Bitcoin Family says they lost $1 million this year

‘Bitcoin Family’ is opening a bitcoin beach bar in Lagos, Portugal

Didi Taihuttu

The “Bitcoin Family” has dropped more than $1 million in bitcoin investments since the world’s most popular digital currency hit nearly $69,000 in November 2021 – but patriarch Didi Taihuttu is on the rise as always.

“I buy bitcoin every day,” Taihuttu told CNBC from a beach in Lagos, Portugal, by phone. “For me, the lesson I’ve learned from the last two cycles – while the whole world is going crazy and everyone is thinking bitcoin is going to crash, I’m slowly walking away and buying bitcoin.”

In 2017, Taihuttu, his wife and three daughters liquidated everything they owned, selling a 2,500-square-foot house and nearly all of their worldly assets in exchange for bitcoin and a life on the road. This was when the bitcoin price was around $900. Bitcoin is currently trading around $19,200.

Along the way, Taihuttu exited his bitcoin position and then bought it again and traded his coins at the appropriate moments.

“This is the life of Bitcoin,” he said.

Taihuttu told CNBC that when the price dropped to the $55,000 mark in late November, the family sold about 15% of its total bitcoin holdings.

“For me, $55,000 was confirmation that we were going down even more,” Taihuttu continued.

Romaine and Joli Taihuttu on a beach in Lagos, Portugal

Didi Taihuttu

Extreme volatility is the cost of doing business in the digital asset market. Over the past decade, bitcoin has experienced two prolonged periods of depressed prices before recovering. In the previous crypto winter in 2018, bitcoin lost more than 80% of its value before bouncing back, finally rising to an all-time high last year.

“There is still one aspect in crypto that we are waiting to see if another shoe will drop, if another asset will fail, if the credit cascade will continue,” Matt Hougan, Bitwise Asset Management chief investment officer, said in an interview.

“If your timeframe is a week, a month, or even a quarter, I think there’s still significant volatility. If you have a time horizon measured in years, yes, that’s a great opportunity to consider entering the market.” He continued to Hougan.

Taihuttu — who studies crypto market price charts and follows popular indicators such as Mayer Multi — in the current price cycle, he thinks bitcoin will bottom between $15,000 and $20,000 before climbing above $140,000 by 2025. And right now, according to Taihuttu, is the “final moment of purchase.”

The investment strategy has worked pretty well so far. Taihuttu told CNBC that his portfolio has gained more than 2,000% over the past six years.

“Gradually, people will realize that being in bitcoin and HODLing is always more profitable than trying to catch altcoins that will go up thousands of times,” Taihuttu said.

Taihuttu’s 70/30 rule

First customers to pay with bitcoin at Taihuttus’ beach bar in Lagos, Portugal

Didi Taihuttu

The Dutch family of five follows what they call the 70/30 rule to stay “emotionally grounded” when faced with this level of volatility.

At any given time, Taihuttus keeps 70% of its bitcoin holdings in cold storage (inaccessible without being physically retrieved) and the other 30% in a hot wallet; that means the coins are connected to the internet. through a cell phone wallet or an online exchange.

Some of the 30% crypto stash is held in bitcoin and the rest is in a mix of US dollar pegged stablecoins including tether, USDC and dai. This type of “hot” storage provides relatively easy access for holders to their tokens so they can access and spend their crypto. The trade-off for convenience is potential exposure to bad actors.

“Every time our capital goes up, I make sure 70% of it is in cold storage, so I can’t touch it from there,” Taihuttu said.

Taihuttu has done its best to make their cold wallets particularly difficult to access.

Most of the family’s crypto wealth is in secret vaults on four different continents, two in Europe, two in Asia, one in South America and a sixth in Australia. None of the sites are underground or on a remote island, but the family told CNBC that cryptocurrency stores are stored in different ways and in a variety of places, from rental apartments and friends’ homes to personal storage sites.

Teddy with Taihuttus’ dog, Jessa and Romaine, on a beach in Lagos, Portugal

Didi Taihuttu

Taihuttus also hides seed phrases (that is, a unique grouping of 12 to 24 words used to access digital assets) on the same continent as their respective hardware wallets, but in different countries. Core statements are different from the private keys used to access crypto wallets – but it’s crucial that users keep track of both.

“Cold storage usually refers to crypto that has private keys – the passwords that enable the crypto to be extracted from the wallet – that are not stored on internet-connected computers so that hackers can’t get into the computer and are moved to wallets. Philip Gradwell, chief economist at blockchain data firm Chainalysis, said.

Beyond basic cyber hygiene and protecting their tokens from bad actors, Taihuttu has also gone out of their way to protect their assets from itself.

“I think if I had those hardware wallets with me maybe I would have been more emotionally involved and maybe I would have started trading or buying the hardware wallet when I saw the bitcoin drop,” he said.

However, the Dutch father of five says he’s never far from either his notebook or his seed phrases.

“I can always fly cheap with RyanAir or AirAsia. I’ll be there in three hours.”

From bitcoin that Taihuttus takes away from around the world, nearly all of its coins are not KYC – meaning they are not subject to the “Know Your Customer” rules that centralized exchanges require to prevent them from being used for money laundering. engaging in money or other illegal activities. This means that no one, including governments or friends, knows exactly how much Bitcoin Family stores.

To do this, Taihuttu bought most of its bitcoin over the counter.

“There are many forums where you can buy bitcoin with cash,” Taihuttu told CNBC.

“Each country has its own desk. Mexico has one that makes up to a million dollars a day in cash,” Taihuttu continued, noting that when you buy OTC, you may have to buy it for a premium.

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