My Ten-Year Personal Summary on BTCMy Ten-Year Personal Summary on BTC
Since first encountering BTC in July 2013, a decade has passed. What exactly have I gained over these ten years? You might think that having known about BTC so early, I must have achieved financial freedom. Unfortunately, that’s not the case. From initially getting into BTC in 2013, mining in 2014, to experiencing my first bear market in 2015 and selling all my coins in despair, to watching the bull market rise with an empty portfolio in 2017, and later in the bull market of 2020 losing my last 1 BTC due to leveraged gambling during a market correction, and up to now in 2023, struggling to accumulate coins before the halving, I have paid a heavy price in “tuition fees” over the past ten years. Although I did not achieve financial freedom, I believe that the “tuition fees” I paid over the decade were not in vain. Below is my summary, which I would like to share with everyone.
It's well known that BTC undergoes a halving roughly every four years. Many believe this is an emulation of real-world gold mining, aiming to create a deflationary currency. I partly agree with this view, but a notable difference is that the reduction in the mining of precious minerals is continuous, whereas BTC halving is sudden every four years - it's not linear, but step-like. What does this lead to? I'll get to that later. Let me first talk about the pattern I've observed: in the three cycles for which we have data, the peaks of the bull markets occurred 14 months (December 2013), 18 months (December 2017), and 18 months (November 2021) after each halving. The 2013 cycle is somewhat dated, so the 2017 and 2021 cycles are more persuasive, as they occurred when BTC entered the mainstream. We can tentatively conclude that, about a year and a half after a halving, there is a high probability that the bull market will reach its peak. The next question is, when is the bottom? Relative to the peaks of these three cycles, the bottoms occurred 14 months later (January 2015), 13 months later (January 2019), and 13 months later (December 2022), respectively. This is remarkably cyclical. Another point worth noting is that all six instances, whether bull market peaks or bear market bottoms, occurred at the end or beginning of a year, showing a high degree of regularity.
This strong regularity inevitably makes one want to capitalize on it; at least if you operated based on the data from 2017 in the just-passed 2021 cycle, you would have made a fortune, wouldn't you? But someone will inevitably criticize me, saying: “Using historical events to predict future events is extremely foolish, you shouldn’t do this at all! Anything can happen, and cycles can change!” I can’t deny this, but we still need a summary of experience, don’t we? Moreover, I will address the issue I mentioned at the beginning, that “BTC’s halving is step-like, not gradual.” This is precisely what leads me to be willing to trust historical data. Ask yourself, whether it be stocks, gold, or foreign exchange, does any investment have the characteristic of halving suddenly every four years like BTC? No. Can BTC’s halving characteristic be altered? No! It was written into the core of BTC by Satoshi Nakamoto and will continue until 2140. It is this “sudden halving” that gives rise to BTC’s four-year cyclical fluctuations. If the halving were linear and continuous, BTC wouldn’t have such strong volatility! The patterns we just summarized are not coincidences, but the inevitable results of the halving mechanism. Therefore, I have every reason to believe that in the years to come, we will still see this cyclicity because the halving mechanism is always there. Even if things may be different, and the timing may vary, the nature will not change.
Based on this, we should make good use of the halving cycle, which is the greatest gift that Satoshi Nakamoto has given to long-term investors. As for myself, I built positions between November 2022 and February 2023, and my basis was the pattern we just summarized, and I was right. So, the next operation is to find the next peak. The next halving is currently estimated to be around April 2024. By extrapolation, the approximate selling point would be around November 2025. There will definitely be some deviation in timing, but you will need to combine this with market sentiment and the actual price of BTC at that time.
Speaking of price, what should the peak be in November 2025? According to the famous Bitcoin Rainbow Chart (updated V2), the “Maximum Bubble Territory” for November 2025 is between 310-400K, “Sell. Seriously, SELL!” is between 240K-310K, “FOMO intensifies” is between 180-240K, and “Is this a bubble?” is between 140K-180K. The twin peaks of the bull market in 2020 and 2021 did not touch the “Maximum Bubble Territory”; 2021 only touched the bottom of “Sell. Seriously, SELL!”. Therefore, regarding the price high, I don't think even the new V2 version of the Bitcoin Rainbow Chart has much reference value, as the market's upper limit is finite and can’t simply be an exponential addition. Thus, I drew my own sell line that truly connects the peaks of these three cycles. I think the price in November 2025 should be between 160K and 180K, and that will be my selling price. Afterwards, according to my buy line for the bottom, I will rebuild positions in BTC in January 2027, at an approximate price of 60K, completing one cycle. Then, I will continue with the next cycle.
If everything goes smoothly, the returns will be very impressive. For example, if you currently own 1 BTC, selling it in November 2025 could yield 160K, and subsequently in January 2027, you would be able to buy about 2.5 BTC. By selling in November 2029, you would make 2.5*300K=750K. In December 2030, buying at a price of 150K would net you 5 BTC, and selling in 2033 at a price of 400K would leave you with 2M. I will operate this way for the next decade starting now.
You might say I'm an idiot for expecting such an idealized outcome. You are right, life is tough, and not everything goes as you wish. But based on the lessons learned from my decade of experience, I believe this is the plan most worth putting into practice, and it has many advantages. Let me explain them one by one.
Firstly, you only need to make two transactions every four years. Compared to the elusive short-term trading, the success rate of trading based on the halving cycle is evidently higher. Additionally, you can store your BTC in cold wallets or hardware wallets for most of the time, which significantly reduces the risk of centralized exchanges going down. As the saying goes, the less you do, the fewer mistakes you make. Moreover, low-frequency trading allows you to get back to life, which is extremely important! Why do we want to make money? Because we want to live well; this is the essence. The most important thing is to avoid the “gambling nature”. Imagine there is a “Gambling Bar” above your head; every time you make a short-term trade, whether successful or not, the bar rises a bit until it’s full. Then it makes you lose your mind and start gambling with leverage. How do I know this so clearly? Because in 2020, I lost all my BTC using just 3x leverage. I was very aware that I could use a stop-loss, but my “Gambling Bar” was full, and I lost my rationality. That's why I will make sure to keep myself away from it for the rest of my life. In this market, risk is everything. As a gambler, as long as you are at the table, no matter how much money you make, the end result will be zero.
This concludes my personal ten-year summary of BTC. Whether the experiences I summarized are correct or whether they can be realized doesn't matter. They will be slowly tested by time, and I can focus on working and living better.
I wish everyone who reads this article a wonderful day!
