Why You Should Allocate 5% of Your Money to Bitcoin

Why You Should Allocate 5% of Your Money to Bitcoin

The biggest fear people have when buying bitcoin is they’ll lose money. Said another way, folks fear the volatility in bitcoin.

Let me make this really clear, I guarantee at some point in your bitcoin ownership journey, you’ll suffer horrendous paper losses.

Not little losses, but gut-wrenching, puke-all-over-the-keyboard, spouse-will-hate-you type of paper losses. I’m talking about 50%, 60%, 70% and even 80% pullbacks from your entry price.

I guarantee it.

No matter what price you paid for your bitcoin — whether it’s $1, $10, $600, $400, $1,200, $5,000, or $30,000 – you’ve had to live through truly horrifying volatility...

Volatility is so bad that it makes you look and feel like a horse’s ass for trusting your money to bitcoin.

I need you to come to terms with this. I need you to give up the idea that you can buy bitcoin at such a perfect price that you’ll never experience a violent price reversal.

That price doesn’t exist.

To make life-changing wealth from bitcoin, you must embrace its volatility as a feature, not a bug.

You harness this volatility to your advantage by dollar-cost averaging into bitcoin. By doing this, you will pay “cheap” prices, “expensive” prices and prices in between. Over time, though, you’ll get great prices on balance.

That brings me to my next piece of bitcoin advice: Let time do the heavy lifting.

The price of bitcoin moves in massive one-way spurts. I wish I was smart enough to know exactly when those spurts would happen. I’m not. I don’t know anyone who is.

When it comes to bitcoin, the smartest thing you can do is buy it when the price is down a lot. And let time do its work.

I’ve learned to over allocate to bitcoin when it is at its most hated. This is not easy to do. But it has made me many millions of dollars in profits.

When something in the investing world is emotionally easy to do you probably shouldn’t do it. When something is emotionally difficult… that’s when you should really press your bets (while respecting your risk management parameters of course).

Understanding Non-Linear Returns