During the online discussion over the weekend, a reader raised the question:
"Bitcoin is continuously reaching new highs; should we start considering the price situation to exit?"
I am very cautious about this.
This does not mean that I won't sell or hold permanently, but rather that for high-quality assets like Bitcoin and Ethereum, I will increasingly evaluate whether their prices are excessively high when selling at peaks. If the prices are not excessively high but just relatively high, I tend to continue holding rather than selling.
Therefore, in the future, I will likely only consider selling them under three conditions:
- I need the money;
- Their fundamentals have changed;
- I believe their prices are excessively high.
I won't elaborate on the first two conditions here.
Regarding what constitutes "excessively high," there is a strong subjective component. Based on the current state of the crypto ecosystem, if Bitcoin's price is below $150,000 and Ethereum's price is below $6,000 this year, I will not consider selling them.
As for whether I would sell if they exceed these two prices, it will depend on the situation at that time; I cannot judge that now.
Why?
Because as I have progressed, I increasingly understand the advice from some veterans in the investment field:
- High-quality assets in the world are very rare; when investors discover a high-quality asset, they must cherish it and hold onto it;
- Many investors who have gained substantial returns from investments have become friends with time, allowing high-quality assets to accumulate value through the fermentation of time, bringing returns.
The two pieces of advice listed here are not aimed at trading participants but are directed at participants like me who are completely unskilled in trading.
In my view, Bitcoin and Ethereum are undoubtedly rare high-quality assets, and what I need to do is to operate according to the above two pieces of advice: let time add value to them and hold onto them as much as possible.
I believe many readers are very familiar with the history of Bitcoin. Regarding who has truly gained substantial returns during this process, I believe many readers are even more familiar with it—long-term holding while completely ignoring short-term fluctuations. The vast majority of early participants who engaged in swing trading during this process have essentially sold off their coins, and the losses from such operations are far from comparable to the returns obtained from those who held through the volatility.
History does not repeat itself; Bitcoin is unlikely to replicate the myth of explosive growth it once had. However, as a relatively optimistic participant, I remain quite optimistic about Bitcoin's future valuation:
I believe I will see Bitcoin rise to $1 million within my lifetime, and this time frame will not be too long—around 10 to 15 years from now, we will see this goal.
In other words, I believe that in 10 to 15 years, Bitcoin will have at least ten times the upside potential compared to now.
I am very satisfied with this return.
Given this, as long as it does not rise excessively at any point during this process, I will not concern myself with it and will quietly wait for that moment to arrive.
In addition to my optimistic forecast for the future making me more willing to adopt a conservative strategy, a more important point is:
At Bitcoin's current price level ($120,000), once sold, it will likely be very difficult for retail investors with limited funds to buy back in.
People are strongly influenced by psychology: if something is sold at $120,000, many will likely not want to buy back when it drops to $110,000 or $100,000 because there is no significant psychological difference between $110,000, $100,000, and $120,000. It may only be when it drops to $80,000 or $60,000 that many investors who sold will consider buying back in.
But who can guarantee that Bitcoin will definitely drop to $80,000 or $60,000?
If it does not drop to those levels, the vast majority of investors will bid farewell to Bitcoin and will never be able to get back on this train.
The situation now is completely different from several years ago when Bitcoin was only a few thousand dollars. Back then, if someone sold off their holdings, they could regret it and tighten their belts for a few months to save money and buy it back. At the current price level, the vast majority of salaried retail investors would probably not be able to buy even one Bitcoin, even if they went two years without eating or drinking.
Therefore, I advise investors who still hold at least one Bitcoin: unless absolutely necessary and not very confident in your trading abilities, do not casually consider "selling high and buying low" for Bitcoin and Ethereum, which have already reached this price level.
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