Now, I’ve been investing with the ultimate goal of self-sufficiency from passive income for some time. I’ll just potter around whilst the money looks after itself. Maybe I’ll write some more about my strategies and how they’re coming along in another post but for the purposes of this one I need to start with the admission that until recently I had not even considered investing in crypto currency.
Once the initial rush of excitement I felt after making my first purchase of BTC had subsided I was left with the feeling that I needed some physical to represent my fledgling investment – the solution being to purchase a cheap BTC cion from EBAY for £2 - as shown in thumbnail. Funny how I don’t feel the same way about my Vanguard Investor account - but that’s another story.
With the glistening replica coin in my hand, I suddenly began to feel small though. Supposing this was a real coin it would be worth around £30,000 whereas the amount I had actually purchased was a mere 0.00497 of a BTC.
I got wondering - which led me to the question:
“How likely is it that I will ever own a full real Bitcoin?”
At this point it’s worth sharing that my strategy with BTC is to buy monthly and hold for at least 5 years. So here goes with a couple scenarios:
The starting point for my answer is If things stay the same and my money buys the same tiny amount of BTC each month then that’s adding on 0.00497 until you get above 1 – some 202 months or best part of 17 years. Sounds more like a mortgage term to me and is way beyond any timescale I can live with - it’s also ignoring the price growth potential that underpins this investment. Verdict: 1 BTC = highly unlikely.
Next, thinking in my 5 year timescale might contain some significant downturn, let’s have a look at how the effects of “dollar averaging” could shorten the previous excessive term. After the Dec 17 high, and the following plunge, it took 3 years until the BTC returned to the same levels. During this period there were opportunities to buy at all prices from £15,000 down to below £3,000 - and all the way back up again too. Now, I know this is a big ask but supposing history was to repeat itself with a similar shaped curve, then level monthly purchases could accumulate something in the region of a more appealing 0.39 BTC over a notional 3 year period. Verdict: 1 BTC = more feasible but still a big ask.
Some stuff I’ve ruled out:
As with all of my investments I have limits of exposure to risk – worst case with BTC is total loss. Probably not with BTC itself I’m more worried about failure of wallet platform. With this in mind I’m not considering upping my monthly amount. I know that with volatile markets there are lots of opportunities for trading and coin-swapping but I’ll need to know way more about what I’m doing before I consider it worth the risk.
Just a couple of scenarios to bookend the infinite possibilities in between. Obviously the days are long gone when you can buy BTC with money that you’ve found down the back of the sofa. Overall verdict: Looks to me like I’ll have to accept that I got on the bus to late to contemplate ever being the owner of a whole BTC.
That is not to say of course that this excludes the possibility that I might still end up with a decent holding though…
