I’m a big fan of Bitcoin and over the years made many more buys than sells – in a nutshell, my default position, whether the market has gone up or down, has been to HODL.
However, that is starting to change – despite my view that I believe Bitcoin will go up in value hugely in the future. I am a long term Bitcoin bull and think that it will beat its all time high in the next few years.
In the short term, though, there’s no getting away from the fact that Bitcoin is going down. Despite a few rallies and spikes it has been dropping pretty consistently since the New Year, and now has half the value it did then (£5k vs £10k).
I had got used to the price of Bitcoin going steadily down and hadn’t thought too much about it. I had bought most of mine at £1k – £3k so I wasn’t bothered. Then on 25th July everything changed for me.
Oddly what woke me from my stupor was an email from BullionByPost telling me that the Gold price was beginning to climb. Was it particularly low, I wondered? I idly looked into it and found that, incredibly, at £935/ounce (spot price) it was at the lowest it had been for 8 months, and very nearly the lowest it had been for 18 months.That woke me up. Here I was sitting on a stack of Bitcoin slowly decreasing in value while missing out on other investments. Being a keen proponent of hedging, this made no sense.
I Immediately looked into the Bitcoin price, which I had ignored for some time, and saw that it had been rising, erratically, for exactly a month to a peak of £6400 but since 6am that morning (25th) had been dropping sharply. It was now mid evening.
I took one Bitcoin out of cold storage (on a Ledger Nano) and transferred it to Pro.Coinbase. As soon as the transaction went through, at about 1130pm, I sold it. I got £6300.
By 0020 I had bought 7 one ounce gold coins for an average of £976 each. The total was £6343. That seemed like a very good hour’s work.
Just 36 hours later the value of Bitcoin had sunk to £6000. I decided it was time to start active trading again, if only to hedge against what seemed like inevitable losses if I kept staying out of the market.
I came up with a plan to offload Bitcoin at the best price I could get, ready to buy it back once it had gone lower.
More to come in the next blog post.