Post/stackingem

Stacking ’em Volume 5 (October 2020)

Posted on by Bitster Money Mustache / 21 Comments

Another month goes by, another salary hits the bank account, another 500€ gets transformed into the greatest money humanity has seen, Bitcoin. This time with a price of 9020€/BTC which means I got ~.055 BTC added to the stack that stands at a total of ~3.73 BTC today. Every month is a celebration as I’m constantly hitting new ATHs – either in BTC, in fiat or in both. This time it was also an anniversary.

It’s three years in folks. More or less exactly 3 years ago I made my first Bitcoin purchase and it’s been a never-ending dive to the rabbit hole ever since.

My rabbit hole journey has gone through Reddit, Andreas Youtube/Rogan, Bitcoin Twitter, various Trace Mayer content (video, text, audio), the Bitcoin Books & The cream of the Bitcoin podcasts. There has not been a day in the past 3 years when I didn’t think about Bitcoin. I’ve learned a lot, dramatically broadened my understanding of the world, got more confident, got more wealthy and got more optimistic about the future. Hell, I would still be poisoning myself with seed oils if it wasn’t for the crazy Bitcoin carnivores (love ya). This shit takes your life over, in a good way!

I’m a brand new person and I’m grateful for Bitcoin.

It’s funny because Bitcoin really changes your life so much that I realise how dumb/crazy any of this would sound for a no-coiner friend (I don’t dare talk in this tune to them). It’s exactly how a cult freak sounds to every normal person. And of course the cult freak thinks he is right, and that the normies just don’t get it, yet cannot shut up about it. Sounds very familiar =D

Looking back the past 3 years, I’ve spent a huge amount of time and effort for learning what I now know and absorbing everything that makes me as confident about Bitcoin as I am. It’s easy to forget this when I think of or talk to my friends and family who do not get Bitcoin at all (and are not interested in it). They have spent less than 1% of the time I have trying to understand it. Of course they don’t get it. And I can’t force them to invest their time.

I think it was Gigi who said everybody finds Bitcoin when they are ready for it. I think he is right.

Let’s look at some charts:

Approaching the next full coin no. 4. Only a matter of time for that. But coin no. 5 is gonna be more tricky. With the current price, it would take me roughly 18 months to gather one full coin. And I’m expecting spectacular price action in the near future so going from 4 –> 5 coins could take many years. Not to mention six point 15 which might not even be possible. Thats a bummer, but I’ll die trying!

The beauty of constant stacking is nicely presented in the figure above – the orange line only goes up, as it should. The fiat worth on the other hand is kinda divided into 3 phases: the 1st long period below 10k (setting the scene – building the stack), the 2nd phase of bouncing at 20k (refusing to go below) and the current 3rd phase at 30k+ (breaking out). Remember that this 3 year period more or less represents a bear market. I’m not expecting to spend very long at every 10k on the way up. 100k is a nice short term target (next year) and a reason for celebration when it happens.

Above I have basically made a graph of all my individual buys and tracked the return to date. There’s only five purchases that I’m currently down on and 4 of them are very low digits, close to zero. So basically I’m significantly down on only one purchase which happens to be unsurprisingly January 2018, the closest one to the ATH of late 2017. On average I’m up ~50% on every buy. This is probably not the best way to report gains as most investors are interested in annualised gains. Nevertheless, it paints a very concrete image of what’s been happening to the money I continue to put in every month. Also, if / when I need to sell some, I can think of an ‘first in first out’ method and start to sell from the first coins bought.

I wrote about the MicroStrategy news few weeks ago and decided to start tracking the price of MSTR vs. GBTC because I believe the BTC price will be a major factor for MSTR price going forward therefore making the MSTR stock a competitor for GBTC when somebody from the traditional investment world wants to have Bitcoin exposure. Below is the comparison chart with a limited first set of data. Right now I’m updating this chart manually with only a few data points. The chart starts at when I wrote the post. Let’s see if turns out to be an interesting comparison.

That’s all folks. Enjoy these days of relatively low prices, start stacking, continue to stack, increase your stacking capabilities. In short: cut costs, stack sats!

-BMM

Post

MicroStrategy vs. GBTC

Posted on by Bitster Money Mustache / 17 Comments

So, MicroStrategy has bought 38250 BTC up to date. I don’t know of any other big company that has disclosed owning Bitcoin in general, let alone mentioning the exact amount. I would assume MicroStrategy to be the top Bitcoin owner in the world among companies right now.

This gives it an interesting quality as a stock in traditional portfolios. You will get Bitcoin exposure (a lot) by owning this company. By the sound of Michael Saylor (the CEO), I get a feeling they might not be done with this amount of Bitcoin. MicroStrategy is a cashflow positive business and most likely fiat will be sold for Bitcoin also in the future.

It’s logical and obvious that a Bitcoin bull market will also catapult companies that hold a lot of BTC. I have no calculation basis for the following but my feeling is that if/when BTC goes 10x to $100k, MicroStrategy’s valuation will also go 10x. Most likely even more because a stock is easier to buy and more convenient to hold for some old school investors, similar case for the premium in Grayscale’s Bitcoin trust (GBTC). MicroStrategy also has the cashflow aspect on its side, and Bitcoin appreciating would prove their decision to be right and boost their reputation – likely to make smart moves also in the future.

In my mind, buying MicroStrategy is very similar to buying Bitcoin. If I was thinking of buying GBTC right now, I would have to think if I should buy MicroStrategy instead. I think it makes a great competition for GBTC which has been on its own as a Bitcoin exposure for traditional portfolios. I’m gonna start tracking these both just for fun, starting from today with the following prices: MSTR – $164.95, GBTC – $11.93.

I’m cheering for MSTR because how can you not love this company! Also, everybody hates GBTC already anyway =D

Of course, if/when more and more companies start adding Bitcoin to their balance sheets, MSTR will not be unique in this regard anymore. So I’m not sure for how long my comparison will be relevant or interesting. Let’s say Apple discloses something similar. Would people buy MSTR as a proxy Bitcoin anymore? I don’t know, maybe they would, depending on the valuation.

It’s also interesting that the higher Bitcoin price goes, the more this amount of almost 40k Bitcoin will get out of reach for other companies. 2017 retail FOMO will pale in comparison. MSTR might become one of the biggest companies of the future.

I got no stocks as I’m a 100% Bitcoin kinda guy, but for my dad, older relatives, some no coiner friends – I think I might shill them this one stock pick.

-BMM

Post

Altcoinfessions

Posted on by Bitster Money Mustache / 14 Comments

Yeah, it happened to me too. I was a shitcoiner in the beginning.

Not a really bad one, and not for very long. I always had the most in Bitcoin. But still, I really thought it was a good idea to ‘diversify’ into other cryptos. Why it happened? It was greed combined with noobness, I bet the situation has been similar for most.

It all started when Segwit 2X went bottoms up and Bitcoin dot con started selling bcash as the default Bitcoin combined with the miner attack on Bitcoin. I was luckily out of town on the countryside and couldn’t easily access my Bitcoin during this drama. It was the first real price crash during my Bitcoin journey and it was truly horrifying to watch the value of my holdings drop -40% (along with the hashrate) while ‘another Bitcoin’ was gaining +100% and more. Had I picked the ‘wrong Bitcoin’? I was a complete noob, roughly 1 month into Bitcoin when this happened, and there’s a high probability I might have sold the Bitcoin bottom and bought the bcash top if I would have been at home during that time. Thank god I was forced to hold on that one. This was the first ‘crash’ out of many and it prepared me mentally for the next ones.

However, it also made me greedy as my take away from the price action was that it would have been ‘easy’ to get more Bitcoin. If only I had bought bcash early when it was cheap and switched over to Bitcoin again at the BTC price bottom (like a casual crystal ball owner).

So, I started looking for similar opportunities. I took a smallish percentage of my Bitcoin and bought some alts, etherium classic and stellar to be precise. Why these? I don’t fucking know =D on the other hand, does it really matter? All shitcoins smell the same.

Anyway, immediately I got burned. Bitcoin had a huge price action during this time (November 2017) and these alts stayed still. But I didn’t learn my lessons yet. I tried some other coins. I bought a shitcoin called modum and another one called coss. For a noob, these sounded like legit projects: ‘blockchain for medical deliveries’ and a crypto exchange that pays fees to token holders. In reality they were either really dumb ideas or outright scams designed to sound clever and attract noobs for their money. That last sentence applies to 100% of altcoins out there:

A dumb idea or a scam.

You can decide which one it is. Just remember, the moment you buy any of these tokens you have made a ‘moon’ for someone else, the creator. They have already achieved what they wanted and now its you against the other noobs who are hopefully dumber than you. People ask ‘when moon’? with altcoins they hold. Too bad, the moon was you buying that shit. Let’s have a case example in ripple. Co-founder has sold roughly $500k worth of XRP **daily** since 2016. El fucking-O-El. When moon? you ask =D

You probably know but let’s just mention this guy also created a copy-paste clone stellar (XLM). So he actually has billions of more tokens to sell (which were created with zero cost) when he is done dumping his XRP. And don’t forget, these are the legit, top20 matketcap altcoin projects. Can you even imagine the amount of scamming that goes on on your random altcoin project? Do yourself a favour and stay away. There’s no get rich quick.

Got excited, let’s go back a bit. Modum actually went on to increase 200%+ and coss at the top was 40x (!!) the price I paid for it (these are fiat returns on the top of my head). However, I didn’t realise the pump and dump nature of altcoins in general and thought they were actual longterm projects with real use cases for ‘blockchain technology’ and I just happened to be early and even though I got these returns I should hold for when the projects go mainstream (lol) and further increase in price.

Retarded, I know.

But you gotta understand this was a time when every shitcoin out there was outperforming Bitcoin. When you’re in the middle of it as a 2 month old noob, seeing these returns, reading page after page on Reddit about vechain, buying it and actually making really nice profits – can you really blame a man for falling for the hype.

Come the bear market. And its slaughter. In hindsight beautiful, beautiful slaughter. But me as a ‘successful’ shitcoiner was in disbelief and certainly not selling now, since I didn’t manage to sell the top and the coins are already down -40% or so. I would wait until the coins are back up because surely they will continue to be worthwhile projects and increase in price, just a matter of time.

Time goes on and there’s less and less left of the profits I made (on paper). I think at the top I had +300% in BTC terms. I watched that slowly fade away and ‘capitulated’ when I only got the principle left. Sold all the alts and never looked back. Didn’t lose any BTC but didn’t make any gains either. I wish I could have avoided that shit but ‘get rich quick’ is a hell of a temptation. I also didn’t have any resources that would have warned me about any of this. I only had the r/cryptocurrency as my advisor (lol). So, I guess it could have been a lot worse. If you follow that subreddit for some reason, you should have the counterweight of Bitcoin twitter on the other side. And from time to time, stop and think. For yourself.

The learning curve on Bitcoin is steep. As a human being I’m not that much older now as I was during that time. But as a Bitcoiner I was a fucking child being tossed around by bright lights and bullshit. Now I’m a full grown Bitcoinman. I can imagine how hard it’s gonna be for every newcomer in this space during the next few years. There’s gonna be ruthless wolves that have been waiting for fresh blood the last 4 years. There’s gonna be hand waiving, the buzzwords are gonna be amazing, there’s gonna be a promise of a brave new shitcoin future and a ‘proof’ of a failed ancient Bitcoin tech.

Time to end this rant.

You will not find an altcoin creator who hasn’t cashed out (sold majority of their tokens for BTC). You will not find an altcoin investor who is not planning to sell their bags to noobs (hopefully near some local top). BTC is the polar opposite. You have dedicated holders adopting a new kind of money, forever. Theres no top to be sold, we are the first living in a new financial system. It is the same as trying to sell your early gold stash for maximum amount of seashells. There is no top. This is the new money. Altcoins are a distraction and everyone is a scammer.

–BMM