Should Bitcoin be held or sold?

Source: Daoshuo Blockchain

During an online exchange last weekend, when I answered a reader's question about whether to keep 25% of the position and never sell it, I talked about some different ways I might take after the current round of Bitcoin reaches its peak.

This question happened to be asked by a reader at the end of the article in the past two days.

In the last cycle, when the bull market was close to madness, I mentioned in the article that I would take two measures: one is to sell at a high position, and the other is to keep at least (roughly) 20% to 30% of the position without cashing out and keep it forever.

The reason why I kept some positions and never cashed them out was based on the long-term bullish view of Bitcoin and Ethereum, which refers to at least the next 10 to 20 years.

The history of the past decade has left us with countless painful cases: most of the Bitcoin holders who got off the train in the past few years have perfectly missed the century-long opportunity that Bitcoin may bring to them to cross the class - most of them have missed the bigger gains in the future because of the temptation of doing swing trading.

I am also worried that I will make the same mistake, but I know that I may not be able to resist the temptation of swing trading, so I set a rule for myself to always hold at least part of the position.

In previous articles, I have said more than once that after reading the books of predecessors such as Buffett, Munger and Fisher this year, I have a different understanding of the strategies of "holding long and not selling" and "buying low and selling high".

"Holding long and not selling" does not mean mechanically holding a target and never selling it, but that in many cases, according to the standards of these predecessors in selecting those targets, there are actually not many opportunities to sell.

"Buying low and selling high" is a price-driven behavior on the surface, but in essence it has a completely different thinking path.

What many people call "buying low and selling high" is actually a decision made by investors based on predicting market trends. Countless cases have shown that, except for a few geniuses in human history, most investors cannot predict the market in a long-term, stable and accurate manner. Once a prediction is wrong, all the previous gains of investors may fall short.

What about the "buy low and sell high" of these predecessors?

Their "buy low and sell high" is not based on the prediction of the future trend of the market, but on the judgment of the "intrinsic value" of the target they hold, and then compare it with the market price.

We can clearly see the contrast between these two ideas with a simple case.

For example, the price of Apple stock today is $200.

If you make predictions based on the future market trend, you will do the following:

I estimate that the market will fall tomorrow, so I will sell Apple today; I estimate that the market will rise tomorrow, so I will buy Apple today.

If you compare the intrinsic value of Apple with the price, you will do the following:

I estimate that the actual value of Apple is now $500, so I will buy it today; I estimate that the actual value of Apple is now $50, so I will sell it today.

If we think about Bitcoin in the way these predecessors did, then my core logic should be to estimate the "intrinsic value" of Bitcoin, and then compare this value with the price to derive my operation method.

The specific idea is probably like this:

I said earlier that I am optimistic about the development of Bitcoin in the next 10 years, so my fundamental starting point is to estimate the value of Bitcoin in 10 years.

If I estimate that the "value" of Bitcoin will reach $300,000 per coin in 10 years, then there is no need to sell it at the price of $100,000 today. Moreover, in these 10 years, even if you consider leaving a safe space, Bitcoins within $200,000 are cheap and worth buying.

According to this idea, in theory, as long as Bitcoin does not reach $300,000 in these 10 years, I should have held it instead of selling it.

So putting aside emotions, what I should do rationally is very clear.

But I know that people's habitual thinking may make it difficult for me to accept this idea in a short period of time, so I can try to change my habits little by little-------starting from this cycle.