I know that investing strategies vary based on individual situations, but since you’re a young investor, I’m curious about your approach. Do you typically hold through both bull and bear markets, riding out the cycles? Or do you prefer to sell a significant portion at the peak of a bull market to have enough capital to reinvest…
I know that investing strategies vary based on individual situations, but since you’re a young investor, I’m curious about your approach. Do you typically hold through both bull and bear markets, riding out the cycles? Or do you prefer to sell a significant portion at the peak of a bull market to have enough capital to reinvest once the bear market bottoms out?
Would love to hear your thoughts on how you navigate market cycles!
Great question. To date, I am HODL only. I have been around long enough, and have enough experience now that I don't feel the pull of FOMO, nor the spike of fear as much anymore. I genuinely view my BTC as my long term savings, and I treat it as such.
The way I personally solve my portfolio is by thinking about 'what am I saving for?'
- My BTC is for things I need in 5-10yrs time which are expensive (think clearing mortgage, kids, schooling etc).
- My Gold is for things I need in the next 1-3yrs (House deposit, emergency capital, investment opportunity)
- My Cash and income services the next 6-months
So with this as context, right now, I have no need to trade in and out of my BTC. Instead, I prefer to NOT buy high, and buy more aggressively when it is low. Rather than trying to time exits and entries, I reduce the degrees of freedom to just timing better entries for my long term savings, and live my life outside of that.
This works for me personally. That said, Check the Analyst is very aware there are many in the audience who do plan to sell some near the top, and I will of course make the necessary noise when I think such an event is near or close to help connect those dots.
I appreciate your honest answer—it really makes sense. You’re essentially applying the same strategy as buying a good stock at a low entry point and holding it for the long term. That’s sound investing, period. I’m hopeful that as more institutions and countries accumulate Bitcoin as long-term holders, we’ll see increased stability and less severe bear markets in the future.
I am sure the ETFs have a major impact upon STH trading as it is now possible to hold BTC in a registered account and speculate with the click of a button.
Yes and no. Many of the metrics we use to track human sentiment (such as SOPR) only captures coins which are transacting onchain. The idea is we're surveying the people who are spending onchain, and determining their sentiment. We can then apply that 'sentiment profile' to the ETFs, and more often than not, fear in SOPR == outflows in ETF == Low or negative funding rates in futures markets.
When we want to establish confidence in a thesis about a population, we don't have to survey 100% of the population, just a statistically significant subset.
I have huge respect for your work so appreciate the elaboration. On a related topic, it suggests to me how incredibly early we still are with BTC as I would think there would be way more trad investors in it with the advent of the ETFs, increased accessibility and trad investment firms promoting it to clients.
Yes, and this is why I think the SBR is really interesting. Not so much that the gov buys, I don't care too much for that idea. Instead, the signalling it sends to conservative institutions that it is now ok to buy and hold Bitcoin on the balance sheet. This takes the career risk away which has no doubt been a barrier.
The insti world moves slowly, but now they have the green light to get teams spinning the right wheels.
So long as the randomly selected subset reflects the population and I don’t think it does properly as the profile of tradfi investors that represent a growing portion of ETF investors is far more conservative, I would think, and options traders don’t have the same emotional attachment to it. But I may be wrong. I’d be interested in seeing how the change in sentiment that you track correlates with ETF inflows and outflows.
Im not sure I agree fully here, but understand the perspective.
After studying the breakdown of ETF holdings, around 20-25% is institutional, and of that capital, a lot of it is from hedge funds and arbitrage desks. The remaining 75% to 80% of the ETFs is retail, and I would wager a large proportion of them are the very same HODLers who are now allocating their retirement accounts.
Based on the work I have done, I have a pretty strong conviction that the split of HODLer to institutional mentality is still quite relevant across the marketplace. Where institutions may have 'classic smarts', the retail pleb HODLer has 'street smarts'. They have learned by trial and error to think in a generally institutional way after experiencing several 80% drawdowns and then recoveries.
Similarly, hedge funds who has a PnL statement to protect will behave a lot more like a flakey trader who with hop on when times are good, and leave when the momentum dies off.
Ultimately, human sentiment affects everyone, and only the serious pros are able to train themselves to avoid it. When the sentiment runs hot amongst the uninformed, that is also where the strongest momentum attracts the arbitrageurs, and signals to the smart money it may be time to lighten up into strength.
Of course we always operate on incomplete information, but this is where my thinking is at thus far on the topic. I certainly expect it to change and evolve over time, and it already is (we're seeing it in several metrics already). That said, the underlying factors of fear and greed remain, just at a different amplitude.
To add one more relevant anecdote, I was talking with a friend who has been engaging with institutions recently to build out a Bitcoin product. One of the bigger hurdles faced was trying to convince them that Bitcoin HOLDers are actually SUPER conservative. The insti's couldn't understand, aren't they into speculative volatile gambling??
No, they hold the winning ticket, and will be extremely conservative with how it is handled. They despite the concept of yield because they do not trust the mechanisms through which yield is earned.
Hey James,
I know that investing strategies vary based on individual situations, but since you’re a young investor, I’m curious about your approach. Do you typically hold through both bull and bear markets, riding out the cycles? Or do you prefer to sell a significant portion at the peak of a bull market to have enough capital to reinvest once the bear market bottoms out?
Would love to hear your thoughts on how you navigate market cycles!
Thanks!
Great question. To date, I am HODL only. I have been around long enough, and have enough experience now that I don't feel the pull of FOMO, nor the spike of fear as much anymore. I genuinely view my BTC as my long term savings, and I treat it as such.
The way I personally solve my portfolio is by thinking about 'what am I saving for?'
- My BTC is for things I need in 5-10yrs time which are expensive (think clearing mortgage, kids, schooling etc).
- My Gold is for things I need in the next 1-3yrs (House deposit, emergency capital, investment opportunity)
- My Cash and income services the next 6-months
So with this as context, right now, I have no need to trade in and out of my BTC. Instead, I prefer to NOT buy high, and buy more aggressively when it is low. Rather than trying to time exits and entries, I reduce the degrees of freedom to just timing better entries for my long term savings, and live my life outside of that.
This works for me personally. That said, Check the Analyst is very aware there are many in the audience who do plan to sell some near the top, and I will of course make the necessary noise when I think such an event is near or close to help connect those dots.
I appreciate your honest answer—it really makes sense. You’re essentially applying the same strategy as buying a good stock at a low entry point and holding it for the long term. That’s sound investing, period. I’m hopeful that as more institutions and countries accumulate Bitcoin as long-term holders, we’ll see increased stability and less severe bear markets in the future.
Nailed it, yes indeed!
I am sure the ETFs have a major impact upon STH trading as it is now possible to hold BTC in a registered account and speculate with the click of a button.
Yes and no. Many of the metrics we use to track human sentiment (such as SOPR) only captures coins which are transacting onchain. The idea is we're surveying the people who are spending onchain, and determining their sentiment. We can then apply that 'sentiment profile' to the ETFs, and more often than not, fear in SOPR == outflows in ETF == Low or negative funding rates in futures markets.
When we want to establish confidence in a thesis about a population, we don't have to survey 100% of the population, just a statistically significant subset.
I have huge respect for your work so appreciate the elaboration. On a related topic, it suggests to me how incredibly early we still are with BTC as I would think there would be way more trad investors in it with the advent of the ETFs, increased accessibility and trad investment firms promoting it to clients.
Yes, and this is why I think the SBR is really interesting. Not so much that the gov buys, I don't care too much for that idea. Instead, the signalling it sends to conservative institutions that it is now ok to buy and hold Bitcoin on the balance sheet. This takes the career risk away which has no doubt been a barrier.
The insti world moves slowly, but now they have the green light to get teams spinning the right wheels.
So long as the randomly selected subset reflects the population and I don’t think it does properly as the profile of tradfi investors that represent a growing portion of ETF investors is far more conservative, I would think, and options traders don’t have the same emotional attachment to it. But I may be wrong. I’d be interested in seeing how the change in sentiment that you track correlates with ETF inflows and outflows.
Im not sure I agree fully here, but understand the perspective.
After studying the breakdown of ETF holdings, around 20-25% is institutional, and of that capital, a lot of it is from hedge funds and arbitrage desks. The remaining 75% to 80% of the ETFs is retail, and I would wager a large proportion of them are the very same HODLers who are now allocating their retirement accounts.
Based on the work I have done, I have a pretty strong conviction that the split of HODLer to institutional mentality is still quite relevant across the marketplace. Where institutions may have 'classic smarts', the retail pleb HODLer has 'street smarts'. They have learned by trial and error to think in a generally institutional way after experiencing several 80% drawdowns and then recoveries.
Similarly, hedge funds who has a PnL statement to protect will behave a lot more like a flakey trader who with hop on when times are good, and leave when the momentum dies off.
Ultimately, human sentiment affects everyone, and only the serious pros are able to train themselves to avoid it. When the sentiment runs hot amongst the uninformed, that is also where the strongest momentum attracts the arbitrageurs, and signals to the smart money it may be time to lighten up into strength.
Of course we always operate on incomplete information, but this is where my thinking is at thus far on the topic. I certainly expect it to change and evolve over time, and it already is (we're seeing it in several metrics already). That said, the underlying factors of fear and greed remain, just at a different amplitude.
To add one more relevant anecdote, I was talking with a friend who has been engaging with institutions recently to build out a Bitcoin product. One of the bigger hurdles faced was trying to convince them that Bitcoin HOLDers are actually SUPER conservative. The insti's couldn't understand, aren't they into speculative volatile gambling??
No, they hold the winning ticket, and will be extremely conservative with how it is handled. They despite the concept of yield because they do not trust the mechanisms through which yield is earned.