Last night a friend messaged me, asking what I thought about the recent Bitcoin exchange rate volatility. He was wondering - should he invest now? Would it keep going up?
Now, my friend is a smart guy, but his timing has always been awful. He was a mortgage agent right as the housing market imploded. Then he got into gold right as it plateaued. And now he’s looking at Bitcoin.
I remember reading a quote (that I can’t find online despite my best googling, so consider this apocryphal and most likely mis-told) about a stock market tycoon who was walking into his building one day, and was stopped by the doorman. The doorman, all smiles, wanted to tell the tycoon that he had just bought a condo as an investment.
The tycoon liquidated his real estate holdings the next day. He said, “When a doorman is investing in a market, it’s time to get out.”
The time of maximum pessimism is the best time to buy and the time of maximum optimism is the best time to sell.John Templeton
I believe in Bitcoin. It’s advantages over fiat currency are not related to it’s exchange price. And it has shown that it can survive a market crash already.
But too many people are getting into Bitcoin purely as an investment. To them, Bitcoin is no different than natural gas, oil, or gold - an investment that they WILL dump when they feel they’ve made enough money.
I think that time is coming, and soon.
Today I plan to sell 20% of my bitcoins. Its not a huge amount, but it’s enough to cover my initial purchases, even if the market totally craters, while still leaving me plenty of room to enjoy the market if it keeps going up.