TIME PAIN – When “buy the dip“ is offset with “sell the rip“

Time pain when buy the dip is offset by sell the rip. Okay. What is time pain? Time pain is in a bare market for any assets could be stocks, commodities, could be you know coin, soybean, soybeans, gold, silver, oil, uh could be stocks, bonds, whatever. Anytime you have a bare market, which means pessimistic sentiment, meaning uh the bears are the dominant mood, meaning people that think an asset is going to go sideways or down as opposed to up. Then you have this behavior which is all the people who own that asset that have low conviction in that asset need to be shaken out of the asset in order for it to go back up. Now, why is it this way? It just is. Uh I don't know all of the reasons humans behave the way they do. But humans have very predictable behavior patterns and that is they tend to buy things when they're going up and they tend to sell them when they're going down. And if you give them enough time, they will sell things when they're going sideways. Because as Jack Morer says, uh, don't let the market scare you out or wear you out. The market scares you out when the price is dropping quickly. The fear factor kicks in. The market wears you out over time when the price of something is grinding sideways or slowly down and you just you can't take it anymore. Day after day, week after week, month after month, sometimes goes by and the asset you are invested in feels like it's going nowhere. Now this is not unique to Bitcoin. Every asset, every one of the magnificent seven stocks, the seven highest performing stocks in recent decades on the US stock market and those seven stocks have essentially created all of the stock market gains in the last couple of decades in the stock market. So the magnificent seven stocks which are Apple, Amazon, Google, Microsoft, um Facebook, Nvidia, and Tesla. I think that's all seven. You can Google it. Anyway, uh those stocks have generated all of the stock market returns in the S&P 500, which means the bottom, you know, 493 companies basically went nowhere. Okay. Every one of those stocks and every commodity, oil, corn, you know, soybeans, wheat, uh precious metals, gold, silver, every one of them goes through bare markets. And initially, a lot of people get shaken out as the price is plunging quickly, which happens to every asset from time to time. and those that are not shaken out on the rapid plunges typically are worn out by the grind sideways that follows. Now, in the case of Bitcoin, I think a lot of the, you know, time pain is behind us. Uh, a lot of people bailed out in 2025 when it didn't go up as fast as they had hoped or they bailed out quickly on the way down. So, I think a lot of that time pain is behind us, but not all of it. James Czech says we probably have some number of months ahead of time pain. Okay. So what does time pain look like in the moment? What it looks like is you have a variety of people who bought Bitcoin on the way up. They don't know what they own. They are tourists. They don't have any idea how markets work. They don't have any idea how Bitcoin works and they're trying to get out. So certain a certain number of the people who currently own Bitcoin are underwater on their on their investment and they want to get out. So when the price starts to rise, even though when the price starts to dip, you get a lot of buy the dip behavior, which are high conviction Bitcoin holders that want more and so they buy it when the price is going down. When it starts to go up as a result of buy the dip behavior, you get the sell the RIP behavior. The sell the rip behavior are people who are underwater on their Bitcoin and they're just desperately hoping that they'll get less underwater or if they bought it at, you know, 70,000, 72,000, 85,000, whatever, that they'll get just above break even and then they can get out again. These are tourists. These are people that don't know what they own. They're not sophisticated investors. They don't know what they're doing. And Bitcoin, like every other asset, is in a constant quest to move from weak hands to strong hands. Weak hands are people who loosely hold an asset. They don't they're not sure why. They're not sophisticated. Strong hands are people who are gripping the asset. They know what they own. They own they know why they own it. They know they want to own more of that asset. And strong hands don't get shaken out in a bare market. Weak hands do get shaken out in a bare market. So James Czech assumes based on the history of every other asset in markets that have you know existed since the beginning of time that we probably have tourists still on the bus or on the train or on the boat or whatever you want to say. And so when when the price starts to rally when it goes from let's say 655 up to 69 which happened earlier this week or over the last week or so then you get people who are like oh man I was so underwater at 65. If I can just get 68 or 69 for my Bitcoin, I am out of this thing. I cannot hold down my my breakfast. The anxiety, the stress is too much. I can't take it anymore. So, as the price starts to rise 67, 68, 69, it gets sold sold sold by the weak hands. Now, who is buying? Well, the strong hands because the people who are accumulating are the people who have high conviction. Nobody with low conviction is buying Bitcoin in the 60,000s. Why would they? Low conviction people buy things on the way up and they sell them on the way down. Uh high conviction people buy things all the time and certainly they do not sell them on the way down. They if they can acquire more or if they're 100% Bitcoin like me, you just don't sell. Um but that is the behavior of high conviction individuals. Okay. So when does this end? Well, it ends when the number of people willing to sell the RIP is overwhelmed by the number of people willing to buy the dip. And because in the background, the accumulation of Bitcoin is constantly growing. Eventually, always essentially, think of it like the tides and the waves, right? When the tide comes in, it's slow, but it's only one way. Eventually, the tide goes out, but for our analogy, uh, for for technological adoption is basically a one-way tide. the tide only goes in. It's not like TV suddenly fell out of favor or nobody has a cell phone anymore. So technological adoption whether it's the, you know, running water or the flushing toilet or whatever. Uh adoption happens one way and it's like the tide coming in. It's slow within that you have waves. Sometimes they're big waves. Sometimes you get about every four years in the case of Bitcoin, you get sort of a tidal wave that makes it look like all of the adoption is happening at one time when the truth is no, that's just a wave and that it's going to wash out. So the real the only way we really really really know what the underlying ad uh adoption rate of Bitcoin's strong hands is is in the rearview mirror. In the rearview mirror, we can look at the lowest price Bitcoin ever got in a given price cycle because at that point we know there were no weak hands left because if there were any weak hands left the price would have gone lower. Okay. So, uh, the first major price correction back in 2011, after 2011, the price dropped from $32 to $2. It was a 94% price drop. So, we know that the strong hands held the price at $2. Okay? And even after a 94% price drop, the reason it was not a 95% 96 97 98 99 or 100% price drop is because that last 6% of the price uh first of all, most of that 94% of the the price that that ran up was mostly tourists driving the price up and obviously they bailed on the way down. So most of that uh the runup from 5 cents to $32 was artificial demand that did not have staying power. And we know how much was staying power because when the price correction came it stopped at $2. Okay. Then the price ran up to $1,200. And when it came back down rather than stopping all the way to $2, it stopped at $92. So why in just two years between the the dip after 2011 and the dip after 13? Why was the floor the price floor moved from $2 to $92? Well, because 46 times as many people had adopted Bitcoin in rough terms. It's not an exact mathematical uh equation, but it's close. Um, so when 46 times as many people buy Bitcoin, then the price is not going to go to $2. It's going to go to $92. Then there was a huge price run up and then the price went down to $3,200. Well, $3,200 is radically higher than $92. So why $3,200 and not 92? Well, because there was a ton, whatever 40 times as many people, I don't know what that math is, but whatever 3,200 divided by 92 is, there was that many more people that had adopted Bitcoin between the 2013 bull run and the 2017 bull run. So, the price correction that happened in this case after 2011 uh was in 2012 and the next one was in 2014. So, uh in 2017, the price uh went way up. I guess it was 2017 that the price came down to 3200. And then the next time the price went way up in 2021, it came back down to 15,500. Well, why 15,500 and not 3,200 like before? Because again, something like five times as many people had bought Bitcoin and were that Bitcoin was in strong hands. So the same thing is happening now. The last low point in 2022 was 15,500. So rough dumbbells, you quadruple that, you get about $60,000. Now, does that mean we can't go below $60,000? No, it doesn't mean we can't. Uh, in fact, many people thought we would never go below 80,000 or h 100,000. Nobody knows. Nobody knows this stuff. Not Michael Sailor. Michael Sailor has bought tens of billions of dollars, not tens of millions. Tens of billions of dollars at a price higher than today's price. Obviously, if he thought the price was going to drop like it did right now, he would have bought it now instead of then. And he'd bought more Bitcoin than anyone else in the world. Period. Not even close. Same with everybody else, including me. I've bought Bitcoin at 122,000, 124,000. I've bought Bitcoin at all the prices. Um, obviously I've accumulated more Bitcoin at cheap prices than more expensive prices because you buy more when it's cheaper, but you don't know in advance what cheap is and what expensive is. There's no way to know that. So, all you can do is buy Bitcoin and hold on to it for as long as conceivably possible. But again, when you look at just the low points after market rallies, you get $2 Then two years later, $92. Then four years later, $3,200. Then four years later, $15,500. Then four years later, $60,000. And again, maybe that's not the low. Maybe the low will be $58,000. But if if there is a low below 60, it's probably not much. And James Czech says there is a 60% chance that 60,000 was the low. So he only gives the odds 40% that we see a price lower than 60,000 ever again. Uh and that's James Czech who again can't predict the future but he is the best analyst uh there is. Okay. So when you calculate all of that where that leaves us is we are probably close to the bottom. Uh maybe today's price is the lowest it'll ever be. We don't know. Nobody knows. But regardless we are close to the bottom of this price cycle. Could go lower. 40% chance it goes below 60. Um, if it does, it probably doesn't go much below because even me, I've got, you know, $50,000 of Bitcoin backed loan capital sitting there that I can use. And if the price starts dropping significantly be below here, certainly if it drops below 60, I'm going to deploy that Bitcoin backed loan capital. Now, I don't want to because it's borrowed money and I don't like borrowed money. I don't like deploying borrowed money. Uh, and normally I don't deploy borrowed money, but if the price gets cheap enough, I will. So, there's people like me sitting here with, you know, $50,000 in Bitcoin backed loan capital that I could deploy. It's not my money. It's borrowed money using Bitcoin as collateral, but I'm not going to deploy that at today's prices because it's borrowed money. Uh, now, if it was a if it was from a uh a 401k, if I was borrowing against a 401k, I would deploy it today. If I had leftover money from a home equity line of credit, which I don't, but if I did, I would deploy that capital today at today's prices. But for a Bitcoin backed loan, that's a lot riskier capital because your c your collateral can get liquidated in a price drop. So if you're borrowing against stocks or if you're borrowing against Bitcoin, it is a lot riskier to do it and you do have to be a lot more price sensitive. But again, that's only because my collateral is Bitcoin and not a house or a 401k or something like that. So anyway, lots of people will step in if the price materially goes down. Um, you know, certainly below 65,000. I think you just get a lot of people stepping in that uh have previously not stepped in and um you know it creates a floor but again you have to look at it and say the floors were $2,92 thou you know $29 $92 $3,200 $15,500 and so far $60,000 and each time you hit a floor nobody knows what the floors are in advance. There's no mathematical way to figure them out. Everybody wishes there was but there's not. And so all you can do is again buy as much Bitcoin as you can and hold on to it for as long as conceivably possible. And eventually the buyers outnumber the sellers because only 5% of the world owns Bitcoin and the vast majority of the people who own Bitcoin only own a very small amount. So even if the 5% loaded up on Bitcoin just like I have at 100% of my assets, the price would be radically higher, even if only 5% of the world's population ever bought Bitcoin because most of that 5% owns 50 bucks or 200 bucks or some comparatively small amount. So eventually in any bare market for any asset that has any value and Bitcoin has a value because of its monetary properties and all the things we've talked about and I've posted on recently and in numerous other videos and posts because of Bitcoin's value. The adoption always will eventually outrun the people who are selling the RIP. And eventually the sell the RIP crowd is sad that they sold the RIP because they thought they were smart because the price rebounded from 65,000 to 69,000. They sold it at 69 and then it dipped again as more people were selling the rip and they smelt felt smart because the price is 67 and they sold it at 69. Well, one day it'll be $500,000 and they'll feel like an idiot. And that's what happens in all markets. Everybody that is buying assets, uh, for example, for 5,000 years, every dip in the price of gold, people have uh, you know, sold the rip on the way back up trying to get out. Well, you know, historically, they've been on the wrong side of that trade. Even though gold over time massively underperforms Bitcoin, historically it has outperformed some other many other assets. Um so Bitcoin is a much better asset than gold. But again all the people who sold the RIP in the past are looking at the price of gold today and wishing they had not sold the rip. And the same is always true of Bitcoin. So it's just a matter of time. We got to shake out the we hands weak hands. Uh it's a grind. We probably have some number of months ahead of sideways or even slightly down price action. It's going to be brutal. If you have capital to deploy to buy Bitcoin, I would deploy it now. If it's borrowed capital, that's tougher, but hopefully you capital you have to deploy is not borrowed. And uh at today's prices, it's a fantastic buy. I think so. And that's not it was Look, Bitcoin was a fantastic buy at 126 and it's a fantastic buy at 67. And in the rearview mirror, nobody cares if I bought Bitcoin at 12,200 back in 2018 or if I bought it at 6,700 back in 2018. At the when you look at it in the rearview mirror, you know, it all comes out in the wash. You're way up on your investment. You just wish you had bought more Bitcoin at all prices, not just the cheap prices. I wish I had bought more Bitcoin in 2017 and 2018. At the most expensive prices I bought it back then, even at those prices, I wish I had bought more Bitcoin because it would have been way up today. And the same will be true of all the prices today. So same advice as always. Adoption always eventually outruns the sell the rip behavior. We eventually always shake out the weak hands. We eventually always transfer the Bitcoin from the weak hands to the strong hands. Adoption always eventually overwhelms the sellers and the price goes up and sets new all-time highs. And it's been doing that for 17 years and it'll do that again. Bitcoin is doing what it always does and it's very good at it. And uh anyway, so um and somebody's asking, "How do I buy Bitcoin?" River riv.com. I recommend River.com for buying Bitcoin. It is the best Bitcoin only platform. It's easy. It's straightforward. You can link your bank account. Uh River, Riv, those five letters. River.com uh is what I recommend. So yeah, if you have any questions, let me know. Always here to serve. Just message me on Facebook Messenger is always the easiest way to reach me. Thanks everyone.