Price Action Discourages New and Potential Bitcoiners
It took 6 months of regularly mentioning Bitcoin before the Moon Hodler's favorite retired uncle finally asked how he cold buy some. He becomes more ornery with age, but he said he was ready to invest, he said. And the number he gave me was impressive. He was ready to throw thousands of dollars in. Or so he said.
After we finished Thanksgiving dinner, I sat him down and showed him the various applications I use to purchase Bitcoin. I explained the automatic DCA plans I am enrolled in. I showed him how simple it is to make spot purchases on his phone or laptop by connecting his debit card or checking account. I explained some of the reasons why Bitcoin is the best store of value, how it works, and answered any question he had. My uncle had an understanding of it, he said. He messaged me the next day that he had created an account with one of the popular exchanges and was linking his bank account. Let the stacking begin, I thought.
He made an initial purchase of a few hundred dollars to get a feel for how it all worked. And then the price of Bitcoin dropped by several thousands of dollars. I think he was down around 15% in US Dollars after a few weeks. He was reluctant to purchase more, despite my continued efforts to educate him. I would send podcasts to his iPhone. I would send graphs. He said he knew this was a multi-year investment at a minimum, but his reluctance to average down told me otherwise. He just kept pointing out how the price had fallen.
Then last weekend he asked me to show him how much Bitcoin he now had. What did he mean? Of course, the value of his account had dropped along with the price of Bitcoin. He wanted to see where he was at. Now I was confused. He had not brought or sold any Bitcoin since his initial purchase. It was a complete lack of understanding that would make him think the quantity of his Bitcoin would fluctuate with price changes. I explained that he had purchased a finite amount of Bitcoin that will not change unless he buys or sells. I explained the capped supply and halving schedule, again! I even explained that this was the wrong way to be thinking. The value of the US Dollar is depreciating anyway, and will continue to. It is not a reliable standard of measure. The only important metric at the moment is the size of your stack, Uncle. Keep stacking what you can.