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‘Bitcoin Household’ opens a bitcoin seashore bar in Lagos, Portugal
Didi Taihuttu
The “Bitcoin Household” is down greater than $1 million on their bitcoin funding for the reason that world’s hottest digital coin peaked at round $69,000 in Nov. 2021 — however patriarch Didi Taihuttu is as bullish as ever.
“I am shopping for bitcoin each day,” Taihuttu instructed CNBC by telephone from a seashore in Lagos, Portugal. “For me, the lesson I discovered the final two cycles is — when the entire world is freaking out and when everyone is pondering that bitcoin will crash, I’m slowly zooming out, and I am shopping for bitcoin.”
In 2017, Taihuttu, his spouse, and three daughters liquidated all they owned, buying and selling a 2,500-square-foot home and just about all their earthly possessions for bitcoin and a life on the street. This was again when the worth of bitcoin was round $900. Bitcoin is at present buying and selling round $19,200.
Alongside the best way, Taihuttu has exited his bitcoin place and subsequently purchased again in, buying and selling his cash at opportune moments.
“That is the bitcoin life,” he mentioned.
Taihuttu tells CNBC that he offered about 15% of the household’s general bitcoin holdings when the worth fell to the $55,000 value stage in late November.
“$55,000 for me was the affirmation that we might go decrease,” continued Taihuttu.
Romaine and Joli Taihuttu on a seashore in Lagos, Portugal
Didi Taihuttu
Excessive volatility is the worth of doing enterprise within the digital asset market. Within the final decade, bitcoin has skilled two extended durations of depressed costs earlier than it rebounded. Within the earlier crypto winter in 2018, bitcoin misplaced greater than 80% of its worth earlier than bouncing again, ultimately rising to its all-time excessive final 12 months.
“There may be nonetheless a side in crypto that we’re ready to see if one other shoe will drop, if one other entity will fail, if the credit score cascade will proceed,” mentioned Matt Hougan, chief funding officer at Bitwise Asset Administration, in an interview.
“In case your timeframe is per week, or a month, or perhaps a quarter, I feel there’s nonetheless important volatility. When you have a time horizon measured in years, then sure, this can be a nice alternative to consider coming into the market,” continued Hougan.
Taihuttu — who research crypto market value charts and follows well-liked indicators like the Mayer Multiple — thinks within the present value cycle, bitcoin will backside out someplace between $15,000 to $20,000, earlier than bouncing as much as above $140,000 by 2025. And proper now, in response to Taihuttu, is the “final shopping for shopping for second.”
His funding technique has labored out fairly nicely up to now. Taihuttu tells CNBC his portfolio has gained greater than 2,000% within the final six years.
“Slowly, individuals will perceive that being in bitcoin and HODLing is extra worthwhile than all the time attempting to catch that altcoin that can go instances hundreds,” mentioned Taihuttu.
Taihuttu’s 70/30 rule
Within the final six years, the Dutch household of 5 has traveled the world. However after spending time in 40 nations, they determined to put down some roots in Portugal — which is likely one of the final locations in Europe with a 0% tax on bitcoin.
Taihuttu’s latest project is running a bitcoin bar on one of the most popular beaches in Lagos, in order to “lead by example.” He also plans to spread the gospel of bitcoin by converting all vendors along that stretch of sand into Lightning-friendly retailers. Lightning is a payments platform built on top of bitcoin’s base layer that enables virtually instantaneous and low-fee transactions.
“I think it will take me about six months, and I will have this whole beach accepting bitcoin,” he said.
The family’s faith has been tested this past year. It has been a rough few months for the crypto market, as token prices plummet and some of the most popular companies in the industry go belly up.
The chaos has spooked investors, erasing more than $2 trillion in value in a matter of months — and wiping out the life savings of retail traders who bet big on crypto projects billed as safe investments. On Thursday, bitcoin posted its worst quarterly loss in more than a decade.
First clients paying in bitcoin at the Taihuttus’ beach bar in Lagos, Portugal
Didi Taihuttu
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 one 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 that the coins are connected to the internet, whether through a mobile phone wallet or an online exchange.
Of the 30% crypto stash, some is kept in bitcoin, and the rest is in a mix of U.S. dollar-pegged stablecoins including tether, USDC, and dai. This kind of “hot” storage allows owners relatively easy access to their tokens so that 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 on the cold storage, so then I’m not able to touch it from there,” explained Taihuttu.
Taihuttu has gone out of his way to make his cold wallets especially difficult to access.
Most of the family’s crypto fortune is in secret vaults on four different continents, including two hiding spots in Europe, another two in Asia, one in South America, and a sixth in Australia. None of the sites are below ground or on a remote island, but the family told CNBC the crypto stashes are hidden in different ways and in a variety of locations, ranging from rental apartments and friends’ homes to self-storage sites.
Teddy, the Taihuttus’ dog, on a beach in Lagos, Portugal with Jessa and Romaine
Didi Taihuttu
The Taihuttus also hide the seed phrases (that is, 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 to the private keys used to access crypto wallets — but it is crucial that users keep a record of both.
“Cold storage often refers to crypto that has been moved to wallets whose private keys – the passwords that enable the crypto to be moved out of the wallet – are not stored on internet-connected computers, so that hackers can’t hack into the computer and steal the private keys,” said Philip Gradwell, chief economist of Chainalysis, a blockchain data firm.
Beyond the upside of basic cyber hygiene and safeguarding his tokens against bad actors, Taihuttu has also gone out of his way to protect his holdings from himself.
“I think if I had those hardware wallets with me, I would maybe be more emotionally involved, and maybe when I see bitcoin dipping, then I would grab the hardware wallet and start to sell or buy,” he said.
That said, the Dutch father of five says he’s never too far from either his ledger or the seed phrases.
“I can always fly cheap with RyanAir or AirAsia. In three hours, I’m there.”
Of the bitcoin that the Taihuttus have squirreled away around the world, nearly all of their coins are non-KYC’ed — meaning they’re not subject to “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 that no one, including governments or friends, know exactly how much the Bitcoin Family has stored.
To do this, Taihuttu has bought much of his bitcoin over-the-counter.
“There are lots of forums where you can still buy bitcoin with cash,” Taihuttu told CNBC.
“Every country has its own desk. There’s one in Mexico that does up to a million dollars per day in cash,” continued Taihuttu, though he noted that you may have to buy at a premium when you purchase OTC.
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