Fred Krueger, former Wall Street trader and Bitcoin (CRYPTO: BTC) enthusiast, said Tuesday that building long-term BTC wealth requires HODLing through drawdowns and taking “the pain.”
Krueger Critiques BTC Portfolio Rebalancing
In an X post, Krueger referenced the Kelly Criterion method—a popular strategy used to determine the appropriate position size for an investment—which suggests that one should be 70% invested in Bitcoin.
He argued that those who rebalanced their Bitcoin investments when the price was between $110,000 and $120,000 are now facing unrealized losses.
“If you are using a 1-yr rebalancing, it’s unclear if they will ever be buying back lower,” Kreuger said, expecting Bitcoin to trend higher.
Generally speaking, the Kelly Criterion says you should be 70% invested in Bitcoin.
Some people rebalanced at 110-120K, but even those who did of course face mark to market pain. If you are using a 1 yr rebalancing, its unclear if they will ever be buying back lower.
Kreuger criticized those who never had any exposure to Bitcoin and are now cheering for its value to drop to feel better about missing out.
“It’s very unlikely that any significant amount of Bitcoin will ever be transferred to this cohort,” he said. “The only way to rack of significant long-term Bitcoin is to HODL and take the pain.”
When asked if they are still adding to their BTC position, Krugere replied, “Always.”
Kreuger’s HODLing suggestion comes at a time when Bitcoin is headed for a fifth straight monthly decline — its worst losing streak in eight years. The apex cryptocurrency is also on track for its steepest monthly drop since June 2022, currently trading 48% off its October peaks.
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