1/ If your friends associate you with Bitcoin, Ethereum, or any part of crypto, you’re probably getting Qs about what to do. It’s tricky to guide someone from where we are currently ($BTC ~$100K), especially if they’re an inexperienced investor. Some learnings from 10+ years of watching this dynamic play out...
“Anon-kun, Bitcoin is up so much! You must have made so much money!”
“Haha I mean yeah, sort of. I was spot long for a bit and hedged a bit early, left some bids in.”
“I don’t understand. The line goes straight up for 7 weeks in a row.”
“Yeah, uh, it’s complicated. The RSI..”
@mtndrew Same
Interested to see if non-gbtc etf enjoyers will TP
Also still unknown imo if the pre-etf spot enjoyers are tourists or locals (at these price levels) especially if the context becomes failed ath breakout
Too soon to tell really but maybe odds shifted slightly?
@mtndrew Or just slows down as etf flows buys less coins, or gets a build up of leverage, or reaches natural targets of big spot holders etc
But for now just trying to stay out of my own way lol
@mtndrew@qthomp I do think that etf open hours will be orderly moving forward and we will be back to weekend shenanigans when the leverage gets cranked locally but mainly in crypto exchanges
Whenever my portfolio reaches new (significant) highs I remind myself of the lessons I learned from previous cycles.
The portfolio all-time high number isn't real.
1. I am unlikely to sell the top. I am even less likely to sell the top on everything at once. Some amount of drawdown from that peak number is pretty much inevitable.
2. I will likely lose money buying a larger pullback too early. Especially if the market has been rewarding shallow dip buys and conditioning me to do so, it's likely that I eat some drawdown if I've been trend following and take the same setup(s) again. It's the cost of doing business (hammer it until it stops working) but adds to the drawdown from the all-time high number.
3. There are unlikely to be reliable 'hedges' on the long side. When tides turn, correlations generally converge towards 1 and everything tends to nuke at once. News, tokenomics, fundamentals don't meaningfully matter - liquidity is king and I shouldn't play favourites. Some short-term idiosyncratic outperformance may emerge, but it is neither 'sticky' nor reliable. This means if I'm spread thin among many positions, they'll all be hammering my portfolio simultaneously (while also reducing my ability to manage any one position particularly carefully given there are N number of them moving at once, all requiring attention).
4. If I am 'late' to sell or assume I can sell on the way down, I should also assume that my execution will suffer. Specifically, if liquidity becomes sparse, volatility picks up, and flows are one-sided, I should assume my exit prices are going to be suboptimal. This effect is compounded if I'm holding perp positions that get displaced by a bunch of liquidations, and/or I am holding a bunch of some illiquid shitcoins (rare). In both cases, market impact is greater which generally means worse fill prices. Liquidity is always there - until you need it most. Trying to realise paper gains amidst paper thin liquidity can lead to drastically different outcomes compared to whatever number was on the screen previously.
5. I am unlikely to conveniently flip bearish at the right time and 'make back' the unrealised gains via shorting. Generally speaking, the whole 'just flip your positions and trade the other side' is grossly overstated and is a clout-preserving fantasy rather than a description of reality.
6. Taxes matter. Boring, yes. But I saw a lot of friends and peers suffer massively from tax burdens created by those huge unrealized gains. It happens every single cycle, and the consequences can range from mildly annoying roundtrip to bankruptcy and lifetime financial devastation.
Do not use the portfolio all-time high number as a goal or an anchor. It is neither of those things.
It is a false idol that will cost you dearly for taking it for granted when it's there, and chasing its footprints once it's gone.
Too long; didn't read. I ain't reading all that. I'm happy for u tho. Or sorry that happened.
All these people implying price can't go down (short term) because etf driven demand > supply are kidding themselves
We are a leverage buildup, a @IamNomad tweet about liquidity and how much btc to move market x%, and a few large TPs away from a correction
Still higher eoy tho
2 months to the halving!! Man time flies... I remember celebrating the last one on a zoom with @ToneVays and @willywoo and tons of other $BTC fanatics!!
Mining about to get a whole lot harder ...
But ETF demand and less supply gonna drive price.
Always remember, prices are set on the margin. Supply matters.
@edgexbt@SplitCapital@0xKNL__@viktorfischer Someone told me in 2016 that btc going up is the only fundamentals this space needs
Idk maybe if retail buys the etf instead of spot btc on CB it structurally changes the way that money would otherwise have diffused into the system as users fall into the rabbit hole
@edgexbt@SplitCapital@0xKNL__@viktorfischer I think the post argues that tradfi is btc only and most crypto natives, VCs etc are not.
In other words, TOTAL up but btc D up more