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Bitcoin bitcoin bitcoin yeah how’s it going everybody this is beat the bush today i’m gonna talk about bitcoins obviously the last video i made was when bitcoin was about ten thousand dollars today it stands at fourteen thousand dollars already with this rapid price movement people are getting a little bit edgy asking me to do a remake video and just kind of give
Additional thoughts of what to do going on from here but first i have an unboxing of an actual bitcoin here this is a physical bitcoin i’m quite excited because i bought this from china and they have this really really slow shipping i think it was like 30 to 39 days for shipping because i essentially paid like two dollars in 10 cents for this thing and they’re
Able to somehow ship this thing including postage all the way over here so here it is it’s really neat it is in a case but i really want to handle this thing i don’t care if it tarnishes is only two dollars but oh wow so here’s a bitcoin again without the case and then the back of it has all the circuitry this is my real cougar ran gold coin from south africa now
I just weighed this this is about 1.2 ounce and this one is slightly larger and the thickness is about the same but it weighs one ounce so you can see that this gold coin is actually you know a little bit denser than this but it has some good weight to it being one ounce it’s pretty hefty well this is quite fun having an actual bitcoin now i wanted to get this
To sort of commemorate me actually owning crypto currencies and having one of them just to hold around and just kind of remind myself that yes i do hold something like this this thing runs for about $2 or so on natalie expressed by the way so i’ll let t-rex hold on to this for now and it can hold on to my other gold coin as well if you don’t know how to invest in
Bitcoin and if you’re interested in it you can check out my coin base referral link down in the video description below where you can get $10 free as long as you buy in i think 200 dollars worth of bitcoin then you get $10 added on into your account and i do recommend to go in very very slowly here more like 0.5 percent of your total portfolio every single month
That’s how slow i recommend you to do it right now so what i noticed recently with bitcoin and everybody probably notice as well that the price increase has been increasing in rate now when you have an exponential increase it basically means the percentage of increase is constant so it’s kind of like a rocket ship in space where if you have a constant thrust it’s
Gonna get faster and faster exponential is kind of like that to sort of like in a portfolio where let’s say you have an 8% gain every single year and then you compound this over many many years and the actual amount at the end it’s gonna look like it’s an exponential however with bitcoin recently over the last year the rate of increase is actually not staying still
It’s actually accelerating if you look at the price history of bitcoin over all of the history you can see that it basically you know it’s pretty flat and then all of a sudden recently it just goes bam it’s like a hockey stick and it increases very quickly over the last year alone it increased 17 fold this is 1728 percent over the last month it increased 96 percent
Over the last week it increased 44% now you can do a little bit of math here and figure out what the rate of increase for every single day is for each of those periods that i mentioned over a one-year period if you have a 17 fold game basically you have 0.7 percent compounded gains every single day if you did the same thing for the last 30 days which is 96 percent
Game is essentially a 2.3 percent gain every single day now you start with something okay 2.3 percent gain the first day and then the next day you also gain 2.3 percent and so on and so forth for 30 days and at the end of 30 days you’ll get 96 percent gain over the last seven days there’s a forty four percent gain and you do the same thing that means every single
Day you have a 5.3 percent gain every single day now what i’m trying to illustrate here is that the games has been accelerating this is all i’m trying to say five percent of $14,000 is about seven hundred dollars so by the time you watch this video it’s likely going to be increased a little bit and by the end of the day of when i release video is likely going
To approach $15,000 now what i really wanted to do was analyze the chart basically pull some data out put it into excel and just kind of look at it on my own look at it on the log plot because apparently i can’t find out many log plots on bitcoin pricing if you look at the linear plot of this thing it’s basically going straight up it’s actually not a good thing
Because this is very very dangerous for new investor nuvve investor that buys into it there’s a lot of price risk if it ever drops back down to normal then there’s gonna be a lot of losses and a lot of people will be really hurt by this sort of correction and i see this coming it’s coming so i converted it to a log plot over here and you can see that in a log scale
It actually does not look that crazy after all however in 2011 you also see it a seller right increase in pricing and then right afterwards it kind of dropped back down by roughly one order of magnitude now what does one order of magnitude it means if it was $20 it dropped down to $2 now imagine if you invested $14,000 you bought one big coin and it dropped one
Order of magnitude which means 90% loss suddenly $14,000 became your $1400 now that’s going to hurt really really badly over there in 2013 something like that also happened it peaked around two hundred three hundred dollars and then it dropped by some but not too much however in the next peak in 2013 you see it reach around $1,000 over the next one and a half year
It’s sort of kind of tapered down it slowly came down to about minus seventy five percent so it dropped down to like about two hundred fifty dollars after this it’ll take another one and a half years before it reached the point of the peak of about $1,000 so what can you learn from this bitcoin price is really really volatile and sometimes it might get ahead of
Itself the current pricing of bitcoin does look like it’s a little bit ahead of itself but if you want to kind of eyeball the chart and then go you know where is it gonna go next you know i would i ball a at like 20,000 30,000 40,000 it could be anywhere in between that anywhere between now and probably 80,000 100,000 even– and eventually it’s going to sort of
Fall back to the mean over here not quite all the way down to $1,000 it seems because it’s just kind of going upwards it has a slope to it so if it ever falls down it’s going to fall down to the average price now what is the average price is there a valuation to it no it isn’t i’m just reading this chart and just kind of eyeballing it and you’ll notice at the very
Early part of the chart over here the slope is like kind of like really high after the initial crazy crazy slope it came back down the second slope is a little bit more tamed after the second bubble pop you can see that the slope is yet again not as steep as the first slope or the second slope i have the percent gain per day and i listed it across every single day
That bitcoin traded and you can see it’s very very noisy and you can see at some point in a single day it actually increased by 0.5 which is 50% now this is a bit too noisy for me i kind of want to average things out so what i did is take seven of those days and just kind of averaged them so that i can see things you know a little bit smoother will be called a seven
Day moving average and when you do that yeah it does smooth things out a little bit and then you can see you know the spikes aren’t as crazy but still from this per day price gain average over seven days it’s still a bit noisy so i went to a price change every single week and then i take the moving average of that and then you can see it’s starting to smooth out
A little bit more finally i’m doing a price game every single week doing a 30 day moving average here what you can see here in the first year of trading there are you know very high spikes where you know it goes up to like point three which is 30% gained per week average over 30 days and you know the second really really larger spike over here is 50 percent gain
Per week average over 30 days now you can see the next bubble here around 2013 where the price gained is about 30 sent every single week for 30 days fast-forward to today which is 2017 you’ll see that the average gain per week average over 30 days is roughly you know 10% every single week in comparison the price gain is not as strong as before and it kind of looks
Like it’s going that way the initial run-up is really really high the second run up it’s not as prominent as the first one so and just from extrapolation it kind of seems like this current run-up is not going to be as prominent as those previous price gains where are you gonna see 30% gain every single week on average over 30 days now this is kind of hard to kind
Of digest because it’s in sort of like an average of an average i go look on the times article where they had a poll so i voted myself i think personally that it’s in a bubble and here you’ll see the result of that and you’ll see that you know it’s pretty 50/50 half of the people think that it’s a bubble strongly think it’s a bubble and half thinks that it’s fairly
Valued and then you got a whole bunch of people voting in between so you want to think about it this way i made a video about bitcoin reaching $10,000 a while ago if you bought bitcoin at $10,000 and then you saw your money increase by 40 percent then wow you must be a pretty smart investor to ignore me basically what i see with a lot of people that are super pro
Bitcoin is that i don’t think they’re selling any of it at all i think they’re hoarding as much as they can and possibly they might be taking credit card loans out taking you know cash advances or something and buying bitcoin and basically holding onto it thinking you know the more the better this is where the greed kicks in and this is where the typical bubble
Psychology comes in back in the dot-com days i heard more people hold on to their assets see it go sky-high and then fall back down they held on to everything so i don’t quite understand this for me i am just selling a little bit here and there of course i still have the majority of my holdings but what i’m essentially doing is i certainly did not buy any bitcoin
Ever since 2600 when i talked about it in the first place ever since then i’ve been taking a little bit off the top of course it might reach you know $20,000 $30,000 $40,000 in that you know i’ll be like i’ll feel bad i guess you know maybe i could have waited that much longer and then you know rather than cashing out early and not making all the games i could
Cash out much later but the way i’ve seen any kind of huge run up like this it’s super hard to predict that’s why i recommend dollar cost averaging out i don’t know when it’s gonna pop but now i’ve truly believed that it will eventually pop and it might take a month two months three months but certainly within six months i think if i were to give a best guess of
When it’ll actually pop i’d say $30,000 $40,000 because eventually we’re gonna see the rate of increase increase even more we see it jump up 1,000 $2,000 now next week we might see it jump up $3,000 and then it’s just gonna increase from there and from this action people are gonna see oh my gosh easy money more and more people are gonna jump in let me go back to
The example of 2013 where it ran up to about a thousand dollars let’s say you saw it run up back then and then you bought into it and then it slowly trickle downwards okay over the next one and a half years it trickled down – 75 percent so you’re gonna keep on seeing your investment go down and down so let’s say you put in $10,000 if history repeated itself then
You’re gonna see a trickle down $9,000 $8,000 and this is really really grueling over a period of one and a half years so you’re gonna have to watch your money go down basically about eight hundred dollars every single month or so and it’ll you know notch down a little bit at a time and then you’ll eventually see it bottomed out at $2,500 and if you have your
Life savings in it and i feel like there’s quite a bit of people out there doing this but they’re probably not willing to admit this i think i saw a comment or two saying that you know they basically invested everything they have in bitcoin and you know bitcoin is a future and whatever if you have all your money in there and let’s say it does reduce in value then
You gonna be feeling pretty bad over the period of two three years now i’m not saying there’s no future for bitcoin for those people that says oh bitcoin is the future yeah i look at the technology and i’m like you know it’s something you know that can be used in the future it’s gonna be decentralized you know then you have all this nice features all these nice
Technology features of bitcoin i’m not contesting the usefulness of it and the good store of value however it’s not a good currency because of the price fluctuations if you just look at the rapid price increase you realize that this is in a localized bubble if you keep it long term okay i think it’ll be fine okay even right now if you buy at $14,000 if you have
The patience to wait say i don’t know five years i bet it might do something like okay let’s say $14,000 is the peak now it might drop down to let’s say $4,000 okay over a period of one or two years and then you know over a couple years it’s gonna come back up to $14,000 but most people don’t have this type of patience if it ever falls down by 80% people are gonna
Panic people are gonna sell and people are going to lose a lot of money in the process so what should you do as an investor i personally am not buying any bitcoin at all but if you’re interested in buying bitcoin and i suggest to buy very very slowly like so so slowly right now if you just want to get in and just kind of partake in you know the festivities and
You know every time it goes up at $1,000 and you can go hooray right then only invest about 10% of your total portfolio in total and you cannot buy all of this at once you need to you know go even slower now i would recommend go like half a percent so one twentieth of the 10% that you would put in so let’s say you have one hundred thousand dollars to invest totally
And you know you don’t put all of that in let’s say you only have ten thousand dollars that you would put in bitcoin most of it is in us dollars cash and then you would only put in five hundred dollars every single month okay this is how slowly i would you to invest right now because of the extreme run-up of the price if you buy into it now and if it drops down
In price you’re gonna lose a lot of time and time is what’s important for an investor because you don’t have the time you don’t want to waste five years of just having your money sit idle in it and wait for it to you know claw back your money basically so i do hold the majority of my bitcoin holdings but i am kind of dollar-cost averaging out and i sold i don’t
Know three rounds or four rounds of it already once at seven thousand once at ten thousand and another time at fourteen thousand or something like that don’t forget to give me a like on this video comment down below let me know when you think the peak of bitcoins gonna be do you think it’s gonna be 15,000 20,000 30,000 40,000 or higher if you’re interested in
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Transcribed from video
Bitcoin BitCoin BitCOIN BITCOIN By BeatTheBush
