Here’s My Bitcoin Strategy – What’s Yours?

by Mark Alexander

22:21 PM, 13th December 2017
About 2 years ago

Here’s My Bitcoin Strategy – What’s Yours?

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Here’s My Bitcoin Strategy – What’s Yours?

Some say that each Bitcoin might be worth $5,000,000 in years to come!

Well if they are right I will settle for owning just one thank you very much 🙂

Some say it’s the modern economic version of ‘Tulip Mania

The truth is, I have absolutely no idea whether the recent growth in popularity of the social experiment known as Bitcoin is a bubble, as portrayed by the media, or the future of world currency. One thing is for sure though, I’m not going to be betting my shirt on it either way.

I started looking in to Bitcoin in around Spring 2016 when it was worth about $600. I should have bought a few then but I didn’t. Damn!

I took another look a few months ago, when the value broke through $5,000. Then it dropped back to $3,600 for about a day and I thought to myself then, maybe I should buy now? But I didn’t ….. double damn!

This week, Bitcoin broke though $17,000 and has since fell back a bit. It always seems to drop back immediately after a massive spike.

Thankfully though, a few weeks ago I decided to dip my toe in. I opened an account with a company called Uphold.com and got approved within a few days. Before that I’d opened an account with Coinbase, but for some reason I couldn’t connect my Maltese bank account Grrrr! Hence, my first transaction was with Uphold and was only for £500.

Why such a small amount you may well ask.

Well having been a landlord for nearly 30 years I have to admit that I’ve become a bit of a skeptic. Despite being recommended to that particular platform by my best friend, who got into Bitcoin in March 2016 when I should have, I wanted to make sure my money actually got there. Eventually it did, after five days of checking every hour, so I transferred another £5,000.

My thinking was, if Bitcoin doubles in value, I will take my initial £5,500 out and have a nice holiday. If I lose the lot I skip one of my holidays. Either way, it’s no big issue. If I ever get my initial £5,500 out then I have no real risk at all leaving the rest in. If I lose the lot then so be it.

My Bitcoin Shoes Story

Like my new shoes?

OK, fair enough, they are not to everybody’s taste but that’s not the point. I love em!

Being a bit of an exhibitionist they caught my eye when they popped up on a Facebook advert. Love em or hate em, at least they will be a talking point at Xmas parties! LOL

The real point though is this; when I chose my size, clicked the order button and was redirected to the payment page I was presented with a variety of options; Visa, Mastercard, PayPal ……. and low and behold Bitcoin!

This got me thinking, because up until then I had seen Bitcoin a bit like Monopoly money, not real but a bit of fun. So I decided to check out which other retailers accept Bitcoin, and that was my lightbulb moment. Bitcoin is accepted by loads of the big brands including Microsoft, Dell, Expedia, Starbucks, Sports Direct Online and so many other big names that it blew my mind. OMG I thought, this is a real currency! But then I thought …. hang on …. very few governments recognise it as such and cannot trace it. There isn’t a Central Bank of Bitcoin and there is no way to regulate bartering or for Governments to stop this.

Let me explain in even simpler terms. If I were to swap a tax consultation for a crate of champagne, nobody would be any the wiser and I’d certainly not have to declare it as income. Is that why Bitcoin is becoming so popular?

By the way, I couldn’t bring myself to pay for my new shoes in Bitcoin. In years to come I don’t want to be thinking to myself ‘those stupid shoes cost me what would now be £50k in Bitcoin’ LOL

Am I getting greedy?

Just a few weeks into Bitcoin and I have to ask myself, and I getting greedy or just wising up?

I thought more about the claims from people who say Bitcoin will be 10% of the Forex market and each one will be worth $5,000,000 … and so I did a bit more digging and a lot more thinking. If we look at the ‘black market’ alone it is believed to consist of 10% to 20% of the global Forex market. Bitcoin started as a ‘black market’ currency but ….. and this is big ….. it has now gone mainstream and isn’t even taxed. If you divide the value of all the legal currencies in the world by 21,000,000 (which is the maximum amount of Bitcoins there will ever be in existence) and then multiply by 10% (a theoretical global market share of Forex) then you end up with a figure of $5,000,000. On that basis it doesn’t seem so daft does it?

Anyhow, I digress.  Having discovered this I learned a bit more about the other crypto-currencies, which aren’t as well known as Bitcoin but are also achieving spectacular growth in value. They all have a different purpose, which I have only just learned and won’t go into here, but there’s; Litecoin, Dash, Bitcoin Cash, Etherum and a few others. I needed a way to justify speculating on those too, and of course I found it. We’ve all done it haven’t we? You know …. when we want a new car or something badly enough we always manage to find a way to justify buying it don’t we?

So, I decided that having sold one more property than I had initially intended to this year (lame excuse I know!) my liquidity reserve were slightly larger than they needed to be. £10,000 larger as it happens, which also just so happened to be just the right amount to speculate £2,500 on each of the above mentioned other crypto-currencies..

Why I don’t ‘invest’ into crypto-currencies

I see Bitcoin and other crypto-currencies as a bit of a punt, a gamble if you like and at best speculation. Perhaps the only reason “I’m in” is that I’m afraid of being left out? That’s been a significant contributor to my ‘self-talk’ for over a year and I think that’s perhaps, at least partially, why I eventually took the plunge.

And yes …… I’ve read all the negative media, of course I have. Some say that if Bitcoin continues on its current trajectory there won’t be enough electricity in the world to power the computer processing that trading it requires. Well maybe that’s true, or maybe it’s just propaganda put out there by those who cannot control it and are afraid of where it could take us. If it isn’t propaganda, you can bet your bottom dollar that the IT boffins will find a solution to make the processors more efficient. I remember my first mobile phone. It was a handset connected to a battery the size of a breeze block …. I kid you not! It came with 4 hours of standby and 20 minutes of talk-time. Compare that to where we are with mobile phone technology now.

And if you’re wondering why I haven’t mentioned crypto-currency mining….. well I’ve also taken a punt on that, details HERE if you’re interested.

So, in summary, I don’t consider that I have invested into crypto-currency …. but in years to come I may change my mind and say it was the best investment I ever made, or maybe I will have to skip a few holidays.

So there you have it.

What are your thoughts on Bitcoin and other crypto-currencies, and if you’re ‘in’, what’s your strategy?



Comments

Ahmad Jibril

21:34 PM, 19th December 2017
About 2 years ago

Now that Cryptocurrencies have become an item of discussion on a property forum, I have to say, it is time to sell rather than buy. I am selling today. Time and my pockets will tell if I am wrong.

Mark Alexander

21:36 PM, 19th December 2017
About 2 years ago

Reply to the comment left by A J at 19/12/2017 - 21:34
Maybe sell everything but what you initially gambled so you have no money left in? That’s a property strategy.

Ahmad Jibril

21:50 PM, 19th December 2017
About 2 years ago

I agree. I will sell only gradually. Unlike, property, these currencies are not earning any rental income and when the sell starts, I suspect it will be rapid and brutal. Certainly, no more money in for a while and I will use any further surge in price to take some money off the table.

Mark Alexander

22:14 PM, 19th December 2017
About 2 years ago

Reply to the comment left by A J at 19/12/2017 - 21:50
Like I said in my blog, nobody knows where this is heading. It is the biggest social experiment in history. Have fun with it and if you do well then good luck to you.

Tim Jones

20:50 PM, 22nd December 2017
About 2 years ago

Good article - I agree we are all watching from the sidelines, well done for taking a punt, I hope your initial bet was lower than the recent slump !

Mark Alexander

21:20 PM, 22nd December 2017
About 2 years ago

Yes I’m only up £4,500 now. It was nearly £9,000 a few days ago.

My problem is that I can help looking every half an hour.

My wife keeps reminding me this was supposed to be a five year thing so no need to check it every 30 minutes but I can’t help myself LOL

Mark Alexander

20:25 PM, 5th January 2018
About 2 years ago

Despite the volitility I’m doing OK.

The new shoes were a hit over the festive period and my crypto currency portfolio is now with over €20,000.

The volitility is a bit un-nerving at times as the value has been up to €24,000 and fell to just over €16,000 at one point.

My problem is that I can’t help but look at the value about 20 Times a day looking for patterns LOL

I’d be interested to hear the views of other property people like me on crypto currencies.

Dinah South

20:50 PM, 5th January 2018
About 2 years ago

Reply to the comment left by Mark Alexander at 05/01/2018 - 20:25
Hi Mark, I'm starting to think I'm not a property person anymore but a Crypto person, since my last reply to your post and investing in Hargreaves and Lansdown on Bitcoin, I also dipped into Ethereum with the same plan in a Sipps to leave. Ive since now and also look about every (too embarrassed to say!) am mining with two companies, and now moving onto ICOs - its so interesting and a breath of fresh air after all the rubbish property went through last year. I even read an article that tenants will in the future pay their rent via bitcoin...
We are as a family back in Malta for two weeks in the summer, if you want a Crypto coffee meet let me know, lol.

Mark Alexander

21:33 PM, 5th January 2018
About 2 years ago

Reply to the comment left by Dinah South at 05/01/2018 - 20:50
Depends on what you mean by Summer. July and August in Malta are too hot for me. I generally head back to Northern Europe or Russia in those months. Spring and Autumnare the best times inMalta IMHO.

My wife and I are enjoying another Christmas (a white one) in Russia right now..

Mark Alexander

19:02 PM, 17th July 2018
About A year ago

Well, I think it’s time for an update.

So far I’ve made a small fortune of Bitcoin. The only problem is, is started with a larger one!

If only every day could make 7% return like today. I back to over half of what I invested now 😂

I knew I should have purchased those shoes with Bitcoin!

It was a five year punt though so let’s see what happens.

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