Another month goes by, another salary hits the bank account, another bitcoin purchase! As per usual, I immediately put aside 500 euro bucks from my salary and market buy sats with all of it. The price this time was ~34700 €/BTC which means I got another ~0.014 BTC added to the stack that stands at ~4.02 BTC today. Already a good start towards the next .1 BTC taking into account it felt like ages (8 months) going from 3.9 to four full coins which finally happened only last month. I like to emphasise the amount of 0.1 right now because I feel like it is a realistic target for anyone starting to stack right now or who has recently started. Do whatever it takes to stack that 0.1 BTC, it will be a life changing amount and it is only gonna be the start for you. If you feel like you don’t have enough income to stack sats, you can always up your frugality, negotiate a salary increase, or even better find a new better paying job. Anyone can do this. There’s nothing special about your current job. You can also start a side hustle. Whatever it takes to stack them sats 😉
Weird price action recently. Well, I guess it’s nothing weird if you think we’re in a bear market. I, on the other hand, think we’re still in a bull market (though I always do, so don’t count on it). But actually, you could say it’s been a 1 year long sideways market: First from 30k to 60k (~1 year ago), then back to 30k (summer), then back to 60k (autumn). And now it was almost 30k again. What to make of it all? Stack sats, buy bits, compound corn, etc. You will look back to these times many years from now, the corn will be six figures, maybe seven and you think to yourself – why oh why did I not stack more when bitcoin was only 30k dollars? I know the feeling, I was there during 3k bitcoin and right now it feels like I should have done more. And before me, people were there during 300 $ bitcoin missing their chances thinking they were late. What I’m trying to say is
Everybody *feels* they’re late. Nobody actually *is* late.
So, seize the day and thank yourself later. Let’s take a look at the charts:
The orange line is my BTC stack (left axis), always increasing since there is no selling, only buying. The green line (right axis) is the corresponding fiat net worth in euros, in the long run going up, big volatility during the recent year. It’s noteworthy that even though right now it looks like the early stacking (2018 – 2020) was low volatility base building and only recently I’m ‘suffering’ from volatility, it was actually always the case and the volatility is nothing new. It’s the same effect as in the BTC price chart. The history is flat and then there’s a big recent hockey stick / crash. The dashed black line is the total amount of money put in, approximately 29k euros at the moment.
I added a red circle to show the ‘corona crash’ of March 2020. During that time I had already stacked 2.5 years, bought bitcoin every month, the total amount invested was more than 15k euros (biggest amount of money I’ve ever seen or had) and I was at a loss (-15%) for the total money put in. In hindsight, it doesn’t feel too dramatic of a situation but just think of starting to stack right now. You buy bitcoin every month for the next 2.5 years. It’s the summer of 2024 and you are now -15% for the money put in. How do you feel? Are you committed to continue stacking through this ‘failure’?
I’m not saying it will happen like this, but prepare yourself mentally for something similar. Bitcoin is going to test your faith. Just the way it is. Nobody gets a free ride.
The bars represent every bitcoin purchase I’ve ever made. Once per month starting from October 2017, 53 in total. The best buys were made during the bear market in early 2019 but I can say that I didn’t catch the bottom, meaning all of these purchases have been at a loss at some point in time. Also, there were many TA ‘specialists’ (Murad for example) calling for another -50% from these prices. There will always be people calling for lower and lower prices. And many people will listen to them leaving themselves on the sidelines and finally buying with 2x – 10x prices compared to what they could have. So, don’t try to time your buys, focus on earning money and your ability to keep buying with whatever the price is going to be.
The orange line is the performance (gains for the money put in) of my bitcoin savings strategy. The blue line is the standard (and poor) savings strategy of putting it all into S&P500. I wanted to make this comparison because I used to read a lot of early retirement / financial independence blogs (MMM for example) and those guys always only buy S&P because it’s the best way to get nice hassle-free performance for your savings. I felt like I had found a better savings technology and wanted to find out just how much better it is. The latest numbers show my Bitcoin savings strategy has given me ~390% gains for the money put in whereas S&P strategy would have given me only 44% gains for the money put in. So roughly a 10x difference, which is going to be even more for bitcoins advantage as the time goes on. Choose your savings strategy wisely.
The last chart is a comparison between MSTR stock and GBTC. I started to track these prices at the time when MicroStrategy first announced that they had bought almost 40k bitcoins. I thought their stock would start to perform basically in tandem with the bitcoin price. During that time the most popular way to get Bitcoin exposure for traditional stock accounts was via GBTC so I started to compare the two with a hypothesis that MSTR might be the better bet. Now, ~18 months later they are basically at an identical point (gains wise) though MSTR had many periods where it was at substantially higher gains. I’m not sure if I’m gonna continue with this comparison since it seems they indeed are making very similar performances. Though its’ kinda funny that MSTR now holds 3x the amount of bitcoin than they used to at the start of this chart. It’s not visible, should I say, at all in the chart.
That’s all for now! Hope your 2022 has started on the right tracks and I hope your year will end with more sats than you currently have.
-ERB
Twitter: @RetireEarlyBTC
Ps. Every time I post somebody asks me where I buy my Bitcoin. I can say that I will not disclose it as I don’t wanna endorse the (local) company that used to be Bitcoin only but now also sells shitcoins. However, if you’re gonna buy from somewhere I can at least try to direct you to a great Bitcoin only exchange.
Referral link: Swan Bitcoin
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