitcoins by the end of 2024. That means that I will be buying around 2 bitcoins per year for 6 years in total. I already bought a hardware wallet and in addition I will be using a mobile wallet for small amounts and some small amount on exchanges during the accumulation. However if it turns out that I cannot afford 2 BTC per year I have to reduce the number as we move out of the bear market.
I expect the price to be around $1500 – $8000 up until 2020 [ edit 30.05 It is already 06.19 and this prediction became wrong as the price went over 8700 something that makes me adjust the total model/estimation] and I will be buying more as the price reaches my lower limit.The $6000 acted as a strong support during 2018 so I am expecting it also to be a strong resistance on the way up [edit 19.05 so far 6000 was destroyed easily]. I have no idea what the price is going to be later as anyone else but with today’s data and given my budget I think the
0.15 BTC 500 to 800 Euro monthly allocation is something that I can afford. This of course will change in the future once the Bitcoin price starts rising again but for now ( 04.19 ) my monthly budget is around 500 to 800 Euro which equals 0.15 BTC. I think however that until 2020 we will not go higher than $9000.[ edit 19.05 we almost did so I guess the last sentence will be invalidated soon]
As far as shitcoins go, I have currently no open position. I am expecting them to slowly dissapear once people realize what a scam they are. As mentioned earlier I am not good at trading so I am trying to avoid it as much as possible.
[04.2019] Scammers are actively trying to trick the masses into buying shitcoins so it can be that the altcoins are here to stay longer, as long as BTC price is volatile.
[04.2019] I decided to purchase 1 BNB per month as this is the only shitcoin that I am comfortable that will multiply in value during the next years. I already bought 36 BNB at once. [06.2019] I decided to stop doing the monlthy BNB purchase. I am at the moment satisfied with the 37 BNB I have. If it moons in a couple of years then good, if not, bad.
[07.2019] I decided to just sell all BNB for BTC since I could not reach my monthly BTC goal anymore.
I am expecting a phase where Bitcoin price will be around $1500, but maybe that is my inner Bear that does the talking.If this phase comes I assume that this will be a desperation phase where most of people will have lost their conviction for the future of Bitcoin. I am also seeing myself being psychologically affected by such a price drop however I will stick to my plan and buy aggressively. Edit: 04.2019 After editing this post after 3 months if initially writing it I am not even sure that the above scenario will play out.
Below is my currently scheduled plan which will be subject to modification according market reactions.
In the case that a Bull run would seem to start I will stop buying as scheduled and start selling instead. My goal again is to have around 12 additional bitcoins by the end of 2024. Below is the base plan that I have in mind. I will however deviate from it a bit as described in the modifications. I will keep updating this scenario as well so that in the future I have a reference and be able to see how well I performed in comparison with it.
Theoretical Scenario of buying the same amount each month. I also update this chart every month with what I have actually purchased. Sometimes I will purchase some amount of BTC that is not scheduled in order to achieve my goal faster.
|02.19 – done||0,15||0,3||0,3|
|03.19 – done||0,15||0,45||0,45|
|04.19 – One time buy||0.3477||0.9477|
|05.9 – done||0,15||0,75||1.0977|
|07.19 – done||0,15||0.15||1.4|
|08.19 – done||0,15||0.18566211||1.58566|
|09.19 – in progress||0,15|
|11.24 – Already bought at 04.19||0,15||11,90|
|12.24 – Already bought at 04.19||0,15||12,15|
|72 months||12,15 BTC|
Modification 1 – Deprecated
edit [27.03.2019] – Rereading the whole paragraph below after a couple of months of writing the first version of the article does not make much sense anymore. It makes the whole strategy complicated and I like to keep things simple by just accumulating almost the same amount every month, therefore i will not be following anymore what is mentioned below.
One week after I have written this post I was looking at the bitcoin historical chart and I had the following idea. I took the major support areas of the previous years and charted them below. You can see the price around these areas are around $3000, $1800 and $900. So I was thinking that I will continue averaging down as originally planned but I needed to take into consideration these 3 significant support/resistance price areas. The big question is if that these areas are reached at all in the future. Because if they are not reached the plan that I am about to write will be useless so I need to take into consideration the case where these prices are not reached. Edit As of 02.04.2019 it seems that these Levels below will not be reached so I will need to slightly modify my plan. We currently experience a jump of BTC Price from 3800 to 5000. Why it is important to consider these 3 price areas other than their historical significance ? Because it is not the same if I buy bitcoin around $900 and If I buy around $3000. I get around 3 times more bitcoin when I buy around $900 in case the price is of course reached. So the point is to delay buying at $3000 so that I can buy 3 times around $900. But how do we do that ? First let’s note that in the whole post I made the assumption that the price of bitcoin will reach lows around $1000. If it happens and the BTC price goes much lower then the whole model described above does not make much sense. So we need to think of a way to buy or to delay buying bitcoin according to the current price and these three future resistance areas. We also want to buy more when the price is near $900 ( which according to our model is around the lowest the price could go) and buy around 3 times less when the price is around $3000. ( which is about 3x 900 ). At the same time however we do not want to wait for something that potentially never happens, for example bitcoin reaching $700. So an example scenario would be : we avoid buying at the current level of say $2000 because we expect that the price will go lower at $1000 but we are wrong and the price begins to skyrocket so we are left with nothing because we were expecting to buy on lower prices that never came. We need then to assign a probability at our current scenarios which are the following. Also we need to adjust this probability monthly since we update our model once per month. Also a monthly adjustment is required since the price of $BTC will eventually start moving upwards but since we are now in a downtrend movement the following will do: Monthly Probability Chart – To be updated at the end of each Month 0 < $BTC < 800. – 10 % probability of that happening – action: Buy full amount
800 < $BTC < 1800. – 30 % probability of that happening – action : Buy full amount / 2
1800 < $BTC < 3200. – 60 % probability of that happening – action: Buy full amount/3
In addition I would like to cover the case that I am wrong and that there will be indeed a bull run in 2021, at the next halving. As i am writing my thoughts a lot of scenarios play in my mind that should be considered. But I would like in this phase to forget about this scenario and talk about it in the next modification, so I will continue will the current Modification 1 and talk about the 2021 Bull run scenario in the future. So for now we have considered the worst scenarios that are about to happen and we want to adjust our buying strategy. With the initial assumption we would buy 0.15 $BTC per month. However with these additional scenarios in mind it would make sense to adjust this 0.15 according to the current price and the projection of the future price. So what I am about to do is that I will be buying less than 0.15 BTC monthly and the amount that remains I will put in on open limit order near the next support area since we are in a fully bear market. If the limit order is not executed until the next scheduled buy is due , the amount that is on the limit buy I will transfer and buy at the current month Calculation: Amount to buy monthly <= 0.15 BTC. The remaining amount will be transferred to be bought in a future date. If the current Bitcoin price were $800 ( which is the lowest according to our model) we would buy the maximum monthly allocated 0.15 $BTC. Since there is 10 % chance the price will go under 800 where we would buy the full amount , 30 % chance the price will go around 1800 where we would buy the half of full amount and 60% that the price would be around 3200 we have the following numbers: 0.1 x 0.15 + 0.3 x 0.15/2 + 0.7 x 0.15/3 = 0,0725 So instead of buying the full 0.15 we originally allocated as a monthly buy, we will buy 0.0725 instead and the remaining 0.0775 will be transferred and be bought in a future date. However what will happen if the price continues to rise ? That means that the next month we will have to buy Bitcoin more expensive. However if the price continues to fall it means we will have saved some of our capital to buy it cheaper. So the question that comes next is for how long should we continue avoid buying the maximum amount we are willing to dedicate each month ? The remaining 0.07681 that I would have bought if I followed the original plan I have placed in a limit order if the $BTC price reaches the support around $3240. I chose the $3240 support since this is a level I am happy with to buy given the current market. This is the strategy as of now and I will update it If I have some better idea during the next days or in February!
I will allow myself instead of just buying at the last day of each month as originally thought, to be able to buy during the whole month. I can chose the day that I buy. Also if I think that during a month the price is low I can forward buy for the next month. However I do not want to overdo it so I will limit myself only buying maximum for 1 month distance. For example if it is February I can buy maximum during February for March.
Edit[28-04-19] : This modification is deprecated. No trading. I will allow myself to trade again once we break the all time high around 20.000. this will be the safest bet as I suck at trading. I will only long with x2 leverage on Bitmex.
Original Idea: Since Modification 2 allows me to buy Bitcoin during any day of the current month I thought of the following : I could trade the amount that I allocated to the current Month in order to trade it. That means I could buy for example 0.15 once BTC price is let’s say for example $3000 and then trade it in the same month in the hope that I can increase this amount by month’s end.
Modification 4 – Deprecated
Edit[14-04-19]: I decided to no longer trade on USA markets as I suck at it and the more I trade the more I lose. I transferred all the Money I had on USA markets except 1300 euro and converted them to BTC.
thought of a modification what will allow me to reach my goal of gathering 12.5 BTC by 2024 faster. Since I am speculating in the USA stock market I will be using a part of my profit into buying BTC. The current plan is that once and If I become profitable I will be using the 1 / 3 of the profit into buying Bitcoin.
Modification 5 – Deprecated
.2019 I decided to not do the below as it is risky. Instead I will be bying 1 BNB per month as mentioned here. I think of something which can be risky, but I can put the BTC that I have already acquired and they sit doing nothing to work. For example I can use the January part in order to buy BNB and wait until the price appreciates and then sell back for BTC. I think that at the moment the BNB is the only coin that has decoupled from BTC. I expand on this thought on the May/April post.
Up to Date Summary – July 2019