Bitcoin is Dead, Long Live the Bitcoin.

source: pixabay via Pexels.com

Have you ever tried to earn money by following main-streams media’s advice?

When I was young I used to read mainstream investment advice.

I tried and failed.

The average retail investor buys financial assets without being financially and psychologically prepared to hold them for a long time without looking at the quotes. Most investors can’t handle fear and greed and hence buy and sell their assets at the wrong time when the emotions take over the rational mind.

-Warren Buffett

That is also the reason why the vast majority of private investors do not make any money on the stock market.

In this article, I would like to explain why I think Bitcoin will rise by another 1,000 % and how I plan to take advantage of this development.

Let’s think about the future of payment. Probably you’ve heard about Bitcoin. Bitcoin is a cryptocurrency and works on a decentralized technology called the blockchain that does not require a centralized institution like a bank to handle transfers.

Approximately every four years, the rate at which newly created Bitcoin is released is cut in half. This is commonly known as “halving” and programmed into Bitcoin’s source code.

In the past, this event has caused Bitcoin to rise by 7,500 % from $12 to $1.100 after 2012’s halving.

Four years later in 2016’s halving., the Bitcoin rose by 3,000 % from $626 to $19,710.

Photo by Moose Photos from Pexels

What will happen after 2020’s halving?

From a simple economic point of view, a low supply and high demand lead to a price increase. By a maximum of 21 million bitcoins ever released, the Bitcoins are getting rarer and rarer.

Everything has its beauty, but not everyone sees it.

— Confucius

It ensures the scarcity of the cryptocurrency and makes it quite the opposite of our current fiat-currency system.

Our current system is managed by central banks who have the power to control the supply of money. They can print as much as they consider necessary, which often leads to inflation.

If inflation rises, the purchasing power of the currency is falling and erodes the value of cash holdings.

I personally believe the inflation to dramatically increase and the adoption of blockchain-technology to continue to skyrocket. For example, just recently PayPal entered the cryptocurrency market.

“Opportunities don’t happen. You create them.”

— Chris Grosser

The company will allow its user to hold bitcoin in their wallet and even use it to pay for products from the 26 million sellers which accept payment through PayPal.

The Method

I recommend planning financial decisions rationally. A useful tool for that is the SMART approach.

In summary, SMART is an acronym and stands for Specific, Measurable, Achievable, Realistic, and Timely. It basically offers a technique by setting clear, measurable personal objectives within a certain period of time.

“Planning is bringing the future into the present so that you can do something about it now.” ― Alan Lakein

I quickly came up with the following plan:

Photo by JESHOOTS.com from Pexels

I want to live in the Caribbean for one year, paid by the profits made by bitcoin.

I estimated that this humble undertaking would cost about $ 50,000 and I was willing to invest $ 3,000.

“Whatever the mind can conceive and believe, it can achieve.”

― Napoleon Hill

You have to aim high! If you pursue an ambitious goal and only achieve 50%, it’s still more than 80 % of a humble goal!

Execution

Here is my plan:

The Plan

Stay with me! I promise at the end of the article you will understand my approach.

Basically, there are four questions to think about:

  1. How much risk am I willing to take?
  2. How many Bitcoins do I need?
  3. What price am I ready to pay for it?
  4. At what price do I have to sell?

How much risk am I willing to take?

Let’s briefly talk about the risk. Generally speaking, the higher the desired return, the higher the risk. In this case, the probability of losing the whole investment is extremely high.

How many Bitcoins do I need?

To come up with the Bitcoins needed, I only had to divide the desired profit of $50,000 by the average selling price of $120.000.

The Plan

The answer is 0.41 Bitcoin.

“By failing to prepare, you are preparing to fail.” ― Benjamin Franklin

What Price Am I Ready to Pay for the Bitcoin?

To answer this question, I only had to divide my capital of $3,000 by the 0.41 Bitcoin needed. The concept behind the calculation is called the rule of three which is used to solve basic linear questions.

To buy 0.41 Bitcoins for $3,000 the market price of the Bitcoin had to be $7,317.

Unfortunately, in early November a Bitcoin traded for roughly $9,000.

“Trust the process. Your time is coming. Just do the work and the results will handle themselves.” Tony Gaskins

I had to wait until the end of November. On the 24th of November, my order was executed for $7,301.

At What Price Do I Plan to Sell?

Due to the high volatility and the unpredictability of the price development, I plan to sell my 0.41 bitcoins in 40 stages between $20,000 and $250,000. The steps are calculated by simply subtracting the end value of $250,000 minus the start value of $20,000. Once you divide the desired 40 stages by $230,000 you will get the threshold for each step.

The Plan

As soon as Bitcoin hits $20,000, I will sell my first 0.01 Bitcoin. The next part will be sold at $25,750, etc.

The math is done.

The Plan Part II

All I have to do now is

Believe in my investment idea!

I have to stick to the plan.

I won’t read Bitcoin news.

I won’t check quotes.

I won’t let others change my mind.

I hope to see you again in the future.

If you would like to learn more about financial independence, here is how to start:

Disclaimer: This article is not investment advice, but for analysis and informational purposes only. It should not be considered Financial Advice. Consult a financial professional before making any significant financial decisions.

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Traveler |Photographer | Adventurer | Investor

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