BTC Hodl: Planning on taking profit?
There are so many people new to bitcoin and new to investments in general. Many out there are investing in bitcoin and have no idea how the crypto market works or others who do and decide to hodl, an excellent option for those who wish to buy and hold and are not interested or don't know how to be a trader.
Buying bitcoin and deciding to hold it is a whole process that has to be done safely. Even though hodlers are not day traders, you must still know the basics of how exchanges work and how to hodl safely. Best practices include storing your crypto investment on a wallet and not on exchanges because they are centralized and vulnerable to hacks and government regulations.
Like every other market, there are constant speculations on bull run expectations. With the appearance of COVID, excessive money printing, government funds to help citizens, among others, these actions have brought many known bitcoin analysts to jump on moon boy expectations in less than two years. I am a bitcoin holder, and this made me think about what to do when this happens. I was not present in the 2017 bull run, so this next one would be my first, and I am sure I am not the only one.
So, what to do on the next bull run? Take profits, of course, but how. That will depend on what your expectations are and what your intentions are with your money.
Do you take all your money out? Some suggest leaving 25% of your crypto invested just in case it keeps going higher, based on the logic that you should not have 100% of your investments on only one asset. I spoke with DavinciJ15, about this and he suggested taking profit when we see the numbers we want and selling, not losing on the value we wish to sell. There where a few things he mentioned we must keep in mind. Such as, do we want to take profit and sell because we want to use the money for something in particular? If that is the case, then yes, liquidate your crypto to fiat and buy what you wish but keep in mind what fiat you are liquidating to because that fiat can lose value as we have seen with different currencies worldwide. He also suggested a good option would be to liquidate and put your money on another investment such as gold; he points out gold because it is a safe place to save your money in a less volatile market.
Also, very important to keep in mind the taxes involved with exchanging crypto into fiat cash, depending on where you live, different laws will apply. Crypto is still a new market; however, most countries have taken it upon themselves to regulate them. As crypto adopters, we all must be aware of them and avoid future problems with internal revenue.
The next bull run will not be tomorrow, but that day will come, and it is essential, especially for newbies, to take a moment and plan that moment out. Analyze your options, so you are not entirely lost on what to do when that moment comes. Not knowing what to do can be a factor in losing profit.
By: Carolina Pérez