Crypto is dirt cheap.
Volume continues to climb steadily (since May last year – as shown at the end of this post from yesterday). Capitulation happened four months ago. Yes folks, “capitulation” is what you call it when an asset like BTC sheds 85% of its value. To those who still expect “lower lows” – I just shake my head. An 85% drop wasn’t enough for you? How about some other cryptos then? My $195 NEO became $5.50 NEO. That’s a 97% drop – and STILL you want “lower lows” before investing?
I’m buying in. I think this is a great opportunity and I’m making the most of it. I already bought several 2018 dips: February, April and June – but sadly ran out of fiat to invest in the latter half of the year. Luckily for me, I have some fiat available for investing again.
No, I’m definitely not putting it all into crypto – that would be stupid. What I have done is to set aside a reasonable portion of it for buying crypto. This article is about how I am doing that.
How I buy crypto in 2019
This is not a hypothetical article. It’s not one of those “I would if I could” or “I suggest that you do ….” articles. This is what I am busy doing in real time. By writing this I’m not even practising what I preach; I’m preaching what I practise.
The market is moving sideways. I expect it to continue to move sideways until early in Q3 of 2019. Call that a calculated guess. It is a guess, but I am Bit Brain – which makes my guess better than anyone else’s guess. Because I say so.
To see how I arrived at my guestimate, read this article (including the links it contains to two other articles): https://mentormarket.io/cryptocurrencies/bit-brain/bitcoin-the-future-becomes-clearer/
Estimating that I have until the end of June to invest at optimum prices, I decided to Dollar Cost Average (DCA) my crypto buys between early February and May. I chose May as a cut-off in case I’m wrong about early Q3 and the market picks up sooner than what I expect it to.
One buy per month seems like a reasonable amount, so I split my fiat up into four. With a standard DCA strategy I would just buy, for instance, on the first day of each month. I wanted to try to refine that a little. So by making use of medium-term TA, I try to pick what I think will be the lowest price levels for the month, and then stack my buy orders accordingly.
For March that means I am stacking buy orders starting at $3600 and dropping from there. If price hits $3600 then I’ll immediately spend 10% of my March funds on BTC. From there on for roughly each $10 drop in price, I’ll put in another 10%, so that by the time price hits $3500, I’m all done buying for March. I will re-evaluate those figures prior to setting my April orders.
If I see that the month is drawing to a close and I have orders which haven’t triggered yet, then I can either leave them in place and roll them over to the next month, or I can buy at the price of the day with however much I have left remaining. This is a tricky decision and has to be made closer to the time based on short-term TA. Hopefully I don’t have to do that (as I did in February when I saw the price starting to run away while the projections looked bullish). Rolling over to the next month is dangerous as it can defeat the entire idea behind DCA.
For me there is an added step. Dollars are not my native currency, so in addition to tracking the price of BTC, I also have to track the performance of my own fiat currency against that of USD. I have created a simple matrix to deal with this issue for myself, hopefully not too many readers will sit with a similar problem. If you do have such an issue and you would like my help with it, then pop over to the Trading Pits on TIMM and tag me in a message or chat in my own trading pit if you prefer. You can even send me a private message if you want nobody else to see it, but since there is a lot of good expertise floating around on TIMM, I would normally not recommend that.
Once I have bought BTC, the investing for the month does not just stop there. That Bitcoin is linked to the fiat that paid for it, so I immediately set about making my Bitcoin untraceable. I do that using processes as discussed in this article, because my crypto is my business – what I choose to do with decentralised, non-fiat currencies has nothing to do with anybody else, especially government organisations!
Hopefully my modified DCA process will have gained me some BTC at a good average price. From that point I need to see if I can get myself an even better deal. Thanks to my diverse crypto portfolio, there are always positions in altcoins which I am seeking to improve. What I do is to prioritise the coins which I want most at the time.
If I’m looking to improve positions in, let’s say, 18 coins, I will pick maybe 10 of those for my short list. I then do a quick bit of TA on each of them, looking specifically at which are the most undervalued at the time. Finally I will buy four or five of the most undervalued coins with my newly acquired BTC, perhaps also keeping some BTC as BTC. In this way I combine Value Investing into my strategy, getting undervalued assets at a very good price. By tracking all of my buys and setting targets for how much I want to own of each crypto, I am able to prevent myself from buying too much of one and not enough of another.
Yours in crypto
“The secret to success: find out where people are going and get there first”
~ Mark Twain
“By this means (fractional reserve banking) government may secretly and unobserved, confiscate the wealth of the people, and not one man in a million will detect the theft.”
~ John Maynard Keynes