“Bitcoin Family” opens a bitcoin bar on the beach in Lagos, Portugal.
The “Bitcoin family” has lost over $1 million on their Bitcoin investments as the world’s most popular digital coin peaked at around $69,000 in November. 2021, but Patriarch Didi Taihuttu is more optimistic than ever.
“I buy bitcoins every day,” Taihuttu told CNBC by phone from a beach in Lagos, Portugal. “For me, the lesson I’ve learned in the last two cycles is this: when the whole world goes crazy and when everyone thinks bitcoin is going to crash, I slowly zoom out and buy bitcoins.”
In 2017, Taihuttu, his wife, and three daughters liquidated all of their possessions, trading their 2,500-square-foot home and virtually all of their earthly possessions for bitcoin and life on the road. This was when the price of bitcoin was around $900. Bitcoin is currently trading around $19,200.
Along the way, Taihuttu exited his bitcoin position and then bought back, trading his coins at the right times.
“This is the life of Bitcoin,” he said.
Taihuttu told CNBC that he sold about 15% of the family’s bitcoin holdings when the price dropped to $55,000 in late November.
“$55,000 for me was confirmation that we would go lower,” Taihuttu continued.
Roman and Joly Taihuttu on the beach in Lagos, Portugal.
Extreme volatility is the price of doing business in the digital asset market. Over the past decade, bitcoin has experienced two extended periods of price decline before recovering. In the previous crypto winter of 2018, Bitcoin lost over 80% of its value before recovering, eventually rising to its all-time high last year.
“There is still an aspect to crypto that we are waiting to see if another shoe falls, if another institution collapses, if the credit cascade continues,” Matt Hogan, chief investment officer of Bitwise Asset Management, said in an interview.
“If your time frame is a week, or a month, or even a quarter, I think there is still significant volatility. If you have a time horizon measured in years, then yes, this is a great opportunity to think about entering the market,” continued Hoogan.
Taihuttu – studies price charts in the cryptocurrency market and monitors popular indicators such as Multiple Mayer – thinks bitcoin will bottom somewhere between $15,000 and $20,000 in the current price cycle before jumping to $140,000 by 2025.
So far, his investment strategy has worked pretty well. Taihuttu told CNBC that his portfolio has grown more than 2,000% in the past six years.
“Gradually, people will realize that being in bitcoin and HODLing is more profitable than constantly trying to catch this altcoin that will go thousands of times,” Taihuttu said.
Over the past six years, the Dutch family of five has traveled the world. But after visiting 40 countries, they decided to put down roots in Portugal, which is one of the last places in Europe with zero property tax. bitcoin.
Taihuttu’s latest project is to launch a bitcoin bar on one of Lagos’ most popular beaches to “lead by example”. It also plans to spread the Bitcoin gospel by turning all merchants in this stretch of sand into Lightning-friendly retailers. Lightning is a payment platform built on top of the underlying Bitcoin layer that provides near-instantaneous low-fee transactions.
“I think it will take me about six months and this whole beach will accept bitcoins,” he said.
The family’s faith was tested last year. These have been a tough few months for the crypto market as token prices plummeted and some of the most popular companies in the industry go belly up.
The chaos spooked investors, wiping out more than $2 trillion in a matter of months and wiping out the savings of retail traders who were betting big on crypto projects declared to be safe investments. On Thursday, Bitcoin published its worst quarterly loss in over a decade.
The first customers paying with bitcoin at the Taihuttus beach bar in Lagos, Portugal.
To stay “emotionally balanced” in this level of volatility, the Dutch family of five follows what they call the 70/30 rule.
At any given moment, the Taihutu are storing 70% of their bitcoins in cold storage (which is not accessible). physically not going to extract it), and the remaining 30% in a hot wallet, which means that the coins are connected to the Internet, whether through a mobile phone wallet or an online exchange.
Of the 30% of the cryptocurrency stash, some is held in bitcoin and the rest is held in a mix of USD-pegged stablecoins, including tie, USDC, and give. Such hot storage makes it relatively easy for holders to access their tokens so they can access and spend their cryptocurrency. The trade-off for convenience is the potential impact of attackers.
“Every time our capital increases, I make sure 70% is in cold storage so I can’t touch it from there,” Taihuttu explained.
Taihuttu goes out of his way to make accessing his cold wallets particularly difficult.
Most of the family’s crypto wealth is held in secret vaults on four different continents, including two caches in Europe, two more in Asia, one in South America and a sixth in Australia. None of these locations are underground or on a remote island, but the family told CNBC that crypto stashes are hidden in many different ways and in different places, ranging from rented apartments and friends’ houses to self-storage vaults.
Teddy, the Taihutt dog, on the beach in Lagos, Portugal, with Jessa and Roman.
Taihutu also hide seed phrases (that is, a unique group of 12 to 24 words used to access digital assets) on the same continent as their respective hardware wallet, but in different countries. Seed phrases are different from the private keys used to access crypto wallets, but it is imperative that users keep a record of both.
“Cold storage often refers to cryptocurrencies that have been moved to wallets whose private keys — the passwords that allow cryptocurrencies to be moved out of the wallet — are not stored on computers connected to the Internet, so hackers cannot break into the computer and steal the private keys,” Philip said. Gradwell, chief economist at Chainalysis, a blockchain data company.
Aside from the benefits of basic cyber hygiene and protecting his tokens from intruders, Taihuttu has also gone to great lengths to protect his assets from himself.
“I think if I had these hardware wallets with me, I might be more emotionally involved, and maybe when I see bitcoin drop, I would grab a hardware wallet and start selling or buying,” he said.
However, the Dutch father of five says he’s never too far from his ledger or opening phrases.
“I can always fly cheap with RyanAir or AirAsia. I’ll be there in three hours.”
Of the bitcoins that taihuttu have been scattered around the world, almost all of their coins have not passed KYC, which means that they are not subject to the Know Your Customer rules that centralized exchanges require to prevent them from being used for laundering. money or engage in other illegal activities. This means that no one, including governments or friends, knows exactly how much the Bitcoin family holds.
To do this, Taihuttu bought most of his bitcoins without a prescription.
“There are many forums where you can still buy bitcoin with cash,” Taihuttu told CNBC.
“Each country has its own department. There is one in Mexico that makes up to a million dollars a day in cash,” Taihuttu continued, although he noted that you may have to buy at a premium when buying OTC drugs.