Revisiting Bitcoin Investment Strategies

After the article was published on Friday, many readers expressed their views on long-term holding. It can be felt that many readers have a certain resistance to this approach, or even if they accept it, they will more or less make some compromises in their operations.

I understand this mentality very well.

In fact, my thoughts on long-term holding did not come about overnight; they gradually leaned towards acceptance after a period of reflection and comparison.

A long time ago (around 2017 or 2018), I heard some old players in the ecosystem suggest holding Bitcoin without selling.

However, at that time, facing such a volatile asset, I thought that holding it without action was a waste of resources and opportunities, and that doing so would lead to very low capital efficiency.

At that time, I was a bit cautious: although I also engaged in buying low and selling high, the funds I sold from Bitcoin would not be used to buy other assets, but would instead be used to buy Bitcoin again in the future. Plus, I was quite lucky back then; after selling high, I could still buy back at a lower price. As a result of these operations, I did accumulate more Bitcoin.

So, at that time, I looked down on the idea of holding without action.

However, in the past two years, after seeing more and more summaries of experiences from senior investors, I increasingly felt that the buy low and sell high experiences were just luck and not sustainable.

In the last bull market, my regular selling of Bitcoin and Ethereum started after they fell 20% from their peak.

Many readers remember that the last bull market had a double top, with the second peak being the true top of the entire bull market. The first peak was followed by the sharp drop on May 19.

In the May 19 crash, both Bitcoin and Ethereum fell more than 20%. According to my selling criteria at that time, I should have started selling after the May 19 crash.

The reason I didn't do that was that I was lucky enough to participate in the second major innovation of the Ethereum ecosystem, which was about to rise, namely NFTs. At that time, the NFT ecosystem was just emerging, but there were already strong signs. So I was quite confident that the bull market would continue and had not yet come to an end.

But if I hadn't been so lucky that year, and hadn't participated when the NFT trend just started, or even if I had participated but didn't feel the strong signs and didn't have that strong confidence that the bull market was still ongoing, I might have thought that the crypto ecosystem's market had ended after the May 19 crash and would have started selling as planned.

In that case, when the second wave of a real big market was about to come, would I be flustered and at a loss? It's hard to imagine.

The same reasoning applies: when the second peak arrives and drops 20%, if I start selling and the Ethereum ecosystem sees a third innovation leading to a third peak, what would I do? It's also hard to imagine.

Now, looking back at these situations and reviewing all the possible scenarios at that time, I feel that if the funds used for heavy investment are idle and do not affect my life, as long as the market is not too outrageous, the best method is still to hold long-term without action, as long as the assets held have potential and a future.

The biggest advantage of this method is that you won't be left behind; the biggest disadvantage is that it takes time and can be quite grueling, causing holders to endure loneliness, solitude, and the psychological impact of market declines for a period.

However, for crypto assets, which appear once in a thousand years and change the financial landscape of humanity, being left behind is the biggest risk, the greatest misfortune, and the greatest pain.

Compared to this risk, misfortune, and pain, a little inner loneliness and solitude are nothing.

Some readers ask me if I would still do regular investments and selling now?

I would definitely do regular investments in Bitcoin and Ethereum.

As for regular selling of Bitcoin and Ethereum, that is really uncertain.

I might sell, but selling would only happen when the price is extremely outrageous. By "extremely outrageous," I mean when the price is so high that various media have to follow suit and boast about it, and people outside my circle start inquiring about buying.

I might also not sell, even if the price is slightly high, but as long as it is not too outrageous, I might not sell at all.