Bitcoin Family Says It Lost $1 Million in Value This Year

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

Didi Taihutto

The “Bitcoin Family” has lost more than $1 million on its bitcoin investment since the world’s most popular digital currency peaked at around $69,000 in November 2021, but patriarch Didi Taihuttu is as bullish as ever.

“I’m buying bitcoins every day,” Taihuttu told CNBC by phone from a beach in Lagos, Portugal. “For me, the lesson that I learned in the last two cycles is: when everyone is freaking out and when everyone thinks Bitcoin is going to crash, I am slowly walking away and buying Bitcoin.”

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

Along the way, Taihuttu exited his bitcoin position and subsequently bought back, exchanging his coins at opportune moments.

“That’s the life of bitcoin,” he said.

Taihuttu tells CNBC that he sold about 15% of the family’s total bitcoin holdings when the price fell to the $55,000 level in late November.

“$55,000 to me was confirmation that we would go lower,” Taihuttu continued.

Romaine and Joli Taihuttu on a beach in Lagos, Portugal

Didi Taihutto

Extreme volatility is the price of doing business in the digital asset market. In the last decade, bitcoin has experienced two prolonged periods of low prices before recovering. In the previous crypto winter of 2018, bitcoin lost more than 80% of its value before recovering, eventually hitting its all-time high last year.

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

“If your time frame is a week, 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.” . Hogan continued.

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Taihuttu, which studies the price charts of the crypto market and follows popular indicators like Mayer’s multiple — thinks that in the current price cycle, bitcoin will bottom out between $15,000 and $20,000, before bouncing back to over $140,000 by 2025. And right now, according to Taihuttu, is the “ultimate time to buy.”

His investment strategy has worked quite well so far. Taihuttu tells CNBC that his portfolio has gained more than 2,000% in the last six years.

“Little by little, people will understand that being in bitcoin and HODLing is more profitable than always trying to catch that altcoin that will multiply by thousands,” Taihuttu said.

Taihuttu’s 70/30 Rule

In the last six years, the Dutch family of five has traveled the world. But after spending time in 40 countries, they decided to put down roots in Portugal, which is one of the last places in Europe with a 0% tax on bitcoin

Taihuttu’s latest project is to operate a bitcoin bar on one of the most popular beaches in Lagos, to “lead by example”. He also plans to spread the bitcoin gospel by turning all vendors along that stretch of arena into Lightning-friendly retailers. Lightning is a payment platform built on top of the bitcoin base layer that enables low-cost, near-instant transactions.

“I think it will take about six months and I will have this entire beach accepting bitcoins,” he said.

The family’s faith has been tested in the past year. It’s been a rough few months for the cryptocurrency market as token prices plummet and some of the most popular companies in the industry go bankrupt.

The chaos has spooked investors, wiping out more than $2 trillion in value in a matter of months, and wiping out the life savings of retail traders betting big on crypto projects billed as safe investments. On Thursday, bitcoin posted its worst quarterly loss in more than a decade.

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First customers paying in bitcoin at the Taihuttus beach bar in Lagos, Portugal

Didi Taihutto

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

At any given time, the Taihuttus keep 70% of their bitcoin holdings in cold storage (which is inaccessible without physically going to retrieve it), and the other 30% in a hot wallet, meaning the coins are connected to Internet, either through a mobile phone wallet or an online exchange.

Of the 30% of cryptocurrency storage, some is held in bitcoin and the rest is held in a mix of stablecoins pegged to the US dollar, including tether, USDC, and dai. This type of “hot” storage allows owners relatively easy access 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 increases, I make sure that 70% is in cold storage, so you can’t touch it from there,” Taihuttu explained.

Taihuttu has gone to great lengths to make their cold wallets especially difficult to access.

Most of the family’s crypto fortune is held in secret vaults on four different continents, including two stashes in Europe, another two in Asia, one in South America, and a sixth in Australia. Neither site is underground or on a remote island, but the family told CNBC that the crypto stashes are hidden in different ways and in a variety of places, ranging from rental apartments and friends’ houses to self-storage sites. .

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

Didi Taihutto

The Taihuttus also hide the seed phrases (i.e. a unique grouping of 12 to 24 words used to access digital assets) on the same continent as their corresponding hardware wallet, but in different countries. Seed phrases are different than the private keys used to access crypto wallets, but it is crucial that users keep track of both.

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“Cold storage often refers to cryptocurrencies that have been moved to wallets whose private keys, the passwords that allow the cryptocurrencies to be taken out of the wallet, are not stored on computers connected to the Internet, so hackers cannot hack the computer … and steal the private keys,” said Philip Gradwell, chief economist at Chainalysis, a blockchain data firm.

Beyond the benefit of basic cyber hygiene and protecting its tokens from bad actors, Taihuttu has also gone out of its way to protect its properties from itself.

“I think if I had those hardware wallets with me, maybe I’d be more emotionally invested, and maybe when I see Bitcoin drop, I’d grab the hardware wallet and start selling or buying,” he said.

That said, the Dutch father of five says he’s never too far from his ledger or opening sentences.

“I can always fly cheap with RyanAir or AirAsia. In three hours, I’m there.”

Of the bitcoins the Taihuttus have stashed around the world, nearly all of their coins are KYC-free, meaning they are not subject to the “Know Your Customer” rules that centralized exchanges require to prevent them from being used to launder money or engage in other illegal activity. That means no one, including governments or friends, knows exactly how much Bitcoin Family has stored.

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

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

“Each country has its own desk. There is one in Mexico that generates up to a million dollars a day in cash,” Taihuttu continued, although he noted that you may have to buy at a premium when you buy OTC.

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