My car is a piece of s—, but there’s no way I’m spending any money on anything other than bitcoin. (Photo subject is a model.) – Getty Images/iStockphoto
Dear Quentin,
I’ve managed to acquire one bitcoin. I’m a 51-year-old single woman, and I’m a fully signed-up bitcoin follower. Given the volatility, I don’t want to cash it in, as I don’t think the crypto market is “bubblish.” When I first bought bitcoin it was $48,000, and then it fell to $16,000. I bought it at the wrong time, but anyone who has ridden the storm once isn’t worried about this downturn, and they’re buying furiously.
With bitcoin, there is a limited supply and it’s not run by one organization or one person. A big drop happens every couple of years, and it’s normally what happens before a huge pump. The consensus among some observers is that there’ll be a huge pump at the end of the year to $200,000. You’ve had banks and nation states buying into bitcoin and exchange-traded funds. I’m not a financial whiz kid, but investors are trying to bring the price down so they can buy as much as possible, trying to scare the weaker hands.
Most Read from MarketWatch ‘My retirement is completely in bitcoin’: Why don’t more people do what I do?Tom Lee says there were five big reasons why markets stumbled. He has familiar advice. ‘My retirement is completely in bitcoin.’ That is, I invested in Strategy, a bitcoin treasury company. That’s because of my faith in Strategy CEO Michael Saylor. Strategy buys bitcoin and sells shares of the company. I’m not a bit worried, and I would lose lots of money if I sold today. When I bought bitcoin in 2021, I didn’t fully understand it. But I do know it’s not something that should not be traded. Once you understand that, you buy and you hold. If I had money, I’d buy the dip.
I also borrow against bitcoin. Firefish, a noncustodial peer-to-peer lending platform, puts your bitcoin BTCUSD into escrow. With Firefish, bitcoin borrowers lock in their bitcoin as collateral in wallets, while investors fund these loans for yield. This is all governed by code for security, and it avoids central custodians. I apply for a loan, lock in my bitcoin in an on-chain escrow, and receive funds. Why don’t more people do what I’m doing? What’s the catch? I don’t see one.
50-Something Bitcoin Fan Related: Bitcoin isn’t dead — it’s having an IPO moment. Here’s when the selling will stop. Long-term conviction doesn’t protect you from the sharp edge of a loan contract or the vagaries of crypto. – MarketWatch illustration
Dear 50-Something, Diversity is your friend, my friend. The catch is not whether bitcoin will rise or fall. The catch is that 100% of your retirement is in bitcoin. Your retirement is concentrated in a single, highly volatile asset and in one company whose business model is tied to that asset. A limited supply does not guarantee an inexorable rise. Whether you’re all in Nvidia NVDA, like this investor who bought the stock before the artificial-intelligence boom because he liked the company’s videogame chips, or Palantir PLTR, like this retired couple, the risk of volatility and liquidity issues are high.
I like your moxie and understand why bitcoin loyalists like you exist. You have the stomach to ride out the highs and lows. Everyone is looking for the next “Magnificent Seven” stock, or the next multibillion-dollar unicorn like OpenAI, SpaceX or Uber. It’s not for the faint of heart, especially as you have less runway until your retirement. A2025 PwC survey of 2,500 people found that “retail investors continue to be more bullish than ever, adapting strategies and patterns that resemble those in traditional asset classes.” That said, the dip suggests most people are not (currently) buying it. Amid regulatory uncertainty, Strategy MSTR is vulnerable to the same risks as other public companies (not least in how management executes the company’s relatively unique strategy of raising capital while maintaining control over its balance sheet). You clearly have an appetite for risk: Most retirement plans and investors would not allocate 100% of their investments to bitcoin or, for that matter, to a single company (you can also buy crypto directly, if you so wish). Many financial planners do not advise allocating more than 5% of a portfolio to crypto (although not everyone agrees).
When borrowing against bitcoin, if the price drops sharply and the loan-to-value ratio exceeds a set liquidation threshold, your collateral could automatically and unceremoniously be liquidated to repay the outstanding loan. Long-term conviction doesn’t protect you from the sharp edge of a loan contract, and many borrowers have lost their crypto during temporary downturns that they could have survived if they were unleveraged. Leverage amplifies your gains — and your losses. This conversation is an opportunity to look at your estate plan. Talk to a fiduciary about tax efficiency, using tax-loss harvesting during swings and, keeping in step with your optimism, getting a handle on the kind of capital gains you can expect to pay. Given that you’ve placed such a large proportion of your retirement portfolio in bitcoin and Strategy stock, it’s especially important to plan for how your private keys and digital assets would be accessed if something happened to you. Unlike traditional accounts, if heirs cannot access the keys, the assets are unrecoverable. Charlie Garcia, writing on MarketWatch, compared bitcoin to a recent IPO. “Early investors can’t sell right away. They’re locked up for months. When that lockup ends, they don’t dump it all on a Tuesday. They distribute slowly into strength. For instance, Amazon AMZN IPO’d in 1997, and the S&P 500 has grown to an average of 15% as of today.
Most Read from MarketWatch ‘I fear a significant decline in the S&P 500’: Do I sell my tech stocks before it’s too late?
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