Full transparency, I don't know the guy. And honestly, I don't even want to meet him. But maybe my aunt had a blame in this also. She didn't call me when she was buying. She called me when her portfolio was down around 50%. That's when they call us the genuine guys. This experience encouraged me to build a bitcoin investing strategy for regular people as long as they don't get greedy. But this is how it went down with my aunt.
I was sitting on my sofa that afternoon and I heard my phone ring. I don't like unscheduled calls, so I reluctantly went to check who it was. And I knew I had to pick the call. She was not one of the people who disturbed me frequently. We exchanged pleasantries for a second and she cut to the chase very quickly, "How is bitcoin?"
If this was a movie, this is where the action suspends and the narrator starts with some backstory. Honestly, I never saw that question coming. Around early 2017 when I got started with crypto, I spent a lot of time at my aunt's house with my cousins. Even though we could talk freely with her and chat, I never tried to mention bitcoin. It didn't even cross my mind. This is because I knew the answer I am going to get.
Yes, she is money-conservative. But that wasn't the only issue. She doesn't even own stocks. She only does real estate. And that is because, in real estate, she can see what she is buying. She doesn't trust the stock market, let alone crypto. Talking to her about crypto would have made me look so stupid. And it was a wise choice. The crypto market was not ready for someone like her.
So, to hear her now asking me about bitcoin, I was taken aback. I mumbled something from my lips but in my mind, I was trying to figure this big puzzle out:
Why is my aunt asking me about bitcoin? Why now?
This was June 2021. I have had a lot of experience with bitcoin and cryptocurrencies at this stage. In fact, I wasn't even public about my stance on crypto anymore. I was a private person. I have moved on. So, why now of all times is she asking me about bitcoin?
As we kept having this discussion over the phone, I got her to open up about what is on her mind. She finally confessed she had bought bitcoin during the bull run of 2021 with a few thousand dollars. My mind was, "what?!?!?" But I didn't want to scare her.
Prior to this time, I have developed a thesis on bitcoin investing. I have tried all kinds of investing and trading strategies as a non-professional trader. Okay, maybe more like a young guy trying to make some money. And I have been burnt in several ways. I think I pretty much figured out all the ways to lose money.
I know everybody tells the story of how they made a killing with bitcoin. And yes, I had those moments too. But I also pretty much discovered almost every possible way to lose money. Thankfully, I never committed any amount that could harm me. But I very soon figured out that not losing money was more important than making money. And this is the big idea.
I figured out the most profitable strategy for regular people with bitcoin around 2019. And although my gains were not that massive, I wasn't losing money. Which was a good thing! But I soon ran into another problem. My investment capital was too small. And that means I couldn't chill on my gains. So, I had to solve that problem.
But with a large transaction volume comes another problem. My strategy would break down if the volume of the capital was too large. So, how would I deal with that? My theoretical answer was just to play the different, bigger game. But I wasn't there yet, so it is not my problem.
When I tried to explain my strategy to my aunt on how to restructure her portfolio, she wouldn't listen. She just said she would wait as much as she can and cash out when she breaks even. She doesn't even want to hear anything from me other than reassurance that the crypto market would bounce back. This made me pissed at the guy who got my aunt to buy bitcoin in the first place.
I don't know the guy personally but he was someone my aunt held in high regard. He is not a young guy like me. He is a much older gentleman who everybody would assume he knows what he is saying. He held an executive position at a prestigious company before retiring into his own business. He is one of those people regular people will accept as a reputable voice on anything that has to do with business. But crypto is barely 12 years old.
Sorry to break this to you, but crypto experts and legends don't wear suits. We wear t-shirts and sometimes with a face cap. Plus, we don't get excited about the price of bitcoin. Maybe you know that already. But I bet someone in your family that you care about doesn't. You probably have someone like my aunt who has some money and can be tempted to buy bitcoin at the top of the market by a "reputable voice."
By the way, my aunt's mistake wasn't that she bought bitcoin. In fact, her mistake wasn't that she bought bitcoin at the top of the market. Her mistake was that she bought a bulk amount (to her) at once. And this is the worst way for regular people to invest in crypto.
Someone says, "I have $10,000 and want to buy bitcoin with all of it today." Even if you are willing to wait for 9 years, it is still a horrible strategy. And this has been lauded as the best way for regular people. "Just buy bitcoin and forget it for the next 10 years," they say.
How can you forget where you kept money? What if a loved one has a medical emergency? You will dip your hands everywhere you have money. You won't even care whether the market is right or not. You will sell.
And I have found myself there too. I needed money to do something and there was a significant sum lying fallow in crypto. I traded all the other cryptocurrencies for bitcoin and sold the bitcoin for cash.
Think about this. Another crypto bull market will come again, and regular people will be sweet-talked into buying bitcoin by people that are excited by the price. I don't want any of that happening to people like my aunt. And I really don't enjoy talking crypto in any of those low-level conversations.
This is why I fleshed out my crypto investing strategy for non-greedy people in a book. I really hope it helps people like my aunt.