The other weekend I went to a co-working space in a meet-up. The meet-up was about finding motivated individuals for a possible JV or find suitable Co-founders. PS: I was looking for Co-founders to join TheMoneyMongers team.
When my turn came to pitch about my work and the idea everyone’s eyes popped up as I said the word “Bitcoin.”
The surprise was because the government of India has no clear stance on cryptocurrencies, and many educated individuals also consider it illegal.
However, I was fortunate to meet some sorted souls during the network session after my pitch. These highly motivated people with a positive perspective on crypto had a lot to ask.
No to my surprise, the most asked question after the legality-illegality of Bitcoin was:
- How much bitcoin I should have?
- How much bitcoin to own?
These questions made me realize; some people are way beyond other laggards. Crypto’s value proposition has already convinced them. They were already thinking about securing themselves because they understood it.
I am sure you are one of these motivated individuals who has the same question, and my answer to you also would be the same. So stick around and read it till the end to know my answer.
How Many/Much Bitcoin Should You Own?
My answer to the amazing people I met was straightforward.
I said, there is no one size fits all answer to this. It depends individual to individual. Their level of conviction and their personal lives also.
Further added, Bitcoin is a hard subject to digest because it is highly interdisciplinary atleast 5-6 subjects for starters. No one is an expert in so many areas.
At most, you will find that you are an expert in either one or two of those, but that’s not sufficient to build your conviction.
So the simple answer to the questions: how much you should own in Bitcoin is simple. You should own bitcoins in proportion to the level of your understanding of it.
For example, you have an investment portfolio of $1 million, and you think your level of understanding and conviction is at 1%. Then you should go for $10,000 of investment, and this will fetch you around 1 BTC as per the prices at the time of writing.
This way, you will not over commit yourself, and still, 1% allocation of your wealth will have a significant probability of increasing your portfolio’s performance.
See this excellent analogy to understand more:
Some numbers to ponder when thinking about value of adding #Bitcoin to your portfolio
Endowments have $613B in Assets. Average return over past 5 yrs was mediocre 7.2%
Had they allocated 1% to $BTC return would’ve been 9.2%
Had #Bitcoin gone to zero, return would’ve been 7%
— Mark W. Yusko #TwoPointOneQuadrillion (@MarkYusko) May 23, 2019
A similar thing with your portfolio is also possible.
Answers like, you should have 1 Bitcoin or 10 Bitcoin, or you should be in the Vladimir club of Bitcoin are wrong and misleading.
You will find such answers littered on the crypto Twitter especially, and you should stay away.
But the approach I am telling you is the best thing you can do for starters. Even the famous Bitcoin speakers and evangelist whom I have the utmost respect for- Andreas Antonoplous says the same:
How Much Bitcoin To Own?
Apart from that, of course, you should try to be a wholecoiner of Bitcoin but not by overstretching yourself or by selling your house.
Instead, you can start systematically accumulating BTC by investing little every month or week until you have 1 BTC.
But the point here is not to over-focus on 1 BTC but rather to commit to the process. So that you can dollar-cost average at the same time accumulate the most amount of BTC in a fixed amount of capital that you are willing to invest in it.
Lastly, the chances of becoming a wholecoiner, i.e. to have 1 BTC or more will continue to become bleaker as the days pass by, and more people realized Bitcoin’s true worth !!
If you want to know more about it, read our guide on investing in Bitcoin where I have explained in detail. Also, if you have any questions feel free to shoot to us in the comments below and to get more perspective on Bitcoin, subscribe to my Bitcoin Tuesday Musings Newsletter 🙂