When you buy bitcoin for the first time, you are entering an exciting new world whose potential seems limitless. Often, you enter this world for the money. You've heard or heard stories of people who have made a lot of money buying bitcoin. Maybe you've been intrigued to see that famous hedge fund managers are buying bitcoins on a massive scale .
In short, you're eager not to miss what looks like an interesting opportunity in a world where monetary inflation seems to have no limits.
However, you have not yet taken the time to define a strategy. You have simply chosen to buy bitcoin. This is an essential first step, but you can't stop there if you want to take full advantage of bitcoin.
Defining a strategy with bitcoin involves understanding the redefinition of the time horizon that bitcoin evokes
You have to go further, as I keep explaining, by really trying to understand why bitcoin is. Furthermore, it seems essential to define a strategy that fits your profile and interests. The hardest part will be sticking to it no matter what. However, it's easier not to panic when the market turns red if you have a strategy to stick to.
Here comes the redefinition of the time horizon.
The stock market has three different time horizons:
- The short term is something less than 2 years.
- The medium-term period corresponds to a duration between 2 and 10 years.
- The long term corresponds to anything beyond 10 years.
In the bitcoin world, things are a little different, as you will see. In my opinion, the short term corresponds to the market cycle of bitcoin. As a reminder, the market cycle is the period between two bitcoin deployment events.
Therefore, the short-term plan with bitcoin is 4 years.
The medium term will be 10 years, allowing you to stay in the market for at least two halving events. Finally, the long-term plan, which is the right horizon in my eyes, is forever. Yes, you read that correctly. I wrote forever.
I wrote this back in early April 2020, shortly after Bitcoin's Black Thursday, when its price fell below $4,000 in March 2020:" Bitcoin HODLer one day, Bitcoin HODLer forever ".
Becoming a HODLer forever means you believe in the hyperbitcoinization of the world in the future
Everything that has happened since then has confirmed this vision. When I write HODLer Forever, it means I believe in the hyperbitcoinization of the world in the future. I think it will be possible to use my bitcoins as a means of payment in everyday life, and this bitcoin will also have reached the stage of a unit of account.
We're not there yet, I readily admit. However, this is my strategy with bitcoin. This is also Michael J. Sailer, as he often says. It may not be yours, as each person must determine which is the best strategy for their future based on their profile and interests.
This article is meant to make you understand the importance of defining your strategy if you haven't already. This strategy should take into account the definition of short, medium and long term with bitcoin, which is a complete paradigm shift. Thus, investing in bitcoin for less than 4 years takes serious risks because you never know which phase of the market you will be in within a 4-year cycle.
Sure, you can have an idea, but no guarantee. It's like choosing to be a trader when your biggest natural advantage with bitcoin is the time you're willing to HODL no matter what.
Once you've pinpointed your strategy, feel free to let me know in the comments which strategy fits and why. It's always interesting to find out how others view their bitcoin investments.