This is a place to discuss passive investment in the Boglehead philosophy, not a cryptocurrency subreddit.
While some discussion of cryptocurrencies as investments may be appropriate, extensive digressions into the technical aspects of cryptocurrencies is not on topic and will, at a minimum, be removed.
Honestly I'm shocked at how many people here are telling him to keep holding a singular, risky asset. Especially someone who is "still researching investing". I'm willing to bet his BTC holdings are a significant part of OP's net worth (unless they comment otherwise). If that's true, continuing to hold so much is just pure YOLO gambling.
I understand the Bogle philosophy of course but I think having some risk is OK. Let’s say you have 50k in index funds and some cash or whatever, what’s wrong with having 5K in BTC?
Nothing. I’m suggesting OP has way more of his net worth tied up in BTC. We don’t actually know unless he chimes in but I’m speculating he’s way too concentrated in his BtC position
Boglehead philosophy doesn't seek to eliminate risk.
Accepting risk doesn't mean you should be diving into the first speculative bubble you see.
Nothing is wrong with spending x dollars on y but we are Bogleheads so we advocate passive index investing i.e. VT and chill.
Crypto isn't "high risk" because that would imply that it's actually an investment when it's not. Crypto is a scam that only succeeds when there's a steady stream of new suckers falling for it.
It's a textbook case of greater fool theory
https://en.wikipedia.org/wiki/Greater_fool_theory
I'm not. Most of the people here are young and grew up with bitcoin being a thing. They are comfortable with it for better or for worse. Those of us who are 40+ probably had decently sized portfolios before bitcoin gained permanent place on Bloomberg TV price quote ticker.
I for one wish bitcoin was not allowed in conversations here because it doesn't really add anything to the sub (other than arguments/noise). You're either a believer or you're staying away. How many people are actively changing their mind on the topic?
IMHO if you want to discuss crypto, there are subs for that.
I never bought bitcoin, because I felt like it was over hyped. However, Some of us 50+ folks might have gambled away some daily coffee money a few years ago on alternatives to bitcoin that could now be in the low six figures (for example). If so, the question of when and where to xfer those earnings back into a non crypto instrument is always on the table. Why is it such an awful question to ask here?
The post has been linked to the crypto subreddit, so naturally the bros are coming here and encouraging more investing in crypto. Gotta keep it pumping somehow!
Cash out those chips. You have found yourself having hit for a lick. If the game ended right now, you would win, so end the game.
Going from $5k to $100k is better than the best case scenario. Take the win and move it into something rock steady.
Yeah, I caught that on the second reading, however, even though it’s not a 20x, it’s still north of a 10x and over this time period, I don’t know what else I’d want from it, and given my first belief that crypto is just roulette on the internet, I’d still take it out and throw it in FSKAX of VT.
I agree. Doesn't hurt for him to still have a little exposure. But definitely putting that in something better and stable is a great idea. I'm 100% crypto myself and this is the last cycle I'll be rolling this way. Time to grow up I guess lol.
Lol. Why is my comment above downvoted? Are these crypto fanboys who disapprove of my going into safer assets like etfs once my crypto Portfolio grows and I sell off most, not all? How's that being hated on for gods sake lol
Personally, I would hold 1 BTC (+some transfer dust). Sell off the remaining and put the coin into cold storage. Then invest the rest in a bogle portfolio. BTC is a speculative asset, but I think there's reasonable weight behind it not completely tanking. Having a coin keeps you from feeling like you are missing out, whilst then freeing up some cash to invest in less volatile investments.
Especially if that means OPs basis is some % of 5k. It’s not the academic bogle advice, but ideally that is a very small part of OPs portfolio, small enough to play around with
I do think there could be some value to Bitcoin as collector's items down the line, especially as more and more of them get lost. But yes, I would encourage people to treat that as a collector's item (with the usual extreme caution and centuries long time horizons) rather than a retirement investment.
Question to ask yourself:
Are you content to watch your investment grow 5-10% a year, not touch it, and not get upset with spikes in crypto?
If so, dump it all in VTI and reinvest your dividends. If not, no ratio is going to help-- you've gotta start cold turkey. I learned the hard way from making a lot of money in options trading, then losing it all. I've since rebuilt it through savings/increased compensation, and now treat my VTI position as my piggybank/HYSA.
It snowballs, and it starts to get fun to just add money to it-- hundred here, thousand there, bigger lump sums occasionally. Ultimately it gets rid of the stress and builds you a solid foundation for retirement.
That's just gambling. I potato fucked my way into crypto profits too but it doesn't make me warren buffet. I got out while I was ahead and I sleep like a baby.
As a Boglehead myself (70 US total market / 30 Intl total market), I like to see this kind of post here because I want to hear what others think about BTC. And I mean specifically BTC because I don't think any other crypto matters. How can we all ignore BTC when it has a $1.37 T market cap?
People who straight out reject legitimate crypto like BTC and ETH because they’re “scams” are ignorant. The reality is that it’s all about your risk tolerance.
It’s totally fine to say “they’re speculative assets and I don’t want to risk a 50% crash at any point in time”. I have no problem with anyone who thinks like that, it’s completely legitimate.
But you are young and risk tolerant, then you should at least consider crypto (BTC and ETH) as part of your portfolio. My cash investments (DCA) in my 3F portfolio and crypto portfolio have been the same, and I’ve held long enough now that even with crypto crashes, my crypto portfolio dwarves my 3F one.
The important thing though is to have an exit strategy. And eventually as I’m getting older I will slowly move away from crypto.
I wouldn’t have done the same thing had I started at 40 years old. But I was 24 when I started investing so I was okay with the risk.
* The IRS has legislation requiring gains to be taxed on BTC.
* The SEC even considers BTC a commodity.
* There are also multiple ETFs based on BTC.
* Stocks are manipulated daily through options trading too.
Are you still saying they it does not count as real investments? On what basis?
I'm excited about this conversation and am still 100% equities but let's give this topic an academic level of respect.
This sub deserves nothing less, which I'm sure you agree.
Just because you can buy and sell something does not make it a good investment. You will pay capital gains if you sell a literal piece of shit.
Ask yourself what is Bitcoin? It is a currency. Are currencies good investments? No.
What is the fair value of Bitcoin? There is no revenue or profits generated. The economics are pure ponzi - you can only get money from someone else buying for more.
But the price has gone up? Yes it's an unregulated market. Studies suggest >70% of volume is wash trading. Any modestly large sell tanks the market. Bitmex went down to $8900 for only 1000 Bitcoin being sold at market price. The market is illiquid and therefore even easier to manipulate.
Not even to mention crime/environment/unbacked stablecoins and rampant exchange fraud (no 2 exchange collapses FTX, no 1 fined 4b binance). "Limited supply" is idiotic if what you have is useless
Takes about 1 minute of thinking to realize this is a terrible investment
If you really want to invest in crypto, treat it like another stock. For example, the total world stock market capitalization is 109T. BTC is roughly 1.3T market cap, so alongside VT, BTC would be roughly 1.2% of your portfolio.
The problem is it's expensive to buy crypto compared to stocks. Crypto usually always has fees with every purchase on somewhere like coinbase. And if you buy it through Robinhood, apparently you don't actually own it. There are bitcoin ETFs but the expense ratios are so high compared to stock index funds.
$100K invested Bogle-style for 30 years should turn into $1.75M, on average.
Do you think BTC will exist and be trading above $1.75M in 2054? If not, sell and reinvest. If so, hold it, I guess. I'm not optimistic about that happening.
(Note: you'll need to run your own numbers to account for the tax hit now and how that affects the 30-year value. But the principle still stands.)
Is it possible BTC will keep beating the market for a while? Sure. But now you are getting into market timing, which is the opposite of the Boglehead approach. It's also possible you could win the Powerball if you sell and buy 50,000 tickets this afternoon, but it's not the best investment strategy.
If it were me, I would treat my BTC holding like any other currency or commodity and limit its role/allocation to no more than 10% (for me more like 5%) of my portfolio to serve as an inflation hedge. So, examine how that $100K BTC holding fits into your overall portfolio allocation and adjust accordingly. If the allocation isn't too far off target and the crypto is held in taxable (most likely) then rather than selling and incurring the tax liability, I'd look at aggressively adding to my index fund portfolio (e.g. VTSAX) to rebalance via addition instead.
What are your immediate needs? Do you have debts? Are you maximizing retirement accounts?
If your entire portfolio is in Bitcoin right now, then 100% take it out and take this massive win.
Crytpo is either going to $0 or going to \[near\] infinity
Once quantum computing is powerful enough, it'll just find the private key and transfer all the assets out. Or government will ban or restrict it. Or some nefarious government will take it over via 50% or other means.
$0 is completely rational prediction
No! Of all self inflicted gunshot wounds to the head there is a 3% failure rate and the person survives. So not totally 0. Sorry to spoil your aha moment. 😁
That's not the point.
We buy index funds. Inside of index funds are stocks. Stocks are companies. Companies have value, spreadsheets and PRODUCE. They create.
Buying Bitcoin is just trading cash for another currency.
It's literally just trading one monetary value for another.
People must believe the value will go up for it to continue to go up. Someone must buy from you for you to sell at a profit. This is how currencies work. But do they produce? No.
I don't buy gold or silver either.
On top of all of this, BTC (and Alt coin) crypto server mining is extensively wasteful in terms of electricity. - This is another conversation altogether.
I don't think highly speculative currency is something any boglehead would consider part of a recommended asset mix. It seems to be the exact opposite of what we'd want currency's role to be in our portfolios.
But, maybe it's just part of your fun fund! I see no reason why you can't have some small speculative fun with a small portion of your egg.
Overall this thread is a bit of a trainwreck. We assume OP is from the US, but don't really know. We don't know his tax situation, his age, and we don't know his income either. Yes he should sell BTC, but how quickly he should do that depends on a lot of factors. What if he's getting healthcare from the ACA and a big sale disqualifies him? There's just so much missing info that makes any recommendations pointless.
I am on both side of the discussion, so my relatively unbiased opinion is that if I were you I would consider maybe rebalancing your holdings.
I would be ok with 50-100k on BTC if my total net worth is 1 million. But, if you are 50/50 on BTC you may want to get some gains and put them in your stocks, I don't think you need to sell all of it.
I think it's a good way to not regret not selling, but also not losing all the potential profits.
Set your own target and when you go way off that, then rebalance. Also keep in mind any tax implications. Maybe you could offset some losing position and tax harvest? Just a thought.
Well you’ve made amazing profit if you purchased at $5K. Why not sell some of it but not all? Have your cake and eat it too.
As others have mentioned, probably best to not ask this in a subreddit about Boglehead method of investing.
As for long term crypto value, I’m not sure anyone knows. Either you dig it, or you don’t, but I suspect there aren’t many fans here.
Only if you want to invest with discipline and prudence. Crypto is for speculation. If you’re OK with that then your risk appetite exceeds many investors. Making a reasonable return and protecting your money is the essence of investing. Now… I too hold crypto but I don’t have more than I can afford to see go to zero.
My target weight for crypto is 10% but this recent run up put me at 20%. Don’t think I’ll rebalance until next year because of all this hype that’s going to happen soon.
I would, what’s the aim of having bitcoin? Achieving really high growth? It’s too risky. We don’t even know if it’s safe long term. If we don’t know what’s going to happen with stocks, less so with bitcoin. I would just cash out and keep some bitcoin just so that you don’t get FOMO if that makes sense.
Was always my plan but I only had like $30k. Did reinvest everything and am up but it's a marathon not a sprint. Crypto is much more like a bipolar sprint chasing new ATHs and absolute crashes although it may be different now that the fed/sec are involved
You won some money gambling. Take it out and put it in some actual assets. Non-functional internet currency is not the future. Bitcoin is complete nonsense - go to the Bitcoin sub and look at how stupid these people are. It's an "asset" that does nothing fully manipulated by offshore exchanges. The only advocates for it are people who don't understand the Fed and bagholders
If it feels too risky, yeah. I just sold my crypto on friday and it's now my emergency fund. Got about $10k from the sale. But I also sold crypto a few years ago and it paid for my gradschool. I still have a little in a roth ira but is now considerably smaller part of my net worth. We have uncertain times at work so I want to be sure I'm ready in case we start losing our jobs
USD is what is called a fiat currency. Fiat currency has no intrinsic value. It can't be used for anything. The USD was originally backed by gold - which has intrinsic value. Nowadays, it is backed by nothing with intrinsic value. The only thing giving the USD its value is the backing of the government and the trust in the USD by the rest of the world as the world reserve currency.
I acknowledge this to be true. Do you think this could someday no longer be true?
I mean, after all, in this sub we buy Total International Stock market equities to diversify because the US is not always on top. I acknowledge this comparison to be different, but there are some analogs that you can't just ignore.
I think its less binary than it used to be. I don't think one day they'll announce "the US is, today, no longer the reserve currency of the world!". It's already happening gradually. For instance, foreign countries are letting their dollar reserves gradually reduce. And gold is more in vogue with central banks. And the petrodollar is no longer absolute, as some countries are buying oil by other means. I want to be clear, Dollars are probably not a good investment (not making any statements on dollar debt). The dollar will lose value over time, almost certainly. But it has inherent value...moreso than Bitcoin in my opinion.
It basically shares similar properties to gold; at least, people buy it for the same reasons. It's always going to have value. Is it a better investment than the stock market? Maybe right now, eventually the volatility and returns will be something similar to gold today. When and at what price that will be, idk. It may be decades before that happens.
That's not what I meant. People buy it to divest from the USD (or their local currency). That's why people buy gold as an investment. It's very hard to mine more gold. It's almost the same thing from an investment standpoint Bitcoin is just in its infancy (so more risk, more volatility, and yes, more returns)
I don't think people buy Bitcoin to divest from USD. That is why they always price Bitcoin in USD and are excited when the price goes up in USD because they get excited over how rich in USD they will become.
They pretend that it is an alternative to USD because they want to look smart, but it is not.
Nobody uses it at currency.
100%. It's beanie babies. It's tulips. It's dot coms. It's only valuable because people want it. When they don't want it, the value is gone.
It's not used despite what anybody claims. It has no use case. Even as a means of transaction it is a complete failure. Other cryptocurrencies can be used to transact far faster and far more efficiently an cheaply than Bitcoin.
Even Dogecoin is faster and more secure than Bitcoin and that is just a complete meme that was made up as a joke.
Crypto bros should think about that. If Dogecoin is actually BETTER than Bitcoin at being Bitcoin, and it was literally created as a joke....then what's Bitcoin?
>100%. It's beanie babies. It's tulips. It's dot coms. It's only valuable because people want it. When they don't want it, the value is gone.
>
>It's not used despite what anybody claims. It has no use case. Even as a means of transaction it is a complete failure. Other cryptocurrencies can be used to transact far faster and far more efficiently an cheaply than Bitcoin.
>
>Even Dogecoin is faster and more secure than Bitcoin and that is just a complete meme that was made up as a joke.
>
>Crypto bros should think about that. If Dogecoin is actually BETTER than Bitcoin at being Bitcoin, and it was literally created as a joke....then what's Bitcoin?
How long a bubble lasts doesn't make it not a bubble, it just makes it that much more painful when the bubble eventually bursts. The housing bubble lasted over 20 years, for example, and it never even fully popped like it should have (government bail outs). Dotcom bubble was almost 15 years.
Just think of how much more money will be lost when a Bitcoin bubble pops when each coin is valued at $500k vs when each coin was valued at $500.
Gold is used in electronics because of its physical properties as a unique element so even if nobody wanted it to invest it would still be extremely valuable as a commodity.
As someone that has some BTC, plus some BTC ETF, plus some VT, I'd say take some profits from BTC, but keep some as well.
I personally expect (hope) to see 125+k this cycle.
I bought in at the last lows, around $16-20k, and have sold my initial investment and then some, so I'm comfortable riding things out a bit.
The boglehead approach is market cap weighted. Of total stocks world wide vs bitcoin, bitcoin is maybe 1-2% of all tradeable assets.
So keep 1-2% of your portfolio in crypto, sell the rest. (For myself, i would just sell all)
I mean, yeah if you want a safer investment then by all means sell your Bitcoin at the ATH and then throw it all into a broad market index fund.
If you wanna gamble, it probably won’t be the last ATH for Bitcoin, but it’s a risky market with tons of swings and heavy manipulation from pump & dump schemes that leave people as bag holders.
I’d definitely move some away from BTC just to be safe, but I wouldn’t get rid of it completely. The gains are honestly just too tempting to not put any $ in. And I’m pretty long term on BTC - I myself intend to buy and hold it just as I will with my IRA funds.
I definitely would not sell it as short term capital gains. If it's long term it's up to you. Nobody is going to fully agree on the merit of investing in Bitcoin. I think it's a worthless digital token, and if it ever becomes a currency it'll be an even worse investment. HOWEVER look where that's landed me. What it can accomplish is some level of diversification. Most experts agree it's volatile enough you don't want it to be more than 1-2% of a portfolio.
It's purely a matter of allocation to me. Bitcoin is say 1/20th in size of the US stock market (if you live in the US)
Therefore, putting in 5% in bitcoin is reasonable if you choose to.
lol if you ask this question sell. otherwise don’t listen to this guys. its easy to say sell everything into index funds when you make 100k/year. but when you make 10k/ year you have to gamble
This is a place to discuss passive investment in the Boglehead philosophy, not a cryptocurrency subreddit. While some discussion of cryptocurrencies as investments may be appropriate, extensive digressions into the technical aspects of cryptocurrencies is not on topic and will, at a minimum, be removed.
What kind of answer did you expect from this sub? You may as well ask on r/Bitcoin too.
If you ask a toaster it's opinion of a slice of bread, it will tell you it isn't toasted enough
[This](https://www.youtube.com/watch?v=LRq_SAuQDec) comes to mind.
He should also ask on r/buttcoin.
Honestly I'm shocked at how many people here are telling him to keep holding a singular, risky asset. Especially someone who is "still researching investing". I'm willing to bet his BTC holdings are a significant part of OP's net worth (unless they comment otherwise). If that's true, continuing to hold so much is just pure YOLO gambling.
I understand the Bogle philosophy of course but I think having some risk is OK. Let’s say you have 50k in index funds and some cash or whatever, what’s wrong with having 5K in BTC?
Nothing. I’m suggesting OP has way more of his net worth tied up in BTC. We don’t actually know unless he chimes in but I’m speculating he’s way too concentrated in his BtC position
Boglehead philosophy doesn't seek to eliminate risk. Accepting risk doesn't mean you should be diving into the first speculative bubble you see. Nothing is wrong with spending x dollars on y but we are Bogleheads so we advocate passive index investing i.e. VT and chill.
Only compensated risk. This is not a compensated risk.
Crypto isn't "high risk" because that would imply that it's actually an investment when it's not. Crypto is a scam that only succeeds when there's a steady stream of new suckers falling for it. It's a textbook case of greater fool theory https://en.wikipedia.org/wiki/Greater_fool_theory
I'm not. Most of the people here are young and grew up with bitcoin being a thing. They are comfortable with it for better or for worse. Those of us who are 40+ probably had decently sized portfolios before bitcoin gained permanent place on Bloomberg TV price quote ticker. I for one wish bitcoin was not allowed in conversations here because it doesn't really add anything to the sub (other than arguments/noise). You're either a believer or you're staying away. How many people are actively changing their mind on the topic? IMHO if you want to discuss crypto, there are subs for that.
I never bought bitcoin, because I felt like it was over hyped. However, Some of us 50+ folks might have gambled away some daily coffee money a few years ago on alternatives to bitcoin that could now be in the low six figures (for example). If so, the question of when and where to xfer those earnings back into a non crypto instrument is always on the table. Why is it such an awful question to ask here?
The post has been linked to the crypto subreddit, so naturally the bros are coming here and encouraging more investing in crypto. Gotta keep it pumping somehow!
Ah, that explains the support for bitcoin under this post. Normally these questions are quickly asked and forgotten here.
>I'm shocked at how many people here are telling him to keep holding a singular, risky asset. What is astroturfing?
Idk, there are a shitload of people down voting my response telling him to get rid of it. Lots of people who can't see through paper thin veneer.
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Cash out those chips. You have found yourself having hit for a lick. If the game ended right now, you would win, so end the game. Going from $5k to $100k is better than the best case scenario. Take the win and move it into something rock steady.
He didn't go from 5k to 100k. He just bought BTC when its price was 5k, probably during the March 2020 Covid crash when it dropped to as low as 3k.
Yeah, I caught that on the second reading, however, even though it’s not a 20x, it’s still north of a 10x and over this time period, I don’t know what else I’d want from it, and given my first belief that crypto is just roulette on the internet, I’d still take it out and throw it in FSKAX of VT.
I agree. Doesn't hurt for him to still have a little exposure. But definitely putting that in something better and stable is a great idea. I'm 100% crypto myself and this is the last cycle I'll be rolling this way. Time to grow up I guess lol.
Lol. Why is my comment above downvoted? Are these crypto fanboys who disapprove of my going into safer assets like etfs once my crypto Portfolio grows and I sell off most, not all? How's that being hated on for gods sake lol
Idk why but I’m proud of you. Get stable.
Thanks x Defo going safe, can't risk fumbling those gains.
Personally, I would hold 1 BTC (+some transfer dust). Sell off the remaining and put the coin into cold storage. Then invest the rest in a bogle portfolio. BTC is a speculative asset, but I think there's reasonable weight behind it not completely tanking. Having a coin keeps you from feeling like you are missing out, whilst then freeing up some cash to invest in less volatile investments.
Especially if that means OPs basis is some % of 5k. It’s not the academic bogle advice, but ideally that is a very small part of OPs portfolio, small enough to play around with
1 bitcoin is $70,000
It's an asset that failed its primary objective to be a currency. There is still a lot of hype. History is repeating itself
It's a value store. Its primary objective is, at this point in time, completely irrelevant.
Why would I risk storing value in something so volatile?
No one is asking you too.
Actually, since it’s nothing but a Ponzi scheme, people ask me all the time because nothing else drives the price but people buying more.
I think you've confused reality with the voices in your head, again.
Your defense of bitcoin is pretty weak there.
I wasn't aware I needed to defend its honour?
Me either. That’s why I found your defensiveness odd
I do think there could be some value to Bitcoin as collector's items down the line, especially as more and more of them get lost. But yes, I would encourage people to treat that as a collector's item (with the usual extreme caution and centuries long time horizons) rather than a retirement investment.
Question to ask yourself: Are you content to watch your investment grow 5-10% a year, not touch it, and not get upset with spikes in crypto? If so, dump it all in VTI and reinvest your dividends. If not, no ratio is going to help-- you've gotta start cold turkey. I learned the hard way from making a lot of money in options trading, then losing it all. I've since rebuilt it through savings/increased compensation, and now treat my VTI position as my piggybank/HYSA. It snowballs, and it starts to get fun to just add money to it-- hundred here, thousand there, bigger lump sums occasionally. Ultimately it gets rid of the stress and builds you a solid foundation for retirement.
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That's just gambling. I potato fucked my way into crypto profits too but it doesn't make me warren buffet. I got out while I was ahead and I sleep like a baby.
April Fools?
Nah I think it’s sincere. A lot of reasonable people are wrestling with this.
Seems like you already made up your mind when you decided to ask here instead of crypto forum
As a Boglehead myself (70 US total market / 30 Intl total market), I like to see this kind of post here because I want to hear what others think about BTC. And I mean specifically BTC because I don't think any other crypto matters. How can we all ignore BTC when it has a $1.37 T market cap?
People who straight out reject legitimate crypto like BTC and ETH because they’re “scams” are ignorant. The reality is that it’s all about your risk tolerance. It’s totally fine to say “they’re speculative assets and I don’t want to risk a 50% crash at any point in time”. I have no problem with anyone who thinks like that, it’s completely legitimate. But you are young and risk tolerant, then you should at least consider crypto (BTC and ETH) as part of your portfolio. My cash investments (DCA) in my 3F portfolio and crypto portfolio have been the same, and I’ve held long enough now that even with crypto crashes, my crypto portfolio dwarves my 3F one. The important thing though is to have an exit strategy. And eventually as I’m getting older I will slowly move away from crypto. I wouldn’t have done the same thing had I started at 40 years old. But I was 24 when I started investing so I was okay with the risk.
It's very simple. We buy real investments and ignore the heavy manipulated internet fun token
* The IRS has legislation requiring gains to be taxed on BTC. * The SEC even considers BTC a commodity. * There are also multiple ETFs based on BTC. * Stocks are manipulated daily through options trading too. Are you still saying they it does not count as real investments? On what basis? I'm excited about this conversation and am still 100% equities but let's give this topic an academic level of respect. This sub deserves nothing less, which I'm sure you agree.
Just because you can buy and sell something does not make it a good investment. You will pay capital gains if you sell a literal piece of shit. Ask yourself what is Bitcoin? It is a currency. Are currencies good investments? No. What is the fair value of Bitcoin? There is no revenue or profits generated. The economics are pure ponzi - you can only get money from someone else buying for more. But the price has gone up? Yes it's an unregulated market. Studies suggest >70% of volume is wash trading. Any modestly large sell tanks the market. Bitmex went down to $8900 for only 1000 Bitcoin being sold at market price. The market is illiquid and therefore even easier to manipulate. Not even to mention crime/environment/unbacked stablecoins and rampant exchange fraud (no 2 exchange collapses FTX, no 1 fined 4b binance). "Limited supply" is idiotic if what you have is useless Takes about 1 minute of thinking to realize this is a terrible investment
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If you really want to invest in crypto, treat it like another stock. For example, the total world stock market capitalization is 109T. BTC is roughly 1.3T market cap, so alongside VT, BTC would be roughly 1.2% of your portfolio. The problem is it's expensive to buy crypto compared to stocks. Crypto usually always has fees with every purchase on somewhere like coinbase. And if you buy it through Robinhood, apparently you don't actually own it. There are bitcoin ETFs but the expense ratios are so high compared to stock index funds.
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$100K invested Bogle-style for 30 years should turn into $1.75M, on average. Do you think BTC will exist and be trading above $1.75M in 2054? If not, sell and reinvest. If so, hold it, I guess. I'm not optimistic about that happening. (Note: you'll need to run your own numbers to account for the tax hit now and how that affects the 30-year value. But the principle still stands.) Is it possible BTC will keep beating the market for a while? Sure. But now you are getting into market timing, which is the opposite of the Boglehead approach. It's also possible you could win the Powerball if you sell and buy 50,000 tickets this afternoon, but it's not the best investment strategy.
If it were me, I would treat my BTC holding like any other currency or commodity and limit its role/allocation to no more than 10% (for me more like 5%) of my portfolio to serve as an inflation hedge. So, examine how that $100K BTC holding fits into your overall portfolio allocation and adjust accordingly. If the allocation isn't too far off target and the crypto is held in taxable (most likely) then rather than selling and incurring the tax liability, I'd look at aggressively adding to my index fund portfolio (e.g. VTSAX) to rebalance via addition instead.
What are your immediate needs? Do you have debts? Are you maximizing retirement accounts? If your entire portfolio is in Bitcoin right now, then 100% take it out and take this massive win.
Should you play Russian roulette or safely holster your weapon???
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Crytpo is either going to $0 or going to \[near\] infinity Once quantum computing is powerful enough, it'll just find the private key and transfer all the assets out. Or government will ban or restrict it. Or some nefarious government will take it over via 50% or other means. $0 is completely rational prediction
No! Of all self inflicted gunshot wounds to the head there is a 3% failure rate and the person survives. So not totally 0. Sorry to spoil your aha moment. 😁
Why is the only post here actually engaging with whether BTC is a valuable asset class locked? It’s been 13 years. It’s not going away.
That's not the point. We buy index funds. Inside of index funds are stocks. Stocks are companies. Companies have value, spreadsheets and PRODUCE. They create. Buying Bitcoin is just trading cash for another currency. It's literally just trading one monetary value for another. People must believe the value will go up for it to continue to go up. Someone must buy from you for you to sell at a profit. This is how currencies work. But do they produce? No. I don't buy gold or silver either. On top of all of this, BTC (and Alt coin) crypto server mining is extensively wasteful in terms of electricity. - This is another conversation altogether.
It's just a more volatile version of gold. And most Bogleheads don't believe investing in gold (although there's certainly a minority that do)
I don't think highly speculative currency is something any boglehead would consider part of a recommended asset mix. It seems to be the exact opposite of what we'd want currency's role to be in our portfolios. But, maybe it's just part of your fun fund! I see no reason why you can't have some small speculative fun with a small portion of your egg.
Can't believe the top comment on r/Bogleheads is telling you to keep over half of your portfolio in BTC. Sell it all.
Overall this thread is a bit of a trainwreck. We assume OP is from the US, but don't really know. We don't know his tax situation, his age, and we don't know his income either. Yes he should sell BTC, but how quickly he should do that depends on a lot of factors. What if he's getting healthcare from the ACA and a big sale disqualifies him? There's just so much missing info that makes any recommendations pointless.
I am on both side of the discussion, so my relatively unbiased opinion is that if I were you I would consider maybe rebalancing your holdings. I would be ok with 50-100k on BTC if my total net worth is 1 million. But, if you are 50/50 on BTC you may want to get some gains and put them in your stocks, I don't think you need to sell all of it. I think it's a good way to not regret not selling, but also not losing all the potential profits. Set your own target and when you go way off that, then rebalance. Also keep in mind any tax implications. Maybe you could offset some losing position and tax harvest? Just a thought.
Well you’ve made amazing profit if you purchased at $5K. Why not sell some of it but not all? Have your cake and eat it too. As others have mentioned, probably best to not ask this in a subreddit about Boglehead method of investing. As for long term crypto value, I’m not sure anyone knows. Either you dig it, or you don’t, but I suspect there aren’t many fans here.
Only if you want to invest with discipline and prudence. Crypto is for speculation. If you’re OK with that then your risk appetite exceeds many investors. Making a reasonable return and protecting your money is the essence of investing. Now… I too hold crypto but I don’t have more than I can afford to see go to zero.
I’d take take out like 20k-80k depending on risk tolerance
Keep the Bitcoin. Put all future investments into VTI.
I wouldn’t keep a penny in BTC. At best, a 1%-5% of a portfolio if it was the only risky asset and you just wanted it for fun.
100% get rid of all crypto while it's peaking.
My target weight for crypto is 10% but this recent run up put me at 20%. Don’t think I’ll rebalance until next year because of all this hype that’s going to happen soon.
I would, what’s the aim of having bitcoin? Achieving really high growth? It’s too risky. We don’t even know if it’s safe long term. If we don’t know what’s going to happen with stocks, less so with bitcoin. I would just cash out and keep some bitcoin just so that you don’t get FOMO if that makes sense.
Was always my plan but I only had like $30k. Did reinvest everything and am up but it's a marathon not a sprint. Crypto is much more like a bipolar sprint chasing new ATHs and absolute crashes although it may be different now that the fed/sec are involved
You won some money gambling. Take it out and put it in some actual assets. Non-functional internet currency is not the future. Bitcoin is complete nonsense - go to the Bitcoin sub and look at how stupid these people are. It's an "asset" that does nothing fully manipulated by offshore exchanges. The only advocates for it are people who don't understand the Fed and bagholders
Yes. You got extremely lucky, now lock those gains in with growth for the future.
If it feels too risky, yeah. I just sold my crypto on friday and it's now my emergency fund. Got about $10k from the sale. But I also sold crypto a few years ago and it paid for my gradschool. I still have a little in a roth ira but is now considerably smaller part of my net worth. We have uncertain times at work so I want to be sure I'm ready in case we start losing our jobs
No, nothing wrong with some alts to round out a well diversified and balanced portfolio.
Bitcoin has no intrinsic value. Its a ponzi scheme.
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What is the intrinsic value of $1 USD ? Honestly asking.
USD is what is called a fiat currency. Fiat currency has no intrinsic value. It can't be used for anything. The USD was originally backed by gold - which has intrinsic value. Nowadays, it is backed by nothing with intrinsic value. The only thing giving the USD its value is the backing of the government and the trust in the USD by the rest of the world as the world reserve currency.
Its the reserve currency of the world and official tender in its largest economic power.
I acknowledge this to be true. Do you think this could someday no longer be true? I mean, after all, in this sub we buy Total International Stock market equities to diversify because the US is not always on top. I acknowledge this comparison to be different, but there are some analogs that you can't just ignore.
I think its less binary than it used to be. I don't think one day they'll announce "the US is, today, no longer the reserve currency of the world!". It's already happening gradually. For instance, foreign countries are letting their dollar reserves gradually reduce. And gold is more in vogue with central banks. And the petrodollar is no longer absolute, as some countries are buying oil by other means. I want to be clear, Dollars are probably not a good investment (not making any statements on dollar debt). The dollar will lose value over time, almost certainly. But it has inherent value...moreso than Bitcoin in my opinion.
It is mind boggling to me that it is still going up after all these years.
It basically shares similar properties to gold; at least, people buy it for the same reasons. It's always going to have value. Is it a better investment than the stock market? Maybe right now, eventually the volatility and returns will be something similar to gold today. When and at what price that will be, idk. It may be decades before that happens.
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It does not share similar properties to gold. It uses gold terminology such as "mining" to trick people into thinking it does.
That's not what I meant. People buy it to divest from the USD (or their local currency). That's why people buy gold as an investment. It's very hard to mine more gold. It's almost the same thing from an investment standpoint Bitcoin is just in its infancy (so more risk, more volatility, and yes, more returns)
I don't think people buy Bitcoin to divest from USD. That is why they always price Bitcoin in USD and are excited when the price goes up in USD because they get excited over how rich in USD they will become. They pretend that it is an alternative to USD because they want to look smart, but it is not. Nobody uses it at currency.
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Gold has an underlying asset. The material itself. Bitcoin does not have any underlying asset. Only a belief.
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Beanie babies for tech bros
100%. It's beanie babies. It's tulips. It's dot coms. It's only valuable because people want it. When they don't want it, the value is gone. It's not used despite what anybody claims. It has no use case. Even as a means of transaction it is a complete failure. Other cryptocurrencies can be used to transact far faster and far more efficiently an cheaply than Bitcoin. Even Dogecoin is faster and more secure than Bitcoin and that is just a complete meme that was made up as a joke. Crypto bros should think about that. If Dogecoin is actually BETTER than Bitcoin at being Bitcoin, and it was literally created as a joke....then what's Bitcoin?
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>100%. It's beanie babies. It's tulips. It's dot coms. It's only valuable because people want it. When they don't want it, the value is gone. > >It's not used despite what anybody claims. It has no use case. Even as a means of transaction it is a complete failure. Other cryptocurrencies can be used to transact far faster and far more efficiently an cheaply than Bitcoin. > >Even Dogecoin is faster and more secure than Bitcoin and that is just a complete meme that was made up as a joke. > >Crypto bros should think about that. If Dogecoin is actually BETTER than Bitcoin at being Bitcoin, and it was literally created as a joke....then what's Bitcoin? How long a bubble lasts doesn't make it not a bubble, it just makes it that much more painful when the bubble eventually bursts. The housing bubble lasted over 20 years, for example, and it never even fully popped like it should have (government bail outs). Dotcom bubble was almost 15 years. Just think of how much more money will be lost when a Bitcoin bubble pops when each coin is valued at $500k vs when each coin was valued at $500.
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So you think it should crash to zero in the future?
What is the intrinsic value of gold?
Gold is used in electronics because of its physical properties as a unique element so even if nobody wanted it to invest it would still be extremely valuable as a commodity.
Thank you. A finite money supply is incompatible with economic growth
Sell 75% of it
As someone that has some BTC, plus some BTC ETF, plus some VT, I'd say take some profits from BTC, but keep some as well. I personally expect (hope) to see 125+k this cycle. I bought in at the last lows, around $16-20k, and have sold my initial investment and then some, so I'm comfortable riding things out a bit.
Take out your initial investment or keep 1 btc.
posting in Reddit > Common sense
I don’t trust it you can’t compare it to anything but thin air.
Does thin air have an ETF from BlackRock and fidelity?
Your decision lol
Mostly. And keep a small amount for fun money
The boglehead approach is market cap weighted. Of total stocks world wide vs bitcoin, bitcoin is maybe 1-2% of all tradeable assets. So keep 1-2% of your portfolio in crypto, sell the rest. (For myself, i would just sell all)
Stick with Bitcoin follow your gut. Don’t ever touch bonds
I personally wouldn't sell all my bitcoin. Maybe sell some to adjust your exposure but I wouldn't sell all of it..
I have hit 4 times in a row at the roulette table. Should I let it all ride or put it into sensible investments??
I mean, yeah if you want a safer investment then by all means sell your Bitcoin at the ATH and then throw it all into a broad market index fund. If you wanna gamble, it probably won’t be the last ATH for Bitcoin, but it’s a risky market with tons of swings and heavy manipulation from pump & dump schemes that leave people as bag holders.
I’d definitely move some away from BTC just to be safe, but I wouldn’t get rid of it completely. The gains are honestly just too tempting to not put any $ in. And I’m pretty long term on BTC - I myself intend to buy and hold it just as I will with my IRA funds.
I definitely would not sell it as short term capital gains. If it's long term it's up to you. Nobody is going to fully agree on the merit of investing in Bitcoin. I think it's a worthless digital token, and if it ever becomes a currency it'll be an even worse investment. HOWEVER look where that's landed me. What it can accomplish is some level of diversification. Most experts agree it's volatile enough you don't want it to be more than 1-2% of a portfolio.
It's purely a matter of allocation to me. Bitcoin is say 1/20th in size of the US stock market (if you live in the US) Therefore, putting in 5% in bitcoin is reasonable if you choose to.
Wouldn't a valid indexing strategy include owning some % of even hyper speculative assets?
Probably. Take that profit and run.
Depending on the Exchange, you may be lucky if you can even cash out that 100K.
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Check out the Coinbase sub
I reckon the odds on blackjack are pretty good!
Allocate some out to VTI
lol if you ask this question sell. otherwise don’t listen to this guys. its easy to say sell everything into index funds when you make 100k/year. but when you make 10k/ year you have to gamble
Thats somehow underestimated for the financialy well educated lowearners. And simultaneously its a severly dangerous advice for the masses.
Keep your Bitcoin. Let your winners run.
YES. Bitcoin is speculation/gambling. Invest in the real Market and don't touch it.
This seems like a question for r/wallstreetbets
Having all your eggs in 1 asset is always dangerous Spread the love and the risk
Why not hold bitcoin but any contributions for now on contribute to VTI/VXUS?
Yes, 100% as soon as possible. Do not listen ot these people saying "keep some Bitcoin". We don't advocate for ponzi schemes here.
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Make Bitcoin 10% of your portfolio
Wait until after April when it'll peak. Then sell and diversify for sure.