If I could write a letter to Elon Musk of Tesla (NASDAQ:TSLA), I’d probably start it off like this: “Mr. Musk, I’m the piece of garbage investment analyst that casts doubt on your electric vehicle firm. But I’m also a happy piece of garbage because unlike other CEOs, you directly changed my life.” I’ll never forget what he did for Bitcoin (CCC:BTC-USD) and the entire cryptocurrency complex.
As I’m sure you’ve heard, news came out early Monday morning that Tesla had bought $1.5 billion worth of Bitcoin. Not only that, Musk wants his company to accept the blockchain reward token as payment for his highly valued Tesla EVs.
When you consider that his tweets alone are enough to send joke cryptos like Dogecoin (CCC:DOGE-USD) to the moon, it should come as no surprise that BTC subsequently hit all-time highs.
Interestingly, my goal was for Bitcoin to hit $50,000. I went on record for that price target in early January of this year. Just a little over a month, BTC is within striking distance of this remarkable benchmark. While I strongly believe that we’re on the cusp of that price and even higher, I just had to get out.
Recently, with the insane run-up in out-of-favor companies like GameStop (NYSE:GME), I came across a new term: diamond hands. Apparently, this is the notion that you hold your position through thick and thin, never blinking as the “evil” hedge funds impose gallons of red ink on the charts. Eventually, you’ll have your day in the sun.
Perhaps I bailed out prematurely. Indeed, I’m almost sure I did. However, with all the craziness that has transpired, I couldn’t hang on. Diamond hands I am not.
But if we’re going to focus on what my hands don’t have, then no discussion is complete without mentioning debt. Yeah, I got rid of that and it’s thanks to Musk and perhaps some help from above.
With Bitcoin, I Had to Think Rationally
Devout Christians and Jews will be familiar with Ecclesiastes 5:12, which states,
The sleep of a labouring man is sweet, whether he eat little or much: but the abundance of the rich will not suffer him to sleep.
The beauty of this verse is that you don’t have to be religious or even spiritually minded to appreciate its wisdom. You see, when all your money is tied up in volatile investment markets, it’s difficult to get any peace. While I’d never take such outlandish risks, I did have a sizable profit in Bitcoin.
But as the price kept ticking higher and higher, the pressure got to me. Knowing how wild Bitcoin trading is, I could hold on for dear life and risk losing everything or I could get out while the going was good and take something, anything out of this experience.
I chose the latter.
Stupid? Perhaps. But unlike any other investment class, Bitcoin was (and still is) emotional and spiritual torture. It’s not just the volatility you must worry about. Indeed, there are so many other pitfalls, from government intervention to exchange hacks to strongarm robbery to simply losing your password.
This isn’t just about paper profits. No, this was Schrödinger’s cat on crack. In one paradigm, you could be a multi-billionaire. But in another, you could be a homeless person. All it takes is that one event to ruin everything.
Unfortunately, there’s no way to predict such anomalous events. Thus, I was always looking over my back because a negative catalyst could be lurking anywhere. At least with something like GME, you’re basically trading against a hedge fund.
With Bitcoin, I don’t know what I’m dealing with. Honestly, market volatility was the least of my concerns. Instead, I worried about China, Russia, North Korea, FEMA camps, even an EMP strike that would wipe out the grid (and presumably the blockchain).
I just didn’t want to deal with it anymore. So I sold.
Not the Best Decision But I’m Happy
Technically, when I exited, I left money on the table. Certainly, it’s regrettable. But at the same time, I regret nothing. I’m (mostly) debt-free today. I do have car payments, but they represent well less than 10% of my monthly earnings.
But perhaps the most important takeaway from all this is that I can finally get some sleep. I’m still a big believer in cryptocurrencies and so I maintain a modest position. Personally, I anticipate that Bitcoin will soon take out $50,000. From there, $60,000, possibly even $100,000 is not out of the question.
However, what you must realize is that $5,000 is not out of the realm of possibility either. Like any market, Bitcoin is a cruel one. You might say it’s the cruelest.
Call me weak but I couldn’t handle it any longer. But I’m going to walk away on my terms with a lifechanging reward. It’s not the biggest reward, I can tell you that. However, not having to worry about the North Koreans is a huge relief.
Thank you, Elon.
On the date of publication, Josh Enomoto held a long position in BTC, DOGE and GME.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.