Bitcoin is still early

[CordMcNally]

How do you tax loss harvest Bitcoin? If you sell for a loss what do you buy?

Crypto is currently treated as property so you can sell and then buy back in immediately but I expect the IRS to change that soon.

[xraygoggles]

How do you tax loss harvest Bitcoin? If you sell for a loss what do you buy?

Bitcoin, like others said.

Currently, crypto can do the ole double-whammy: Sell BTC for 10k loss for example, eligible for TLH, then immediately buy 10k BTC, no wash sale rule.

[NapoleanDynamite]

I'm still DCA-ing. At this point I have done the sell/buy trade to TLH some of my bitcoins bought at higher prices, although I too think that the IRS will change this going forward and may back date it to January 2021.

My opinion at this point in time on BTC: it could dip to 18-20K but I don't see it going lower than that. Alternatively it could rocket up the rest of this year and be well in to the 100K's. I'm still buying. My tune is unlikely to change until at least 2025 or beyond.

[Huggy]

I'm still DCA-ing. At this point I have done the sell/buy trade to TLH some of my bitcoins bought at higher prices, although I too think that the IRS will change this going forward and may back date it to January 2021.

My opinion at this point in time on BTC: it could dip to 18-20K but I don't see it going lower than that. Alternatively it could rocket up the rest of this year and be well in to the 100K's. I'm still buying. My tune is unlikely to change until at least 2025 or beyond.

I’m genuinely curious how you keep coming up with these predictions? Or are you just pulling numbers out of a hat?

[NapoleanDynamite]

I’m genuinely curious how you keep coming up with these predictions? Or are you just pulling numbers out of a hat?

There is a lot of information available as it relates to what addresses have bought and where there are large levels of support and where there is a lot of leverage (short and long). There is not much long leverage left in the system right now, but also not a lot of support in the 20-39 range. Accounts that have held their bitcoin for >5 years are historically less likely to sell. There are a ton of long term holder addresses that hold BTC at the 18K and under level. However, from 20-35K this isn't the case.

So am I pulling them out of a hat? Maybe. But there is some rationale behind them. Could I be wrong about it all? Of course.

But I like to do "maths and numbers". I get some weird enjoyment out of it. Whether it is going up or down. Short term, nobody truly knows what direction it is going to move. However, I still think it is very likely BTC price goes a lot higher over the next 5-10 years or I wouldn't still be buying. A bunch of Central and South American Countries now agree.

[FIREshrink]

I'm still DCA-ing. At this point I have done the sell/buy trade to TLH some of my bitcoins bought at higher prices, although I too think that the IRS will change this going forward and may back date it to January 2021.

My opinion at this point in time on BTC: it could dip to 18-20K but I don't see it going lower than that. Alternatively it could rocket up the rest of this year and be well in to the 100K's. I'm still buying. My tune is unlikely to change until at least 2025 or beyond.

At 15 cents per kWh, how much does it cost to mine 1 BTC?

[Jaqen Haghar MD]

I’m genuinely curious how you keep coming up with these predictions? Or are you just pulling numbers out of a hat?

It will be between $18k and $100k. I know nothing but largely agree. This gives a pretty big margin of error. I often wonder how dollar cost averaging fits long term for a speculative investment that trades a mostly on technical analysis and trend following. This technique was developed for investing in things that trade mainly on fundamental analysis.

[Jaqen Haghar MD]

At 15 cents per kWh, how much does it cost to mine 1 BTC?

I wonder about this all the time. At 4 cents, an article in Forbes says it was $8,200 in 2020, before the latest halving, so it should be $30,750 under the same conditions at 15 cents, but after the 2021 halving, wouldn’t it be $67,500 worth of electricity burned per Bitcoin? It’s all very confusing....

[Lordosis]

I’m genuinely curious how you keep coming up with these predictions? Or are you just pulling numbers out of a hat?

There are worse places to pull things from

Also when you guys use the term DCA do you actually have a chunk of money sitting on the sidelines that you are putting in at a specific interval or are you just investing as you get new money like with each paycheck?

[NapoleanDynamite]

There are worse places to pull things from

Also when you guys use the term DCA do you actually have a chunk of money sitting on the sidelines that you are putting in at a specific interval or are you just investing as you get new money like with each paycheck?

Currently I have a weekly buy set up that is 20% of my monthly investment $.

[NapoleanDynamite]

At 15 cents per kWh, how much does it cost to mine 1 BTC?

Mining is a very interesting business. They search hard for cheap electricity and can move when necessary. But at this point it is mostly very large companies doing the majority of mining because it is so competitive. I have looked at it and ROI over most 3 years periods from investing in the correct miner setup has historically ranged from 150-200% returns compared to just buying and holding bitcoins during a good 3 year period. In other words, I could buy 7 bitcoins right now with $210,000. Invest the same amount in the right miner rig/setup/group and you could probably end up with somewhere between 10-15 bitcoins at the end of 36 months. Miner technology (ASICS) typically needs to be updated about every 3 years which is why I chose 3 years.

Now...the price of bitcoin is so volatile that this could mean an increase or decrease in your dollar value. In most 3 year periods that same $210,000 invested in the above example might be worth somewhere between $105,000 and $750,000 over an average time frame given BTC history. Electricity costs and ASIC costs are the main costs of this investment and the ASICS are a depreciating asset.

Electricity is the biggest problem. Trying to pull electricity from the peak grid hours in California would be cost prohibitive. However, harvesting hydroelectric/nuclear/gas flare/or yes COAL electricity at very cheap prices, at off peak hours when it is typically wasted, allows one to make a very good profit.

May sound crazy, but all of this is going on. In huge volumes.

[Zaphod]

I wonder about this all the time. At 4 cents, an article in Forbes says it was $8,200 in 2020, before the latest halving, so it should be $30,750 under the same conditions at 15 cents, but after the 2021 halving, wouldn’t it be $67,500 worth of electricity burned per Bitcoin? It’s all very confusing....

well it is when you say halving and then double stuff, what do you expect? /s

[chucki]

I wonder about this all the time. At 4 cents, an article in Forbes says it was $8,200 in 2020, before the latest halving, so it should be $30,750 under the same conditions at 15 cents, but after the 2021 halving, wouldn’t it be $67,500 worth of electricity burned per Bitcoin? It’s all very confusing....

The last halving was in May 2020. No halving in 2021. The next will be in 2024.

[CordMcNally]

Mining is a very interesting business. They search hard for cheap electricity and can move when necessary. But at this point it is mostly very large companies doing the majority of mining because it is so competitive. I have looked at it and ROI over most 3 years periods from investing in the correct miner setup has historically ranged from 150-200% returns compared to just buying and holding bitcoins during a good 3 year period. In other words, I could buy 7 bitcoins right now with $210,000. Invest the same amount in the right miner rig/setup/group and you could probably end up with somewhere between 10-15 bitcoins at the end of 36 months. Miner technology (ASICS) typically needs to be updated about every 3 years which is why I chose 3 years.

Now...the price of bitcoin is so volatile that this could mean an increase or decrease in your dollar value. In most 3 year periods that same $210,000 invested in the above example might be worth somewhere between $105,000 and $750,000 over an average time frame given BTC history. Electricity costs and ASIC costs are the main costs of this investment and the ASICS are a depreciating asset.

Electricity is the biggest problem. Trying to pull electricity from the peak grid hours in California would be cost prohibitive. However, harvesting hydroelectric/nuclear/gas flare/or yes COAL electricity at very cheap prices, at off peak hours when it is typically wasted, allows one to make a very good profit.

May sound crazy, but all of this is going on. In huge volumes.

I'm not going to say it's common but there are several companies who use the oil and gas industry for cheap energy. They partner with companies to use their flared natural gas. I'm not sure the price they're paying but I would assume it's cheaper than traditional electricity. It's a win/win for both companies.

[Jaqen Haghar MD]

The last halving was in May 2020. No halving in 2021. The next will be in 2024.

Ah, my mistake, $30,750 in electricity at those rates to make a Bitcoin then.... I guess??? I imagine that’s why so much mining is done in countries with cheap energy,

Burning that much real physical energy, to solve a math problem, so a computer program can say you have an idea on your hard drive that exists as a specific series of numerical 1s and 0s, has become valuable to humans.

We humans have some strange ideas of value indeed. What could possibly go wrong?