Borong Bitcoin Episode 1 - Juni 2023

Key Concepts

Bitcoin, Cryptocurrency, ETF (Exchange Traded Fund), Halving, Dollar Cost Averaging (DCA), Lumpsum Investing, Trading, Self-Custody, Exchange, Risk Management, Long-Term Investment, Market Cap, Traditional Finance, Institutional Investment.

Borong Bitcoin Series: Buying Bitcoin at $30,000

Introduction

The speaker addresses the question of when to buy Bitcoin, now that it has reached $30,000. He introduces a new series called "Borong Bitcoin" (Buying Bitcoin), where he will document his own Bitcoin purchases monthly to demonstrate a practical approach to investing. He emphasizes "walk the talk" and sharing his actions, not just giving advice. He mentions previously sharing his Bitcoin purchases around $18,000 in January on his Instagram highlights.

Current Market Conditions and Institutional Interest

The speaker attributes the recent surge to $30,000 to positive news being "priced in" to the market. He highlights the growing acceptance of Bitcoin by traditional finance institutions.

BlackRock ETF Application: BlackRock, with $10 trillion in assets under management, has applied for a Bitcoin ETF.
Hong Kong ETF Approval: Hong Kong, through HSBC, has approved Bitcoin and Ethereum ETFs, signaling a "soft opening" for China.
Other Asset Managers: Fidelity, Charles Schwab, and Deutsche Bank are also showing interest.
Global Trend: The speaker believes that global banks will eventually embrace cryptocurrency, with ETF approvals expected in 8-10 months, coinciding with the Bitcoin halving.
ETF Explanation: An ETF (Exchange Traded Fund) is explained as similar to buying Reksa Dana (Indonesian mutual fund) but traded on the stock market.
Mainstream Adoption: The speaker believes crypto is becoming mainstream faster than anticipated.
$1 Million per Bitcoin Prediction: He reiterates his long-held belief that Bitcoin will reach $1 million per coin.
Market Cap Growth: He notes the Bitcoin market cap has grown from $300 million when he started his academy to $600 billion, and expects it to surpass $1 trillion after the halving.

Personal Investment Strategy and Transparency

The speaker reiterates that he is sharing his personal investment journey, not advising others. He reveals that he started investing in Bitcoin around $18,000 in January, with an average portfolio cost of $24,000 due to continuous buying. He aims to provide more transparency by creating a new account from scratch and documenting its progress.

Bitcoin's Performance vs. Other Assets

Bitcoin's year-to-date returns have significantly outperformed other asset classes, including stock indices and bonds. The speaker believes Bitcoin is currently the best-performing asset globally, surpassing gold and the S&P 500.

Practical Approach: "Keep It Simple Stupid" (KISS)

The speaker advocates for a simple and consistent investment strategy. He aims to demonstrate that making money in crypto is not difficult with the right approach. He acknowledges that the portfolio will experience losses in some months, as is normal with any asset, but he will share his thought process and conviction during those times.

Investment Methodology: Borong Bitcoin (Buying Bitcoin)

The "Borong Bitcoin" method involves buying Bitcoin when the speaker deems the time is right, potentially multiple times a month or every few months. He will share updates on the portfolio each time he adds to it.

Dollar Cost Averaging (DCA) vs. Lumpsum Investing

The speaker clarifies the difference between DCA and lumpsum investing, correcting a common misconception.

DCA Definition: DCA involves dividing a fixed sum of money and investing it at regular intervals (e.g., investing $10,000 in $1,000 increments over 10 months).
Lumpsum Definition: Lumpsum investing involves investing a sum of money all at once.
Example: Investing 500,000 IDR from a 5,000,000 IDR salary each month is considered lumpsum investing, not DCA.
Vanguard Research: He cites Vanguard research (link provided) showing that lumpsum investing is generally more effective than DCA, especially in Bitcoin.
Dynamic DCA: He briefly mentions Dynamic Dollar Cost Averaging as a more advanced strategy.

Trading vs. Long-Term Investing

The speaker discourages viewers from trying to actively trade Bitcoin, acknowledging that while some individuals can be successful, most people lack the time and expertise.

Trading Risks: He warns against derivative trading (futures, options) and leverage, which can lead to significant losses.
Focus on Energy (Money): He emphasizes focusing one's energy (money) on Bitcoin as a long-term investment.
Missing Best Days: He cites statistics showing that missing just 13 of Bitcoin's best trading days can significantly reduce returns.
Portfolio Allocation: He suggests splitting a portfolio 50/50, with one half dedicated to his "Borong Bitcoin" strategy and the other half used for personal trading strategies, to compare performance.

Exchange Selection and Self-Custody

The speaker emphasizes the importance of self-custody ("Not Your Keys, Not Your Coins") and warns against relying solely on exchanges.

No Endorsements: He states that he does not accept endorsements, especially for financial assets, to avoid conflicts of interest.
Indodax Exchange: He reveals that he will be using Indodax for the "Borong Bitcoin" series, but clarifies that he is not being paid to promote it and is not recommending it to viewers.
Reason for Indodax: He explains that he is using Indodax because it is an empty account, while his other exchange accounts already contain his existing portfolio.
Self-Custody Recommendation: He strongly advises viewers to transfer their Bitcoin to a personal wallet after purchasing it on an exchange.

Initial Purchase and Portfolio Transparency

The speaker demonstrates the purchase of Bitcoin on Indodax, buying 0.2 BTC with 100 million IDR. He announces that he will share the portfolio's progress on Twitter, Instagram, and TikTok, using the hashtag #BorongBitcoin.

Bitcoin's Potential and Long-Term Vision

The speaker reiterates his belief in Bitcoin's long-term potential, citing the potential influx of $25 trillion from BlackRock, Fidelity, and HSBC. He emphasizes that Bitcoin's market cap is still small compared to other asset classes.

Think Different

He quotes Steve Jobs' "Think Different" campaign, encouraging viewers to embrace new paradigms and avoid being left behind.

Is Bitcoin Too Expensive at $30,000?

The speaker answers the question of whether Bitcoin is too expensive at $30,000 by stating that he just bought it, indicating that he believes it is still undervalued. He plans to continue buying Bitcoin, even if the price drops, and will hold it for the long term (10, 20, 30, 40, 50 years).

Final Disclaimer and Call to Action

The speaker reiterates that he is not responsible for viewers' investment decisions and emphasizes the importance of self-custody. He encourages viewers to research Bitcoin thoroughly before investing and to only invest in assets they understand.

Conclusion

The speaker concludes by stating that the video is simple and that he will continue to provide updates. He encourages viewers to learn about public keys, private keys, cryptography, hashing, and SHA256 before investing in Bitcoin.