Bull Markets Get Easier
Don't underestimate your ability to rationalize your greed.
THIS IS NOT GOING TO GO THE WAY YOU THINK IT IS
My first bull market, I started buying bitcoin in October 2017, towards the end of the third cycle bull run. Number go up technology pulled me in.
I had no idea what I was getting into.
I saw the previous first two cycles have massive bull runs in 2011 and 2013 followed by massive 90% and 85% crashes. I was told this time would be different. Hyperbitcoinization was here. We won the block size wars in August of 2017, the hard forks were going to zero. The OG’s had me MEGA bullish.
Bitcoin was soon breaking ten thousand for the first time, on its way to twenty thousand dollars per bitcoin by the end of 2017, and then, they told me, it was on its way to one million dollars! What a genius I was getting in so early before hyperbitcoinization. But I didn’t have enough bitcoin. And with hyperbitcoinization setting in, imminently, the only way I could get my hands on more bitcoin was to sell all my bitcoin and YOLO into bitcoin miners!
I had done the calculations, my math was flawless. By June of 2018 I had sold all my bitcoin for the new S9 bitcoin miners. And by this time hash was beginning to explode higher. Little did I know, my residential electricity costs were also exploding higher the more miners I plugged in.
And the price just kept falling.
A perfect storm.
By December of 2018 I was bleeding out way more money to pay for electricity than what it cost on an exchange to buy bitcoin directly at three thousand dollars a bitcoin. And those calculations I was sure were correct, were complete garbage, as the hash just continued to savagely rip higher making my shiny new S9’s nothing more than really expensive paper weights that I bought at the top of the market.
Hyperbitcoinization did not arrive. I totally rekt myself chasing after more gains and rationalizing my decisions. It was a valuable christening in the bull run meat grinder for me, which would go on to serve me well in the subsequent bull run.
STAY HUMBLE STACK SATS
I dusted myself off, studied dollar cost averaging, and changed my strategy. I didn’t have the cheap electricity or the mining producer relationships to have competitive costs for mining. I needed to just go to the market and buy from exchanges or even better peer to peer, so that’s what I did.
Over the next two years I had managed to claw back to the number of bitcoins I had before I sold them all in 2018, which was fortunate, it is very difficult to get back to what you start with, the price runs away from you very quickly. And I was just in time, because by late 2020 we were back in the fourth cycles massive bull run.
And this time was different, I thought. I had a new strategy, dollar cost average every paycheck. All in. And I was studying the charts. I found a pattern, and I knew with certainty the next top was going to play out in line with the 2013 and 2017 tops. I devised the perfect plan, in 2021 I’d sell the top on the 1.618 fibonacci level at a cool $200,000, and easily double my bitcoin stack. The outcome was inevitable.
I had done my homework, this was a sure thing. I was so certain of this blow off top price that I devised an even better idea. I could take a loan out against my bitcoin and quadruple my bitcoin stack! On November 8, 2021 I was ready to pull the trigger on an Unchained Capital bitcoin backed loan against my entire bitcoin stack. The cycle was playing out exactly like 2013. We had the first massive run up earlier in the year, and we were months away from the ultimate top of $200,000.
But before I went ahead, a faint voice in my head whispered to me —
“Wait, motherfucker. You made this mistake before. You were certain the bitcoin mining was going to work out because of hyperbitcoinization and you were wrong. Now you are back at it, certain the price is going to go up to where you think it is going to go. And what if you are wrong again asshole. Can you handle losing all of your bitcoin stack a second time? Think about it.”
Thankfully, I thought about it. I heeded my inner 2017 bear market lesson.
No, I could not handle losing all of my bitcoin again. I worked too hard to get back to what I once lost, and given the price appreciation I would likely never get back to that level again.
On that fateful November 8th day, I wrote back to Unchained the following email, that hangs on my wall as a reminder to myself, stay humble, stack sats:
Hi - - - -,
As discussed I have wrestled with this idea of putting my bitcoin up for collateral for at least two years now. I’ve worked so hard to get to where I am in terms of my sat stack over the past four years. If for some crazy reason bitcoin price drops by 70% from here I get liquidated. I just couldn’t live with myself if I lost my sats like that. The price is irrelevant, bitcoin will outlive crazy price movements in the long term, but I’m too risk adverse, I just can’t bring myself to putting up my sats to acquire more. I’ve really tried to rationalize it will be ok but who knows when the central banks remove their fingers from the printer button, or some big exchange pulls a Mt. Gox, or both happen? Astronomically unlikely. But I just cant risk my sats. I want to pull the trigger on this so badly, it’s almost free money. I am leveraged to the hilt in the fiat world, lol. But putting up my sats?! Alas, I just can’t do it.
Thank you very much for your time. Discussing with you was a great experience, and I will surely recommend you guys if anyone is looking to pull the trigger on this. Your growth in the past two years and the professional approach you guys take has certainly inched me closer. Maybe in another couple years I’ll come back to you guys and go through with it if it makes sense for me.
All the best.
Thanks, - - - -
It was the lessons learned from the 2017 Bull Run, that helped me keep my stack in the 2021 Bull Run.
Had I pulled the trigger on that loan, I would have lost everything. I wrote that email on November 8, 2021 when the price was $67,803. The cycle top was two days later, November 10, 2021 and the price hit $69,000. I nearly levered long at the absolute top. What an incredibly horrific train wreck I very narrowly avoided. Unbelievable.
If you are new here, you are going to come up with very good reasons why you should YOLO into a new idea that is going to be better than simply staying humble and stacking sats this cycle. The fear of missing out, the rationalizations that you only live once are nearly impossible to overcome. But with focus, determination, and conviction, you can do it. There is a reason everyone constantly repeats the mantra “stay humble, stack sats.”
If I had made that loan, I would have lost everything, for a second time. It just wasn’t worth it. And thankfully I was able to cool my ego, to stay humble, be happy with the massive gains I had already experienced, and just continue to stack sats, and stay solvent.
MATURING YOUR TEMPERMENT
Bitcoin BEAR markets are tough, they force you to confirm your conviction, to study what you might be missing, and reach a place of ride or die mentality. But the BULL markets are also surprisingly very challenging. In the euphoria of life changing gains, your brain will attempt to deceive you. Don’t let it. I am here pleading to you, and to my future self, do not listen to the siren’s songs.
When the price breaks $70,000 in 2024/2025, stay, humble stack sats. When it cracks through $100,000, stay humble stack sats. If and or when it smashes $200,000, stay the fuck humble you dumb ass monkey. Stick to what got you here. Head down, stack sats.
The fear of missing out on more opportunity will drive you to do things that will cause you to lose your entire stack of bitcoin whether that is chasing yield, aping into mining without a good plan, or levering up your bitcoin because you are certain on the way the market is going to go, or on some new fancy shiny idea the scammers got for you, to steal your bitcoin away from you.
The reality is that bitcoin is good money, and that is good enough. In fact, it is more than good enough, it is by far the best performing asset every year, and all you need to do to benefit from this amazing performance is to Simply Bitcoin, and what does that mean? It means;
staying humble and stacking sats,
being your own custodian, and
staying solvent.
The destination is Simply Bitcoin, but the path is full of rationalized terrible ideas. This 2024/2025 Bull Run is not going to go the way you think it is.
However, so long as you stick to the basics, stack sats, self custody, and remain solvent, you can handle whatever the market has in store for you, and perhaps more importantly, whatever your dumb monkey brain has in store for you.
And the next bull run in 2028/2029 will be that much easier to navigate. Welcome to the start of the rest of your life, and welcome, to Simply Bitcoin!
We’re Gonna Make It, fam.
Nothing stops this train.
Cheers!