The “Bitcoin family” has lost more than a million dollars since the world’s most popular digital currency peaked at about $ 69,000 in November last year – but the family’s father, Didi Taihuttu, is as optimistic as ever.
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“I buy Bitcoin every day,” he said in a telephone interview with CNBC from the coast of Lagos, Portugal. “For me, the lesson I learned in the last two cycles is – when the whole world goes crazy and when everyone thinks Bitcoin will crash, I ‘zoom out’ slowly and buy the currency.”
In 2017, Taiyuto, his wife and three daughters sold everything they owned, including their private home, in exchange for bitcoin coins. That was even when one bitcoin value was about $ 900. Currently, the currency is trading at less than $ 20,000.
Along the way, Taihuto sold his coins and then bought Bitcoin again, trading at the appropriate moments. “This is the life of Bitcoin,” he said. He said he sold about 15 percent of the family’s total holdings in Bitcoin when the price dropped to $ 55,000 at the end of November. “$ 55,000 was for me the approval that went down lower,” he explained.
Extreme volatility is the price charged by the crypto asset market. In the last decade, Bitcoin has experienced two prolonged periods of impairment before recovering. In the previous “Crypto Winter”, in 2018, the currency lost more than 80% of its value before rising again, eventually jumping to an all-time high last year.
Matt Hogan, chief investment officer at Bitwise Asset Management, said in an interview with CNBC that “there is still an aspect in the crypto whereby we are waiting for the inevitable, to see if another entity will fail, if the credit crunch continues.” “If the time frame is a week, a month or even a quarter, I think there is still significant volatility. If there is a time horizon measured in years, then yes – this is a great opportunity to think about entering the market.”
There is nowhere to go
For the past six years, the Dutch family has traveled the world. After visiting 40 countries, in March this year the family was granted residency status in Portugal – the last tax haven for cryptocurrencies in Europe, meaning the only place where individuals are exempt from any tax on digital currencies.
Taihutu’s latest venture is to run a “Bitcoin bar” on one of Lagos’ most popular beaches, to “lead by example”. It also plans to spread the word of Bitcoin by transferring businesses in the area to the “Lightning Network” platform, which enables bitcoin transactions to be made quickly and cheaply. “I think it will take about six months, and this whole beach will get bitcoin,” he noted.
The Taihutu family’s way of life has stood the test of the past year. The crypto market has gone through several difficult months – currency prices have plummeted and some of the most popular companies in the industry, such as Celsius, have collapsed. According to the “coinmarketcap” website, currency Bitcoin One is now worth about $ 19,110, currency Etherium Worth $ 1,062 and currency Ripple (XRP) is worth about $ 0.31.
The chaos deterred investors and erased a value of more than two trillion dollars within a few months, which delighted the savings of private traders who gambled heavily on crypto ventures that were considered “safe investments”. Last Thursday, Bitcoin closed the worst quarter since 2011.
The family rule designed to preserve capital
In order to remain “emotionally grounded” when faced with such a level of volatility, the Dutch family operates according to what they call the “70/30 rule”. At any given time, the Taihutu family holds 70% of its crypto assets in a cold wallet (a digital wallet that is not permanently connected to the Internet, and must be physically connected to the network to make transactions, also called a “hardware wallet”), and the remaining 30% in a hot wallet. Enabling continuous trading and sending and receiving of coins at any time.
Not only are Bitcoin coins kept in the hot wallet – the Taihutu family also owns a combination of stable dollar-denominated currencies like USDC, Teter ื-Dai.
“Every time our capital grows, I make sure 70% is in the cold wallet so I can’t touch them from there,” the father explained.
Taiyutu went out of his way to make family cold wallets particularly difficult to access: Most of the family’s crypto capital is scattered in secret safes on four different continents, including two hiding places in Europe, two more in Asia, one in South America and another in Australia. None of these sites are underground or on a remote island, but the family told CNBC that its cryptocurrencies are hidden in various ways and in a variety of locations, from apartments for rent and friends’ houses to warehouses for rent.
“Because we travel all the time, I do not want to travel with my bitcoins in my pocket,” Taihuto explained in an interview with Globes in April. “The safest way to store bitcoins is in a hardware wallet. But roads can rob me, so I chose not to carry the wallets on me, but to scatter them in different places in the world.
“People need to understand that when you choose to invest in Bitcoin, you are in complete control of your money, but you also have a responsibility to protect it.”
The family also hides its seed phrases – a unique set of 12 to 24 words used to access crypto assets, HA) on the same continent as their own cold wallet – but in different countries. Went out of his way to protect his holdings from him. “I think if I had these wallets with me, I might have been more emotionally involved, and maybe when I saw Bitcoin plummet, I would grab the digital wallet and start selling or buying,” he explained.
“The ultimate moment of purchase”
Taihoto estimates that in the current price cycle, Bitcoin will reach the bottom of about $ 15-20,000, and will eventually jump to more than $ 140,000 by 2025. He claims that now is the “ultimate purchase moment.”
So far, the Bitcoin family’s strategy has worked. According to Taihoto, in the last six years the family’s portfolio has accumulated more than 2,000%. “Slowly, people will realize that being in Bitcoin and HODL (a HODL strategy that means holding rather than selling. Abbreviations for ‘Hold on For Dear Life’) is more lucrative than always trying to grab that decentralized currency that will reach thousands,” he said. said.