'When my paycheck lands, it takes a detour through bitcoin'
"I started buying when bitcoin was at $104,000 and kept buying all the way down into the $58,000s." (Photo subject is a model.)
Dear Quentin,
I read the Moneyist letter from a 50-something bitcoin fan ("My retirement is completely in bitcoin: Why don't more people do what I do?"). She's not alone. I'm a 47-year-old woman holding 2.5 bitcoin, and I'm never selling. I buy more every payday, rain or shine. When my paycheck lands, it takes a detour through bitcoin before a single bill gets paid - my own little laundromat. The money comes out cleaner on the other side.
I just had to buy a car, which stung, but every other spare dollar goes toward stacking. I'm counting on bitcoin to let me retire in the next couple of years. People in my life think I'm crazy. Maybe I am. I started buying when bitcoin was at $104,000 and kept buying all the way down into the $58,000s. I've ridden out the crashes, bought the dips, and every time I've been rewarded for holding on.
To the 50-something bitcoin fan, if you're reading this: Keep going. We're going to make it.
Connecticut Stacker
You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com. The Moneyist regrets he cannot reply to questions individually.
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There are no guarantees. You know it (I hope). I know it. And the readers know it. But you've taken a leap of faith.
Dear Stacker,
What you're doing might or might not be crazy, but you're not crazy. You are besotted.
You have fallen head over heels for bitcoin (BTCUSD). You are a believer. If you had bought at $20 or even $20,000, you would have a greater margin of safety, giving you more comfort for your hold or "hodl" position. Instead, you are buying when bitcoin is priced between $58,000 and $104,000. You're banking on the limited supply fueling an upward trajectory in the digital currency.
It's hovering at around $84,000. There are no guarantees. You know it (I hope). I know it. And the readers know it. But you've taken a leap of faith. I'm not going to try to convince you to put your money into other stocks - diversify your holdings and spread your risk - because you know the rules, and you know the risks you're taking. It's your money to spend as you like.
You're making a laundromat joke that your money is cleaner as bitcoin. I don't think you meant to evoke a money-laundering joke, although bitcoin has reportedly been used for just that by bad actors (along with many other assets). You are saying your paycheck goes into bitcoin first, rather than being spent on unnecessary purchases, but will acquiesce when you need a new car.
If you look for a bystander to trash talk your beloved, you will surely find one.
It's very difficult to persuade a person whose fallen in love with a charismatic personality that has made big promises - a character who may let them down or come good in the end - that they might be in a toxic relationship or, at the very least, neglecting other parts of their lives to keep the relationship going. You'll never get through to them until they're ready.
If you look for a bystander to trash talk your beloved, you will surely find one. If you want to find an observer singing from the same hymn sheet, sooner or later you will hit pay dirt. As MarketWatch recently reported, Ned Davis Research sees bitcoin hitting $170,000 by 2030 and maybe as high as $230,000 by 2035. That's a big ask, depending on whom you ask.
Chief alternatives strategist John LaForge outlines seven approaches to valuing the cryptocurrency - namely network adoption (how widely bitcoin is owned and used), comparisons with other assets such as gold, money-supply growth, the cost of producing bitcoin, portfolio risk, the cryptocurrency's adoption cycle, and the stock-to-flow model.
LaForge suggests looking at factors like how many people own bitcoin, including through ETFs; how many bitcoin addresses hold a balance; and how many addresses are actively transacting each day. The basic logic underpinning his thinking is that the more people who own and use bitcoin, the greater the adoption of its network, which can provide a base for assessing its value.
Don't miss: 'We lived within our means': I earned $30,000 as a pastor and still retired comfortably. Why don't you tell people that?
A chorus of analysts
There is also an increasingly heretical chorus of analysts who don't believe all that glitters is bitcoin. Galaxy Digital evaluated the four-year cycle and placed a base-case floor target price of between $40,000 and $46,000 for late 2026. Citigroup also has a bear outlook that could see bitcoin falling to $53,000 per coin over the next year.
"During bitcoin's 17-year existence, the price has moved in long waves," Galaxy Digital says. "Roughly every four years, it climbed to a euphoric high, fell through a painful decline to a low, and then began to recover. This rhythm has historically been anchored around the quadrennial halving, the event that cuts regular supply issuance by half."
"Despite the declining impact of successive halvings, and many prognostications of a 'supercycle,' the empirical data yet again shows evidence that the four-year bitcoin halving cycle is intact ... A shallower outcome, where steady buying from staking participants and long-term holders absorbs the decline near the cost basis is around $51,000 to $54,000."
There's no consensus on bitcoin and estimates vary dramatically.
In a widely circulated and extensive interview last month with the crypto-media site Cointelegraph, market analyst Alessio Rastani estimates that bitcoin could reach $1 million, but that may happen over the next few decades rather than years. "Before we get to a million, we need to see bitcoin dropping to at least $20,000 ... and $10,000 probably."
What does all this mean? There's no consensus on bitcoin, and estimates vary dramatically, depending on who you talk to. Analysts try to factor in government policy, the economic backdrop and historical price changes in bitcoin in addition to market cycles dating back 100 years. In other words, they throw in everything but the kitchen sink into their calculations.
As I told that 50-something bitcoin aficionado, investing 100% of your retirement money into bitcoin leaves you concentrated in highly volatile assets. While that reader is fully committed to taking such a big swing, bitcoin's limited supply does not necessarily guarantee higher prices and borrowing to buy bitcoin can lead to forced liquidation during sharp declines.
It bears repeating: Know your liquidation thresholds, grace periods and other loan terms, particularly during a "crypto cascade," when an initial price drop can trigger automated liquidations and accelerate a selloff. Keep an emergency fund outside your crypto holdings, so you're not forced to sell during a downturn, and have enough money for car repairs.
I sincerely hope this is a love affair to remember for all the right, rather than wrong, reasons.
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More columns from Quentin Fottrell:
'She says it's just money': My friend pays for everything. I should be grateful, but I can't stand her anymore.
My husband and I are in our 50s and have no kids. We have $2 million in IRAs and 401(k)s. Do we really need a will?
'I don't begrudge them their money': My husband and I have friends who spend, spend, spend. How do we keep up?
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-Quentin Fottrell
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