A few points to consider when investing in BTC with a value investment approach:
1. Have you truly understood BTC?
Don't invest if you don't understand.
Before investing, it is essential to understand the scarcity and uniqueness of Bitcoin from the perspectives of Austrian economics, monetary competition, and the laws of fiat currency issuance, as well as its unique qualities as a store of value. Fully trust Bitcoin and maintain 100% confidence for long-term holding. At the same time, one must also understand the security and robustness of Bitcoin from the perspectives of cryptography and blockchain technology, and comprehend the relationship between Bitcoin's security and quantum computing, while managing inner fears and fluctuating emotions.
Many failures in investing in altcoins stem from a lack of understanding of them, but people invest for the illusory potential returns, ultimately losing control over the rhythm of entry and exit, or failing to assess real value, leading to operational failures and losses.
2. Do not use leverage.
Whether one adheres to the principle of not using leverage or borrowing to invest is key to measuring an investor's maturity.
However, I must remind you that Charlie Munger and Warren Buffett have also used leverage. When they used leverage, they had three core considerations: one is that the loan period is particularly long, with low repayment pressure, such as a 10-year loan in yen at a super low interest rate; the second is that the total amount of the loan is very low compared to their own assets, meaning there's not much psychological pressure, knowing they can repay with other assets in case of investment failure; the third is that the investment goal has a very wide safety margin. For example, in the case of Bitcoin, my personal assessment of its current fair value is at least $100,000, and when it drops to $60,000, I would consider it seriously oversold, with a safety margin of $40,000 in price. At this point, considering long-term borrowing for investing in Bitcoin is feasible. All three of the above are essential.
3. Do not short.
Bearish, but not short.
The reasons for being bearish stem from understanding the current style of international capital, the cyclical patterns of capital entering and exiting Bitcoin, the comparative strength of different investment styles, the impact of altcoins on market trends, and the high likelihood of failures of many irrational leveraged institutions during the 2023-2025 bull market. It also involves understanding the inertia of crowd behavior in panic selling.
The reason for not shorting is that this is Bitcoin, a target that increased 50 million times in 2017, historically one of the most frightening subjects for shorting, with unexpected reversal scenarios that could lead to short positions being liquidated at any time. Even with 1x leverage, it may be liquidated under abnormal operations of unscrupulous exchanges, and the difficulty of protecting rights is extremely high.
4. Buying model: DCA at the psychological expectation bottom.
Clearly, the expected bottom is around $60,000 to $70,000, with $69,000 overlapping the 2021 high, and $58,000 being a critical support level in mid-2024, also about 80% of the extreme position for mining shutdown prices.
Strict discipline must be followed at the bottom, buying in batches and at different times.
This is my personal judgment; different people should have their own understanding and design.
5. Live a good life.
If life isn't going well, then value investing is in vain, right?
From Graham to Buffett and Munger, to many value investing enthusiasts, those who engage in value investing often live more easily, longer, and healthier than those who pursue technical investing.
Value investing is the least energy-intensive, most effective, and most rational investment method, freeing up time and energy to allocate costs elsewhere. Don’t chase quick gains; let time be your tool.
6. Responses to unexpected situations
The first unexpected situation: the price did not drop to expectations, and there was a significant rebound. Focus on macro conditions and changes in market confidence. In the long term, I believe the market cap of Bitcoin can easily reach that of gold, as long as most people can see through the exploitative nature of fiat currency. Surpassing gold's market cap is not a problem. Therefore, although I see a bear market in 2026, I am looking at a long bull market in the long term. If 2026 turns from bear to bull due to interest rate cuts, QE, or changes in collective perception, there is no need to panic. Timely adjustments will suffice.
The second unexpected situation: there are severe fluctuations that shake out positions. Do not pay attention; buy on dips and continue to build positions steadily and slowly. Do not go long or short contracts. Only buy spot and accumulate in the long term. Avoid being liquidated. I believe a price of $200,000 could be reached in the mid-term stages of 2027-2028. As for the speed at which $500,000 arrives, it depends on the changes in perception between the government and the people. The rhythm of this ebb and flow is currently in favor of the former, while the latter is lagging in entry speed, which is unfavorable for Bitcoin's development. The 2025 bull market not achieving the expected range of $150,000-$220,000 is also due to the latter's delayed recognition and follow-up causing power imbalance (this is also an important point in judging a bear market; if the people do not participate or follow up, there will be no buying pressure and support will be weak).
The third unexpected situation is a drop below $58,000 with consolidation at lower levels.
For instance, when it approaches $50,000 and sometimes fluctuates, it creates fear and concerns about whether it will go to zero.
It's simple. In this situation, directly overcome fear, patiently clarify the fundamentals, especially from the perspectives of economics, cryptography, and computer technology, then buy heavily as prices drop.
This is an excellent opportunity to change one's fate.
