web3dom #40 - Bitcoin Breaks New Highs: Five Things to Remember in a Bull Market

Moneyverse: how money works in the multiverse paperback edition is out, and please don't scold me for praising my own flowers—it's truly beautiful.

Thank you for your support. The 140 copies I had allocated are already sold out. The book was released just yesterday, and I haven't even had the chance to touch a copy myself. As soon as I get one, I will promptly send it to those who pre-ordered. For those who missed the pre-order, you can now buy it at the Taipei Book Fair's International Section A1106, Ximending's Nowhere Bookstore, Nowhere Online Bookstore, Liker Land, Books.com.tw or momo.

Last week, Bitcoin reached an ATH (all-time high), breaking historical records... with respect to the Japanese yen.

This piece of news, which went largely unnoticed compared to the eventual Bitcoin to dollar ATH, is more interesting. It not only reflects the price trend of Bitcoin but also reminds us again that all stability is relative, as advocated in Moneyverse: how investment works in the multiverse (perhaps a subtle ad insertion; should that book be translated into Japanese!?).

Living in the pan-dollar area (under its grasp?), we can't help but think in terms of the dollar. When we hear about significant devaluations of currencies in South America or Africa, it feels like a distant extremity. However, this time, our focus is on Japan, physically close and intimately connected to our lives, and the yen is the world's fourth-largest currency. While Bitcoin is still more than 20% away from its ATH against the dollar, it has already surpassed its historical high against the yen. This vividly and concretely lets us feel how choosing a particular fiat currency as a standard can profoundly affect personal wealth accumulation.

Those who diligently work and convert their remaining labor into yen savings are the grounded Japanese people, possibly even craftsmen. But what about those who choose to preserve their remaining labor in dollars, gold, or Bitcoin? Are they seen as speculators and unproductive?

Back to the point, even though Bitcoin is still a distance away from its ATH against the dollar, considering the recent momentum, along with numerous positive factors like ETFs, halving and the Ethereum Dencun upgrade, no one doubts that the cryptocurrency bull market has started. At the end of 2018, when Bitcoin dropped to $3,400, I wrote ’Five Things to Do in the Crypto Winter’ to share in the misery and huddle for warmth. After that, we've seen bulls and bears, and now it's bull again. This time, I'd like to discuss five things to remember in a bull market to share in the joy, reflecting on life while making money.

Let's countdown to the five things.

In the bull market cycles of Bitcoin, as the price of the dollar continues to decline, it might be wise to seize the opportunity to accumulate dollars at lower levels.

Doesn't this seem to contradict the advice often given to regularly invest a fixed amount in Bitcoin daily and hold for the long term? The goal of increasing the quantity of Bitcoin held, essentially adopting a Bitcoin standard, hasn't changed. If you have a stable job and income, you can simply continue to hold and buy daily without even needing to know the current price. However, if one day you find yourself in a position like mine, without a job that generates disposable income, not buying some dollars during the bull market could leave you without funds to increase your Bitcoin holdings during the bear market.

Reflecting on my performance during the last bull market, this is precisely what I need to improve. I consider myself a devout holder, but having gone all-in too early, I could only watch as opportunities passed me by during the bear market, despite still having faith in blockchain technology, regardless of how low the price fell.

Everyone knows that buying low and selling high can be profitable. To avoid this advice being dismissed as trivial, here are three key points for implementation:

1. Timing: For instance, start increasing your dollar holdings as Bitcoin breaks its ATH against the dollar. Precisely timing the market to buy at the lowest and sell at the highest is impossible, but roughly catching the bull and bear cycles without being too far behind the market is feasible.

2. Like buying $100 Bitcoin daily, apply the same strategy to dollar accumulation, purchasing the dollar equivalent of 0.001 BTC daily.

3. For those with a stable income, there's no need to stop accumulating Bitcoin. Simply adjust the daily purchase amount. For example, from the selected timing, reduce the daily purchase to $50  Bitcoin. Then, in the bear market, utilize the dollars accumulated during the bull market to increase the purchase amount to $150 Bitcoin daily. This way, over approximately a four-year bull-bear cycle, only two decisions and adjustments are needed to roughly triple the daily investment in Bitcoin during the bear market compared to the bull market, significantly enhancing the return on investment.

Imagine potential emergencies, design contingency plans and conduct regular drills.

Although Warren Buffett doesn't invest in Bitcoin, his first rule, "Don't lose money," applies here just as well (can you really argue with such a principle? The master is truly wise). In a bull market, it may seem like anything you buy turns to gold, giving you a sense of surpassing Buffett himself, floating on cloud nine. However, this can lead to a dangerous complacency about sudden, wealth-wiping events, such as a market crash, losing your wallet, hacking incidents or an exchange absconding with funds.

Black swan events are unpredictable, and expecting to exit the market unscathed before a sharp downturn is unrealistic. Managing to increase your dollar holdings in a bull market is already commendable; however, accidents related to wallets and accounts can be actively prevented. Just like backing up data daily without testing it—only to find, when disaster strikes, that the data can't be recovered—wallets are similar. You might have a backup plan when you set up your wallet, but the real test often comes years later, with many potential points of failure, such as forgetting where the private key is stored.

Whether your private key is written in a notebook on your bookshelf, stored in a bank safety deposit box, or, like Dragon Balls, divided among several trusted friends, the key is to practice recovery drills regularly. This ensures that, in case of an emergency, you can truly restore your original wallet and face any situation calmly, without panic. As for avoiding hacks, the general advice is to be cautious in all things. It's better to miss out on uncertain gains than to lose assets due to careless participation in dubious airdrops.

Considering the hassle, why not just entrust it to someone else? While I don't advocate for this, I respect personal choices. Just remember, if your assets are held by an exchange or management company and something goes wrong, there might not be any recovery options available, leaving you with only legal action or silent acceptance as recourse.

FOMO (fear of missing out) is not shameful. It's fine to FOMO rationally when the time calls for it—who isn't afraid of being left out? But, when you do miss out, instead of feeling down, why not embrace JOMO, the joy of missing out?

Scholars often speak grandly, making it seem like they have all the answers, but execution is where many falter. I've shared about the significant airdrops I've received, but the truth is, I've missed countless others. Not to dwell on the distant past, just last month I missed out on the Dymension DYM airdrop, which was substantial, and it's somewhat embarrassing to admit given its visibility. However, what's done is done. Instead of harboring regrets, embrace JOMO.

JOMO is not just about brushing off missed opportunities; it's about letting go and not dwelling on the negatives. It's a proactive enjoyment of missing out. This isn't about deluding oneself in an Ah Q-style spiritual victory; it's about valuing your choices. Missing out on something means you were focusing on something else. The essence of JOMO is to invest your energy in what you're concentrating on, not on what you've missed. Why did I miss a significant DYM airdrop? Because I was engrossed in reading, watching movies, and enjoying Frieren: Beyond Journey's End, gaining insights and experiencing brilliant creativity during that same period. Whether the money or those nourishments are more valuable in the long run is debatable.

Everything involves trade-offs. Time spent here means missing out there; the same goes for assets. By investing in one asset, you naturally miss out on others. No matter our choices, we'll always miss out on many things, unless you're Dr. Strange, capable of seeing all possibilities. Opportunities abound in a bull market, but instead of trying to catch them all, better to ensure you seize at least one.

JOMO is about understanding what you miss and being grateful for what you gain.

Yes, you read it right, and I didn't write it wrong. During a bull market, it's the perfect time to question life.

The reason is simple: questioning life during a market downturn is a double whammy, almost unbearable, whereas doing so during a bull market is much easier, at least financially speaking. It's important not to become arrogant with wins; questioning yourself when you're ahead can help prevent being blinded by profits.

Financial freedom is not the ultimate goal but a means to pursue your dreams. However, if too much energy is spent chasing wealth, it's easy to forget this simple truth along the way, abandoning your ideals. Even if one day you achieve sufficient wealth, living a "post-financial freedom" life without direction can lead to a continuous pursuit of more wealth to fill the void.

To avoid becoming a slave to money, remember to question life from time to time.

The world is full of people in need at every moment. If we lack skills, have no time, or are so poor that all we have left is money, we can at least use that money to help others.

Moreover, some people aren't unable to earn money due to a lack of ability or laziness but because they dedicate their efforts to more important causes. Many organizations don't make money not because they lack business acumen but because they prioritize higher values over profit, such as citizen media that offers open reporting, or tech teams that open-source their code and contribute to the community. In turn, if we manage to earn some money, even if it's through legitimate means, it's partly due to luck and the times we live in.

If you're fortunate to earn a bit more during a bull market, consider setting aside a portion to help those in need; support public goods and the civil society, especially citizen organizations oppressed by authoritarian regimes. It's a moral obligation.

Including reading and exercise as activities to do during both bear and bull markets might seem like a deceit. But it's not. We've now reached what could be considered the sixth item on our list, an extra bonus, if you will. Moreover, repetition is normal and healthy; life shouldn't be dictated by market fluctuations.

Whether in a bull or bear market, taking care of oneself, caring for family, and staying in touch with friends are things that should continue unabated.

- Five Things to Do in the Cryptocurrency Winter

- Create your own "Dragon Balls": Decentralized management of Bitcoin inheritance

- DWeb Camp 2022: Embracing the Joy of Missing Out

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