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  • by owning a little bit is a good way to start that journey and to do a minimal portfolio allocation just to be aware of crypto I I think so especially if you look at my own writings evolution on it over time it went from 2017 like, you know, it's speculative, be careful with it too early 2020 was like this is worth having a small percentage of portfolio in and then later saying like, you know, I think basically that zero is not the right number anymore and that the the right number depends wildly depending on how how, how research they are, how high conviction they are.

  • Uh you know what their risk and volatility tolerances so that there's no right number, but I do think that it's essentially at the point where The right the right number is not zero and that is something that people should should be familiar with even if it's even if it's a number that does not really impact their life, right?

  • Just just to get familiar with the technology, even even something this is buying it and then transfer it to a mobile wallet and realizing you own this, you self custody, it, you can send it to anyone the world and you're not going through a centralized third party.

  • It's kind of crazy to think about when you actually do it in person.

  • It's kind of, it's different than than any owning of security for example.

  • And so I've kind of focused on that evolution over time.

  • And I also often emphasize dollar cost averaging right?

  • So instead of people often worry about what if I buy it and it goes down 50% or what if, I you know and I just find that the dollar cost averaging makes sense.

  • And and and the culture especially in the Bitcoin space is kind of um shifted more towards that model where instead of treating it like a speculation, you treat it like a savings.

  • Um And so by dollar cost averaging, you lower your like mental connection to a specific entry price.

  • Um and you become kind of price and sensitive and you say look I'm gonna put this whatever percentage of my portfolio into this and then just add a little bit every week, every month whatever the case may be and you kind of you just kind of desensitize yourself for the price.

  • And so for me for example I have a certain allocation I add to it on a regular basis.

  • Uh and so when we had for example uh what was it?

  • A 56% correction uh in you know mid mid 2021 because my position size was appropriate and because I had bought at a much lower price, even even even from that correction level and because I was just dollar cost averaging in, I was like wow you know the money that I'm putting in is going to buy more bitcoins now than it was going to buy back in april when it was it was higher.

  • Um And so that that's just how I approach and I think that's a healthy mindset um as you kind of learn more about it.

  • Yeah and that's something that you know, I know Jack Dorsey's really set up with the square and with a cash app and all, there's a lot of Technology now that allows people to do that.

  • Um and again when it's always when it's an increasing value asset and all that strategy also does look good over time.

  • What is the right percentage land of people to hold if it's not zero and it's not 50% or it's not 30%.

  • What is that in between?

  • I think it's really different.

  • I mean a 25 year old tech professional probably has a very different ideal number Than an eight year old retiree for example.

  • Um That doesn't really get it Right, so uh but many of them do get it there.

  • I have readers that are 75, 80, 85 that that own Bitcoin.

  • Um and that you know, they they fully get it.

  • So it really depends on their personality, their their experience, um What other assets they have.

  • So I think there's really a wildly different number.

  • There is also the case where there might be a difference between how much you put in versus how much you maintain and so for example, my allocations actually quite big but it's because of appreciation, right?

  • So it's simply because they have not rebalanced that have not, I have not sold and then realize all sorts of capital gains taxes and things like that.

  • Um And so a lot of times you'll hear people say what the percentage is actually quite big, But people should realize that they didn't, they didn't, most of them didn't put that much of their percentage in up front.

  • They didn't just say I'm gonna put 20% of the Bitcoin.

  • Um it's more like they put 5% in and it became 20% of the time, for example.

  • Um And so the percentage of someone who's worked up to that percentage is a very different number than what someone should should put in when they're when they're just starting out.

  • So I think the first step is start small because there's there's technical risks, right?

  • You you risk losing it if you don't know what you're doing.

  • So you first you buy on exchange or you buy on on one of the dollar cost averaging services like swan Bitcoin or a place like that, whatever is kind of accessible in your country and you you start dollar cost averaging into that and then you can eventually take custody of it and you learn more about it.

  • And then if you you're not just like to research more and then you're going to answer your own question for how much you can hold because you'll you'll be more knowledgeable on it.

  • You'll have a conviction on it or you won't and therefore you'll be determined what percentage makes sense for you.

  • I always find that some degree of diversification is helpful.

  • I never go all in on anything, um Just for for Mental clarity really.

  • Um and so when something falls 56% in a couple of months, it's literally you lose zero sleep if if you know if you manage your positions as well and if you know what you own, Yeah.

by owning a little bit is a good way to start that journey and to do a minimal portfolio allocation just to be aware of crypto I I think so especially if you look at my own writings evolution on it over time it went from 2017 like, you know, it's speculative, be careful with it too early 2020 was like this is worth having a small percentage of portfolio in and then later saying like, you know, I think basically that zero is not the right number anymore and that the the right number depends wildly depending on how how, how research they are, how high conviction they are.

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How much of your net worth should be in Bitcoin? ? Investment Strategist Lyn Alden ?

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    林宜悉 posted on 2021/12/04
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