Thanks for sharing. It's interesting. There's also good analysis that shows a one off smash buy is often the way to go vs DCA into Bitcoin.
I haven't overly focused on DCA out, but your analysis inst...
"If one is sophisticated enough to call the top vs the bottom of course"
I'm certainly not sophisticated enough, I go with the value of the bitcoin at the time of four year drawdown of expenses.
My strategy is based on an assumption bitcoin will produce an AAR/CAGR of a minimum 20% for the foreseeable future. (if it can't do that, maybe it's not what we think it is) time will tell, but we have to back our own judgement.
Another assumption I hold is bitcoin may dip 80%, (it might, who knows)
Say my annual expenses are $50k yr, so over 4 years $200k which I need to draw down in advance.
I'll be conservative with a 10% buffer on the 80%, so my stack needs to reach a value of $2M
So my strategy is not about tops or bottoms, but the value in fiat of the stack.
If I draw down 10% and my balance CONTINUES to gain 20% AAR/CAGR I could live forever and never run out of money.
There are tweaks for assumed inflation going forward and emergency drawdowns that I have in my model.
I'd be happy to take this chance.
I just don't understand how a strategy based on tops and bottoms can be operated with confidence with such a volatile asset. But I'm willing to listen to any explanation of a logical strategy based on price.
I'm certainly not sophisticated enough, I go with the value of the bitcoin at the time of four year drawdown of expenses.
My strategy is based on an assumption bitcoin will produce an AAR/CAGR of a minimum 20% for the foreseeable future. (if it can't do that, maybe it's not what we think it is) time will tell, but we have to back our own judgement.
Another assumption I hold is bitcoin may dip 80%, (it might, who knows)
Say my annual expenses are $50k yr, so over 4 years $200k which I need to draw down in advance.
I'll be conservative with a 10% buffer on the 80%, so my stack needs to reach a value of $2M
So my strategy is not about tops or bottoms, but the value in fiat of the stack.
If I draw down 10% and my balance CONTINUES to gain 20% AAR/CAGR I could live forever and never run out of money.
There are tweaks for assumed inflation going forward and emergency drawdowns that I have in my model.
I'd be happy to take this chance.
I just don't understand how a strategy based on tops and bottoms can be operated with confidence with such a volatile asset. But I'm willing to listen to any explanation of a logical strategy based on price.
1❤️1