Posted: Jul 09, 2021 2:49 pm
felltoearth wrote:jamest wrote:
There was a recent point when my own projected wealth, after paying CGT, was above £half-million. That's why I was asking advice about house-buying and why I went to see a half-dozen houses. Ironically, we found a house we would have liked to buy, but guess what date that was? May 12th of this year, after which a more-or-less 50% correction happened.
Any “investment” instrument where you can lose 50% of the value in a single day isn’t worth it. The key to financial planning is found in the second word. We can’t have a financial plan with such volatility, as discovered by you on May 12.
All things being equal, the value of Bitcoin keeps going up, and up, and up, and up!
That means anytime you buy Bitcoin at its all time high (ATH) and then suffer 50-80% crash afterwards, given enough time, you would eventually profit MASSIVELY.
You only get wrecked if you are a short-term investor, who maxed out all your credit cards, put all your life savings, use leverage (which is like taking a loan) and then has to cash out before the price could recover and reach a new ATH.
Having said that, if you are thinking of investing in Bitcoin today, I would advise against it. The reward is just not too enticing, the market cap is already too big, making it increasingly difficult to multiple your gains. Most importantly, in this crazy post-COVID world that we live in right now where there is a very real possibility of an alien invasion to occur in your lifetime, all things are no longer equal, an unpredictable black swan event might just pop up out of nowhere causing Bitcoin to go down to zero. Just because BTC has always repeatedly recovered from severe crashes and reached ATH, there's no guarantee that it won't go down to zero before you could cash in your investments.