Previously I’ve decided to keep bitcoin around 5-10% as I’ve started investing earlier this year.

The logic and timing might be flawed, but I’ve decided to increase that to at least 10-15%, maybe up to 20% max now.

(Edit – as of 25/11/2024 I am keeping it around 10-14%, since MSTR is leveraged bitcoin and is even more volatile)

I want to make sure I am doing it with sound logic so I am writing a post here to keep track of my thought on that.

The recent rally from 70k to 90k+

Trump was elected.

That means less regulation, promise to make bitcoin reserve, pro-crypto policies etc.

The market immediate rally and bitcoin jumps from 70k to 90k pretty much at an instant.

Right now at 25/11 it’s ranged bounded at around 97-98k for a few days now.

My guess is, it should break through 100k soon and from there it should be another rally, up to 130-150k before started to get ranged bounded again.

Chasing at the top? Or just the beginning?

I’ve always believed bitcoin has potential to $1M+ back when it was 10k.

But I could be wrong and it could be zero.

so I invested HK$10k.

Went up to 70k in 2021, drop back down to <20k afterward with the FTX fiasco.

With the ETFs and wall street, now possibly US joining, the probability of going to zero has significantly reduced.

However of course, the upside also reduced now, and I don’t think it could go another 100x from here. But 10x is still reasonable and that would still be life-changing.

So I am deciding to increase the allocation not because I am chasing or because it has risen so much; but, because it has become safer and probably less volatile from here on, also with less return potential.

Bitcoin has seen 70%+ drawdown on many occasions in the past.

My guess is, it should see probably max 30-50% or less drawdowns for the most part from now on.

No profit taking bitcoin at 100k – good or bad decision?

Previously, I was thinking to stay at 10% of portfolio max, which would allow me to trim and profit-take after 100k.

But now I’ve decided to move to 10-14% (min8-max16) and it’s around 12% at 100k.

So I won’t be doing profit taking at least until 120k+.

Would it drop back down below 100k? Possible, but I doubt it at this point anyways.

And, at least getting to the 10-12% range for almost free, instead of having to invest.

Short term outlook for BTC

Here is my guess at 25/11. Would be interesting to look back a few months later.

Right now it is at 97k. Have not hit the 100k mark yet.

I am guessing within Dec it should hit 100k.

And it would range bound around 100k for a little while – because some earlier investors might be profit taking.

Also it’s just a nice, round number that is a big mental block.

However, as the people that need to sell have sold, and the media starts talking about the 100k more, and with companies like MSTR and others raising funds to hold more bitcoins long-term, the upside pressure will remain.

Once the Trump policies on crypto get more clear and there are catalysts to break it through 100k, then the sellers would all have disappeared and it will probably rocket to at least 130-150k before settling down.

I am probably staying put at 12% portfolio for now but who knows with this thesis and also long term bullish view, I might want to increase it just a tad.

Also analyzing from the stage it is at this moment, I think it’s definitely not euphoria yet.

My theory is:

• Stage 1 – crypto investors are getting in – DONE
• Stage 2 – normal long-term portfolio investors who don’t know about bitcoins are getting in – HAPPENING
• Stage 3 – amateur “investors” are getting in – NOT YET?

The price should be at least 130-150k before stage 3 is over … then some negative catalyst will probably drive it back under 100k.

Then more range bound and maybe even back to 70-80k??? … before taking another leg up to 150k-200k+ and beyond. Maybe in 2025 or 2026?

Too heavy in Gold?

Another reason for the increase in % of bitcoin is, the gold is really quite too heavy.

This last few months I’ve reduced the cash positions, removed all bonds position and moved almost all into gold.

Right now it’s 45% gold and the recent 10% drop was major for my portfolio.

Fortunately bitcoin and tesla made up for the loss.

(25/11 edit – also fortunately there is a V-shaped recovery and the Tesla + bitcoin gains are huge for this month now).

But made me think deeply about the “risk” of too much gold.

Nice analogy I heard today

Here is a paradigm shift I had after hearing from Ah Ju.

So the last generation got rich by investing in real estate in Hong Kong.

Anyone who bought in the 70s or the 80s, my parent’s generation, they would be rich just by having a property.

OR – in the second wave, buying during 01-04, those are also super rich by now.

But here is the thing. It wouldn’t have been easy to buy back then.

Especially in the 2nd wave, when it was crashing and SARS was happening.

Nobody wanted to buy, and nobody could foresee the biggest housing bull market in history.

The thing is, right now I can’t hope to get rich with the old methods.

BUT. New methods are available. Question is if you have the guts.

Bitcoin is the new real estate – maybe. And Tesla – maybe.

In the past 10+ years, it was Apple and Meta and Amazon and Nvidia. Those ships have sailed, more or less.

The next ships that will sail are which ones? It’s difficult to know, but for me right now it could be bitcoin and tesla.

Maybe I should buy more Tesla as well …? It’s gone up a lot lately though. Think about that more.