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Friday, December 24, 2021

How much money will I make if I invest $1000 in Bitcoin?

invest $1000 in Bitcoin

How much money will I make if I invest $1000 in Bitcoin?

According to a famous Wall Street saying, "When the taxi driver also tells his passenger that he has invested in the stock market, then it is time to sell everything."

It seems that Bitcoin has flown over the mouth of any "financial ignoramus" in Italy and the USA. Newspapers and Facebook boards are full of them. Even at the Sports Bars, between a last-minute penalty and the VAR, there is talk of Bitcoin. Self-styled cryptocurrency experts are springing up around every corner. Even the most unsuccessful characters in the business world have reinvented themselves, bitcoin gurus.


On the other hand, the news is sensational: this Bitcoin, whatever it is,  has risen by 1,000% in one year. That is, if you had invested 1,000 euros in Bitcoin a year ago, you would have ended up with a profit of 10,000 euros. Inviting. A phrase like that said to Italians continuously on their bills is like making a group of people who have fasted for 20 days smell a roast chicken.


Indian financial intermediary, after rising nearly 1,200% in one year, has not caused the same stir. Why is nobody talking about the China Investment Fund, which has always grown by over 1,200% in the last year? Even the Japanese restaurant chain Pepper Food Service Co, famous for its steaks and pork cutlets, was up 1,000%. Every year there are shares in the world that increase their value tenfold.

But Bitcoin is different. Bitcoin is innovative, it is a new currency, a symbol of changing times. It is a currency issued by software that requires the same amount of electricity consumed by Morocco to be extracted. 


In reality,  a coin is nothing innovative in itself, many have appeared and disappeared over the centuries. Furthermore, companies have been producing their virtual currencies for decades. There are supermarket points, airline miles, Trenitalia Freccia points ... When we went to bumper cars as children, we exchanged lire for tokens, with the luck that the token had a fixed value and its price could not vary by 20, 30, 50% in minutes. On the other hand, it would be absurd to imagine the opposite. Think about it. Go to the bumper car and buy two BitGettoniScontro, which entitle you to two 10-minute rides. One you use right away and have a blast. The next day you come back happy, ready for another good run. You show your token, but the bumper car replies: "Sorry, today the ride is worth 5 minutes instead of 10,

invest $1000 in Bitcoin

Speaking of Bitcoin, this happens overnight.

Nothing innovative about the currency itself, nothing particularly anarchic or destabilizing on states. In fact, in the end, we will always exchange Bitcoin for dollars and Euros, or Bitcoin for services.

But if as a means of exchange it has nothing innovative and is highly unstable… what sense does it make?


Bitcoin, between safe-haven assets and bubbles

Some consider it a kind of haven, as an alternative to gold. Gold is also not used in the supermarket (apart from exceptions ), and even with gold, it is hoped for an increase in its value. Analysts of major banks, such as  JP Morgan's Boss, warn us: when the world falls back into uncertainty,  at the next financial tsunami, everyone will realize that there is nothing more ephemeral than a Bitcoin. While the gold bar is at least a tangible asset, which can be touched and used to create not only jewelry but also computers, dental implants ...


When there is a crisis, there is fear. And when there is fear, the brain that commands is the reptilian one, which thinks very simply: if I see it, it exists. If I don't see it, it doesn't exist. And so I don't want it. For the reptilian brain, Bitcoin is not eaten. Let's combine this with the high volatility of bitcoin and the omelet seems assured.

Yet it has been a high-yielding investment until now, as have the shares of the companies mentioned above. But you may not know that thanks to the leverage effect, the same performance, and the same risks can be achieved with any financial product. In currencies, we can easily make 1,000% in one day, if we use adequate leverage and the right dose of sedatives for when we see our portfolio swing from + 90% to -100% in seconds.


Many, including Sole24Ore, have compared the trend of Bitcoin to the infamous tulip bubble of the 1600s.

Thanks to the internet, the speed, and the massification of phenomena, there is a lot of potentials, although it may be a bubble, it is impossible to know and predict when it will burst. This is, on the other hand, one of the arguments that any advocate of Bitcoin will bring you. It is the law of supply and demand, he will say. As Bitcoin is tied to an extremely limited supply, it is bound to grow.

We will see shortly what the economist himself who formulated the laws of supply and demand would think.


The fast and dizzying climb can only create an even more disastrous fall, even affecting the roast behind the smoke. Where the smoke is Bitcoin and the roast is the Blockchain. This is a common thought of the defeatists, who in the meantime are missing out on huge profits.

We can't deny that anyone who invested in Bitcoin years ago certainly made some good money. But we cannot deny that net of the right intuition and the right considerations, he had a great blow to the ass.

It would also be interesting to know how many have kept Bitcoins for all these years and have become millionaires in real currencies. Bitcoin is worse than a roller coaster, with vertical climbs and collapses reaching as much as 60% in just a few days.

Tell us, how many have had the balls or the unconsciousness to hold an investment that, now and then and suddenly, halves its value in a few hours?


The truth is, investing in Bitcoin, without the right training, can make you poor. For real. Because if you have the misfortune of making money quickly, you will begin to believe that investing in child's play:  just jump on the right horse and make lots of money. On the next ride, full of pride, you will raise the stakes. But if in the meantime you have not created the necessary BASIS of financial culture and risk management, you will lose your pants, as has happened in all the bubbles of history. But don't we remember the investor plight during the Dot-com bubble?


When in 5 months you go 2,500% thanks to dot-coms

We refresh your memory, with the enlightening made in Italy story of the Tiscali title.

Tiscali went public with a price of $ 46 at the opening and $ 73 at the close of the market, increasing its value by 60% in just one day. Towards the middle of the month, the stock was suspended on the upside and then resumed prices on 19/11/1999, reaching $ 157.5 per share. At the end of the month, the company informed investors that subscribers had reached 710k and were growing by 32k every week. This data was eagerly awaited by the market: new subscribers were an important index of growth.


Thus the company enjoyed considerable development and investors fell into a situation of euphoria, also dictated by the news that arrived. The stock continued to rise disproportionately throughout December and went from $ 185 at the beginning of the month to $ 400 on 27/12/99. On February 8 it had reached $ 875 per share. On this same date, the president of Tiscali Renato Soru declared that the shares were, despite everything, still undervalued and destined to rise. It was close to an all-time high, and in fact, February closed with the price of $ 951. With FewMarch which marked the important date: 06/03/2000, the stock reached 1197 $. An absolute record.

The stock had gone from $ 46 in October to $1197 in March,  an increase of 2500%  in just over 5 months from its entry on the stock exchange. Crazy figures… Bitcoin is a great blowjob in comparison!


Tiscali then went from a maximum of $ 1197 to $ 40 in just over 50 days. The decline was as sudden and fast as the growth: investors who bought during the stock's rising phase were then unable to sell when they saw it collapse, hoping that it was a momentary situation and that soon the stock would rise again. People continued to believe in Tiscali, but things did not go the way they hoped. The $ 40 stock dropped to $ 30 and then to $ 15. Today Tiscali, after various recapitalizations, is worth the greedy figure of 3 cents.

Yet the shares of Tiscali were all in all undervalued. The same thing that is said now about Bitcoin.

The euphoria and unwitting investment, fueled by the big headlines, ruined hundreds of thousands of savers.

Unfortunately, we have developed a mentality that seeks the lucky break that can solve all problems, often chasing even the impossible.


Make investments, not castles in the air.

Do you know  John Maynard Keynes? The one who gave the name to the Keynesian revolution. If you studied economics at university, they probably explained how this gentleman was the most influential person of the twentieth century, the father of macroeconomics and the law of supply and demand. The same that Bitcoin investment promoters use to push you to invest in cryptocurrencies without a minimum of financial preparation.


Well,  Keynes would have a very precise idea about Bitcoin. In fact, few know that he made an avalanche of money on the stock exchange thanks to the Theory of castles in the air.


Keynes didn't care about numbers and economic trends. He understood that to earn on the stock market it is enough to understand what is the next "story" the public will believe in and, therefore, which stocks will be pumped beyond belief and then (after they have bestowed large profits on the few experts who came out at the right time ) crumble quickly in the hands of the poor "investors" of the Sports Bar.

Humans love to build castles in the air and hear the fairy tales that support their desires. Buying stocks that will never stop rising in price.

This was the only technique Keynes employed; no numbers and no calculations, just a little common sense and a fair knowledge of human weaknesses.

By capitalizing on Keynes's great investment lesson and adding a little risk management, we can transform ourselves from people who burst along with bubbles to truly knowledgeable investors.

How to become an informed investor

Aiming for a kick in the ass, winning the lottery, doubling the BitGettone price is a losing strategy in the long run. Maybe you will buy a new car, but you will be the same "losers" as before: with the new car but always at the mercy of events. Without being in control of your money. You will continue to ignore that there are thousands of these opportunities and that they can be seized, with the right amount of knowledge, every year, forever. Maybe by earning a little less, but by getting an automatic annuity for the years to come.


If you are in every way trying to make some money with Bitcoin without proper financial training, without proper risk management, without all those tools that bring the odds of earning to your side, know that this is normal. It just means that you perceive the world as poor, as a place without opportunity. And then you are led to throwing yourself on the only one you can see.


This way of acting only confirms to your unconscious that the world is without opportunities. Just like Pavlov's famous dogs, keep salivating.

In these cases, it is necessary to break the pattern, to get out of the ego prison to finally see the light.


The world is full of opportunities. At the beginning of the article, we listed just two or three in the financial field. You didn't see them, yet they existed, they were there. If for the first time we open our eyes, awakening from the sleep that has enveloped us for some time, we will discover that we can even choose the opportunity that best suits us, our needs. We even have the luxury of choosing the one that suits us best.

Increasing our culture of money has become mandatory if we are to live in the new financial era and learn to see the opportunities that open up every day before our eyes.

Investing consciously means not only knowing what risks we run but also how to limit them. To do this, we need to implement a strategy that warns us exactly when the risk is against us.


It is useless to follow the trend of the defeatists, who predict the bursting of a bubble from one memento to another. Equally useless to follow the ideas of the Czech "believers", those who believe in the infinite growth of Bitcoin, in the investment of the century.


The only truth is that we don't have to care if a market is a bubble or about to burst. The role of the conscious investor is not to predict the future, but to manage the present. Yes, having an investment strategy means managing the present in the best possible way. It means putting the ego aside, it means not seeking pride in predicting the bursting of a bubble, or the rise of the investment of the future.

invest $1000 in Bitcoin

The only secret is to have a strategy

An investment strategy consists in creating a series of steps, always the same and replicable, which measure the  Risk / Opportunity ratio and which suggest whether investing in a product in a market is currently favorable. When the same strategy tells us that the investment is no longer favorable, we exit by taking the profit obtained up to that moment. A strategy not only tells you when to enter but also when it is right to exit. Without this small but important detail, we end up exactly like Tiscali's investors, who thought they could earn forever, thought that the shares would rise, but they found themselves with a handful of flies. They had no strategy and invested in dreams, in what the newspapers or friends at the bar said. A strategy also tells you how much you have to risk, how much you have to invest, so as not to be bankrupt if the investment goes wrong for any reason. Too often we have talked to people who have invested everything in the "great opportunity of life" and found themselves bankrupt. As one of our gurus, Ray Dalio says, we need to diversify, do not put all the eggs in one basket, otherwise if the latter falls, the omelet is insured. And how to choose where to put our eggs? Thanks to a solid and certified strategy. Certainly not listening to those who shout the loudest at the market.


A strategy can be replicated thousands of times, it goes beyond the bubbles and trends of the moment, but at the same time it can exploit them all.


For months, for example, we have been testing our SurfingThePips strategy, right on Bitcoin, with exceptional results. A strategy born on other markets, such as those of currencies, can be adapted to any market and allows you to obtain constant returns in the long term, saying goodbye to the search for the butt bubble, to stress and remaining elastic, not at the mercy of the opinions of others. but in full control of our financial future. The most interesting thing is that a well-created strategy allows you to earn both during the climbs and the descents, but the newspapers do not tell you this.

Simplifying and summarizing a conscious investment strategy is characterized by the following factors


  •  It tells you which instruments to allocate your savings to

  •  It tells you which of these tools currently can give you a good chance of earning

  •  It tells you if the probability is higher by betting up or down

  •  It tells you what the risk associated with the investment is

  •  It tells you how to limit this risk and how much money to invest

  •  It tells you at what price to enter and at what price to exit

  •  It tells you when to check and what to do

 Eliminate your ego and nurture inner tranquility

You don't need to have a degree in nuclear engineering, just become a good surfer.  Wait for the right wave for your abilities, with the right surfboard for that type of wave (not necessarily the most expensive), then stand up, stay balanced, and have fun throughout the process.


You can surf the castle in the air of Bitcoin and turn smoke to roast, and you can do it with all the speculative bubbles of future history. Before jumping into the rough waves of the financial sea, however, we advise you to take a few surfing lessons and have your strategy as an aware investor.

See you on the next wave. 

 

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