‘Bitcoin Family’ opens bitcoin beach bar in Lagos, Portugal
The ‘Bitcoin family’ has lost over $1 million on its bitcoin investment since 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 bitcoin every day,” Taihuttu told CNBC over the phone from a beach in Lagos, Portugal. “For me, the lesson I’ve learned over the last two cycles is this: when the whole world panics and everyone thinks bitcoin is going to crash, I slowly zoom out and buy 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 earthly possessions for bitcoin and a life on the road. This was back when bitcoin price 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 opportune times.
“That’s the life of bitcoin,” he said.
Taihuttu told CNBC that he sold about 15% of the family’s entire bitcoin holdings when the price fell to $55,000 in late November.
“$55,000 for me was confirmation that we were going down,” Taihuttu continued.
Roman and Pretty Taihuttu on a beach in Lagos, Portugal
Extreme volatility is the price to pay for doing business in the digital asset market. Over the past decade, bitcoin has seen two prolonged periods of falling prices before bouncing back. During the previous crypto winter in 2018, bitcoin lost over 80% of its value before bouncing back, eventually reaching its all-time high last year.
“There is still one aspect of crypto that we are waiting to see if another shoe will fall, if another entity will fail, if the credit cascade will continue,” said Matt Hougan, chief investment officer at Bitwise Asset Management, in an interview.
“If your time frame 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, then yes, that’s a great opportunity to consider entering the market,” Hougan continued.
Taihuttu – who studies crypto market price charts and tracks popular indicators such as 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, that’s the “ultimate moment of purchase”.
His investment strategy has worked quite well so far. Taihuttu told CNBC his portfolio has gained more than 2,000% over the past six years.
“Slowly people will understand that being in bitcoin and HODLing is more profitable than always trying to catch this altcoin which will multiply by thousands,” Taihuttu said.
The 70/30 rule of Taihuttu
Over the past 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 run a bitcoin bar on one of Lagos’ most popular beaches to “lead by example”. He also plans to spread the gospel of bitcoin by converting all vendors along this stretch of sand to Lightning-enabled retailers. Lightning is a payment platform built on top of Bitcoin’s base layer that enables virtually instantaneous and low-cost transactions.
“I think it will take me about six months and that whole range will accept bitcoin,” he said.
The family’s faith was tested last year. It has been a tough few months for the crypto market as token prices plummet and some of the industry’s most popular companies 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 touted as safe investments. On Thursday, bitcoin posted its worst quarterly loss in more than a decade.
First customers paying in bitcoin at Taihuttus beach bar in Lagos, Portugal
To stay “emotionally grounded” in the face of this level of volatility, the Dutch family of five follows what they call the 70/30 rule.
At all times, the Taihuttus keep 70% of their bitcoin holdings in a cold room (which is inaccessible without physically going to collect them), and the remaining 30% in a hot wallet, which means the coins are connected to the internet, whether through a mobile phone wallet or an online exchange.
Of the 30% in crypto, some is held in bitcoin and the rest is in a mix of USD-pegged stablecoins 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 goes up, I make sure 70% is on cold storage, so I can’t touch it from there,” Taihuttu explained.
Taihuttu has gone out of its way to make its cold wallets particularly difficult to access.
Most of the family’s crypto fortune is in secret vaults on four different continents, including two hideouts in Europe, two more 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 the crypto caches are hidden in different ways and in a variety of places, from rental apartments and friends’ houses to self-storage sites.
Teddy, the Taihuttus dog, on a beach in Lagos, Portugal with Jessa and Romaine
Taihuttus also hide seed phrases (i.e. a unique grouping of 12-24 words used to access digital assets) on the same continent as their corresponding hardware wallet, but in different countries. Seed phrases are different from private keys used to access crypto wallets, but it is essential that users keep track of both.
“Cold storage often refers to crypto that has been moved to wallets whose private keys – the passwords that get the crypto out of the wallet – are not stored on internet-connected computers, so hackers can’t hack into the computer and steal the private keys,” said Philip Gradwell, chief economist at Chainalysis, a blockchain data company.
Beyond the benefit of basic cyber hygiene and protecting his tokens from bad actors, Taihuttu has also gone out of his way to protect his holdings from himself.
“I think if I had these hardware wallets with me, maybe I would be more emotionally involved, and maybe when I see bitcoin take a dip, then I’ll grab the hardware wallet and start selling or buying,” did he declare.
That said, the Dutch father of five says he’s never too far from his big book or key phrases.
“I can always fly cheap with RyanAir or AirAsia. In three hours, I’m there.”
Of the bitcoins the Taihuttus have scattered around the world, almost all of their coins are non-KYC, 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 activities. This means that no one, including governments or friends, knows exactly how much the Bitcoin family has stored.
To do this, Taihuttu purchased a large portion of its bitcoins over-the-counter.
“There are many forums where you can still buy bitcoin with cash,” Taihuttu told CNBC.
“Each country has its own office. There’s one in Mexico that makes up to a million dollars a day in cash,” Taihuttu continued, though he noted you might have to buy at a price. higher when you buy OTC.