JayJuanGee
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How much alt coin diversification is needed? 0%?


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March 20, 2014, 10:17:04 AM

Yay...err, no. I can see we're heading for under 600. FML, I bought at 670.


I think that a lot of us are in a similar situation with average BTC buy-ins  in the upper 600s and even in the 700s or higher.   I am currently at $686 average BTC buy-in rate - which includes my transaction fees, and even though I find it a little bit frustrating to be at this seemingly low BTC price level, I am continuing to use these low BTC prices as buying opportunities to buy more BTC than I had expected to be able to buy on a fairly regular basis... and gambling that ultimately the BTC fundamentals have NOT changed in a negative way and if anything on an ongoing basis the BTC fundamentals are getting more and more solid with more and more big investors coming into the BTC arena and nearly daily basis good news pertaining to more and more ways to liquidate BTC. 

Surely, we have a ways to go in ease of use of BTC and inspiring public confidence regarding security of their coins, but if you are into BTC for an 18 month to 24 month period or possibly more, we are going to be looking pretty pretty at that point b/c I have only been willing and able to invest so much fiat into BTC at any one time in the front end of my investment....   Accordingly, my quantity of BTC is much larger than what I had expected it to be, at this time.

Average buy-in is also my buying policy. It seems USD 600 is fairly low but who knows to which area it will be heading down and how long it will last at that area?

 For example, if price goes down to area usd 300 and remain for 1 year, I will be very frustrated with my average buy-in policy, as my stock is already heavy, repeating last average shares compensate very little  to my cost, unless I increase average share by 3times or more. Regrettably my financial position does not allow 3x.

Does a simple average buy-in works on bitcoin?


Personally, I think that dollar cost averaging works on anything - so long as the price of the asset goes up at some point.  B/c even in the scenario that you describe of staying at $300 for a long period.. then just keep buying once a month or once a week or whatever is your time interval.... sooner or later your average buy in price will approach $300.

The problem would come if the price is on a never ending downward trajectory b/c even though your average buy in price continues to go down, the price of the asset never goes up.... .. but at least you would probably still be able to recover quite a bit, unless the asset suddenly goes to zero, before you recognize the need to cash out.