How Much Bitcoin Should I Own?

in hive-167922 •  29 days ago 

Anthony Pompliano is a well-known Bitcoin investor. He invests in Bitcoin but he also invests in crypto-related startups through his firm Morgan Creek Digital (an example of a company he has invested in is BlockFi - a crypto financial services provider).

Read this guide on LeoPedia

He was recently on the Bill Bert podcast with Bill Burr and Bert Kreischer and was educating them on the nuances and values of the Bitcoin world. Bill and Bert are comedians and are far from “financial regulars”. Clearly, they have a solid foundation of finances and money, but they aren’t your typical finance types.

This is what made their conversation so fascinating and important. Pomp went through the fundamentals of what Bitcoin is and the questions that Bill and Bert had were the most foundational questions that you would expect from any average person on the street who has no exposure to cryptocurrencies.

Bill Burr: “How do I go from the current system to the new system without going from the frying pan into the fray?”

I thought this question was particularly great. One of the most common arguments to buying Bitcoin/opting-in to crypto is this idea that you’re just going from one monetary system to another. Why would we jump ship from something that everyone else is using (and has been using for hundreds of years) and opt for this new digital currency that is complex and berated in the media?

Pomp’s answer prompted the topic of this LeoPedia article and answers a core question to any Bitcoin newcomer:

How Much Bitcoin Should I Own?

Pomp: "The way I think about a portfolio is what percent confidence do you have in the new one [Bitcoin] versus the old one [legacy financial system]?"

“Most people are 99% old one. 1% in Bitcoin or 2%. Me, I’m younger and I’ve got a higher risk tolerance. I understand this stuff in a nuanced way, so I’m 50/50. I took 50% of my net worth and put it in the new system and bought Bitcoin.”

This answer is one of the best that I’ve heard when it comes to framing the idea of opting-in to Bitcoin. Whether you’re someone who already owns some crypto and has dabbled in the space or someone who has never even setup a wallet and tried to purchase Bitcoin, this is one of the best questions you could ask yourself:

What is your confidence level in the old system vs. the new system?

Bitcoin is the new system. It’s only 11 years old and it is not perfect. If you talk to people who are heavily invested (not just invested in terms of money, but in terms of time and brain space), then they’ll point out all the flaws of the legacy financial system and fiat currencies like the U.S. Dollar and proclaim the benefits of being in Bitcoin.

With Bitcoin, we have a decentralized, peer-to-peer global currency that cannot be controlled by any central bank or government.

If you live in a place like Venezuela or Lebanon, you experience the woes of a corrupt central bank and a poorly managed currency system first-hand. That is why it’s so easy to convince people in those places to buy Bitcoin and opt-out of their legacy system. In fact, many of those people don’t need any convincing.. you tell them that there is a system of money that cannot be controlled by their central bank, cannot be stolen from them by their government, etc. and they are fully on board.

Their % confidence in Bitcoin is easily higher than their % confidence in their local currency.

Answer This Question For Yourself

Here is my message to anyone who's trying to answer this question - whether you’re new to crypto or have been in the space for a while:

Nobody can tell you how much Bitcoin you should own. There are no financial advisors out there who can properly answer this question for you. Instead, you need to educate yourself about the nuances of Bitcoin and why this new system of currency matters.

In doing your own research, you should also setup a wallet and buy just a small amount of Bitcoin. Something that you’re willing to lose, send to others and play around with. Having just a little Bitcoin changes everything because it allows you to see the crypto space from the vantage point of an actual user.. the insight you’ll gain from this practice is far more than you’ll ever get from a book or YouTube video.

Alternatively (or even parallel to a Bitcoin wallet), I recommend getting a Hive/LeoFinance Account. One of the most common arguments to this idea of getting a Bitcoin wallet and playing around with the currency is that many people around the globe don’t have even a small amount of money that they can just throw around and lose. The thing I like about a Hive wallet is that you can earn crypto rather than just buy it. So you can invest $0 and still learn about crypto from the vantage point of a user. I wrote an extensive guide about Hive, which you can find Here.

As you dive deeper and deeper into the ideas of Bitcoin/crypto and how the new system works, your confidence level in it will either increase or decrease. If you find that you become more and more confident that Bitcoin is a better system than the legacy financial systems (as I and others like Pomp have experienced over the past several years), then you can continually re-evaluate what % of your net worth is in the legacy system compared to the new system.

Pomp is 50-50 in the old system and the new system. He doesn’t believe the old system will just die off, but he does believe that the new system has a decent probability of replacing the old system as a global reserve currency.

My percentages break down as about 20-80 in the old system versus the new system. The majority of my net worth is in crypto and that makes perfect sense to me. I believe that there is a high probability that Bitcoin and cryptocurrencies will be around for the foreseeable future and will only continue to grow in use cases and real-world adoption. On top of that (and following a similar line of reasoning as Pomp), I’m young, highly risk-tolerant and have been working/researching in the crypto space full-time for the past 4 years.

We built the LeoFinance community (and resources like LeoPedia) with the exact purpose of teaching people about the new system. If you want to learn more about crypto & finance and even get hands-on help, feel free to jump-in to our Discord and we’ll help you out. You can also create an account and start earning cryptocurrencies on our social media platform at https://leofinance.io.


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Bitcoin (and other crypto) isn't ready for use until it can be used without giving up privacy and decentralization, the things that make a crypto a crypto and not fiat.

Currently, there's no way to use bitcoin even partially privately, and no way to use it without involving centralized government and banking services! Bitcoin has SO FAR failed to do what it said it was going to do.

More :)

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lol that’s my sentiment. Can’t get enough

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I also believe crypto will be the future. Old paper money will become obsolete. It is very useful to have a visionary mind to be able to make the right moves today for the next years

I agree, one of the most important things any of us can do is simply stay educated

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I agree. Education is what we all need continuously in our life

I stared out at less than a percent and continue to move more into BTC I’m now at around 12% and want to move to 20% soon I think 80/20 is a fair ratio to have at the moment! 50 still seems a bit extreme for me but as I watch my local economy take a battering I would probably move to those levels too especially once BTC hits around 55k+ then it would reach 1 SaT to one cent here parity so it would be a no brainer to start moving to 50%

I'm gradually drifting more towards crypto, with a dollar cost averaging fiat to crypto buy-in strategy every month - and I'm old and fairly risk averse!

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depending on what assets I take in the calculation I am at 10% or 30% but I just buy a bit more every month and when (hopefully soon) the price goes up that % will change anyway.
The most important now is to make that BTC or crypto work for you instead of just sitting there like a gold bar which is good now as it is gaining value or even worse, money in the bank where you keep losing value every day.

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0,1 BTC is fine i think.

Thanks for the wonderful article!!!! I also believe that crypto in general will eventually become more dominant than cash, BUT it has to be easier to use for the layman. Since I'm already technically inclined, I already own BTC and about 100+ alt coins, but I can't see "buying a cup of coffee" with BTC as the example normally goes.

On the one hand, it's VERY convenient for buying things of a higher value domestically and internationally, but it will NEVER replace cash unless there's an easy, low cost, and expedient way to make small transactions. Right now it's more of a store of value and a gateway currency to trading other cryptos.

I know that there are a lot of alt coins out there trying to solve the transaction volume, ease of use, and transaction fee problems, but we're not quite there yet. We're still on the bleeding edge of the technology in the early days.

If we want any crypto (including BTC) to replace current fiat, then a coin or whatever would need to have low transaction fees, confirm extremely quickly (in seconds or less), be easier to use than cash, and be able to handle more transactions per second than all of the worlds credit / debit card processors combined. Only then will crypto be able to overtake FIAT.... If you can explain to your grandparents how to use it, and they really get it, then whichever currency can do that (while being relatively stable) is going to be a success....

Right now, it's just not there.... If you want BTC you have to either exchange fiat for it, mine it, or be paid in it, the value can fluctuate quite a bit in the short term, and each transaction takes 10-30 minutes + to confirm. Additionally, if everyone is using BTC, then the transaction fees are high.... Can you imagine paying $12 transaction fee for a 99 cent cup of coffee? Don't think so... :-) Ethereum's vision is also awesome and 10x more capable than BTC, but the CryptoKitties fiasco proved that the network / protocol is still not strong enough to handle an adequate amount of transactions.

Right now I believe crypto is the future! It's an investment, but there will be a lot of volatility world shaking events, and churn before it becomes the next big thing. I think that there will be multiple "winner" coins and a ton of "loser" coins, but it's hard to predict the future on which will be which at this point!

Thanks for listening, and keep up the good work!

It depends how I count my assets. I can't fairly value my pension, registered investment savings (name varies by country/scheme), car or house in BTC, so best exclude them. (I know some of u can).

  ·  29 days ago Reveal Comment