Three Steps To Make Bitcoin's Volatility to Work For You |
From the Far East to the Middle East… And from Western Europe to the United States of America… Stocks are dropping. |
Welcome to September. |
It can be a notoriously rambunctious month for stock prices. |
The fiscal year for some hedge funds and money management firms ends on September 30. So you'll often see managers locking up profits for the year as well as harvesting tax losses around this time. |
(Tax-loss harvesting is a great strategy investors can use to offset taxes owed on capital gains with their own capital losses.) |
Of course, this being an election year brings more urgency. If the Democrats win, there's an almost 100% certainty capital gains tax will go up. And go up a lot. The Dems are talking about hiking capital gains taxes to 44.6%. |
So after what has been a wonderful bull run, it makes sense for prudent money managers to lock in some of their gains now and hedge against a possible doubling of the capital gains tax rate. |
This phenomenon is also playing out in the crypto markets. Over the last 52 weeks, bitcoin has risen as much as 200% from its lows to its highs. |
For those managers that got in late, don't be surprised to see them harvest some tax losses now and then buy back at the end of the year. |
Let me share a strategy the wealthiest individuals on the planet use to put volatility to work for them… and how you can, too. |
The Three-Step Formula for Buying on Weakness |
So far, we've seen bitcoin drop to $55,000 and change, which has caused weakness across the entire crypto ecosystem. |
The thing to remember is that all of this is temporary. It's being driven by external forces that have nothing to do with the fundamental drivers of these assets' values. |
So why do I think we might drop a bit more? |
Because people are emotional beings that trick themselves into believing they are logical. In times of uncertainty, investors and traders alike dump assets and move to the perceived safety of cash. |
It's an automatic response that has little bearing on the value of the underlying assets. |
How do I know that's true? |
Well, when the world went into lockdown in 2020 due to the pandemic, amazing companies such as Amazon, Google, Microsoft, and Meta saw their stocks hammered lower by as much as 39%. |
Even bitcoin – whose use case has nothing to do with the global business cycle – dropped as much as 56%, from $10,400 to $4,800. |
After it dropped to a low of $4,800 in March 2020 during the early days of the pandemic… It rocketed to a then all-time high of $69,000 in November 2021. |
That's more than 14x your money. |
So how do you make that volatility work for you instead of getting victimized by it? |
Well first things first… I'm assuming you already have a core holding of bitcoin. You leave that stack alone. |
If you want to buy more on weakness but are afraid that bitcoin could have a big drop like we saw back in 2020… Then here's what you can do... |
Let's say you have $10,000 you want to put to work. Here's a simple process you can follow. |
● Put $2,000 to work at $55,000 |
● Put $3,000 to work if bitcoin hits $50,000 |
● Put $5,000 to work if bitcoin hits $45,000 |
Let me be clear: I don't know if bitcoin will drop to $45,000. And I'm not selling any bitcoin from my core long-term position. |
But if bitcoin were to drop to as low as $45,000 – and you followed the approach above – on a reversal back up to the old high of $74,000… your $10,000 would now be worth $15,348. |
At that point, you can pull out your initial $10,000 and you would've increased your overall core stack by $5,348… While still having your original trading capital back in cash. |
Or you could simply sell your trading stack, book a 53% profit, and hold the extra $15,348 to profit from future volatility. |
Either way, you won't be depleting your core stack. And you'll stand to profit more the more volatile bitcoin gets. |
We're Not Victims of Volatility – We Tame It |
Friends, bitcoin might be highly volatile for years to come. So it's imperative you have a method to profit from that volatility. Always remember: We're not victims of volatility. We grow richer from it. |
And if you don't have extra money to profit from the volatility? Then do nothing. Just let time do the heavy lifting for you. |
Close your eyes to the volatility. Keep living your life. And over time, the price of bitcoin will continue to rise no matter what happens in the world. Because one thing is certain: |
Market crashes, recessions, and all the boogeymen that scare stock markets require policy responses of lower rates and more money printing. |
That printing debases the dollar. And dollar debasement drives the price of bitcoin higher. |
Put your faith in that. |
Know that over time, the price of bitcoin will rise as governments continue debasing their currencies. |
Faced with the choice of cutting spending or printing more money, what do you think the politicians will do? |
If you believe as I do that they will continue to print, then owning bitcoin, no matter the short-term volatility, is the best financial decision you can make. |
Let the Game Come to You! |
Big T |
|
|
Tidak ada komentar:
Posting Komentar