Nobody knows how this bull market will play out. Will we repeat the pattern of 2013 and 2017? is this the supercycle to end all cycles? are we in a bear market? Who knows. But Personally I think it is going to play out similar to the past, with a blow-off-top followed by a long bearish period.
I have a plan, and I'm sure I'm not the only one thinking about it:
- Sell into stablecoins as near the peak as I can.
- Park those stablecoins and earn interest.
- Buy back during the bear market.
- Have more crypto
I was laying awake at night thinking about it and there are too many variables for my small brain to keep track of. I have one simple question to answer:
How much bitcoin can I buy back if I sell at <peak price> and buy back at <post-peak price>?
Which spurs the next questions:
What if I sell too early? What if I think for example I sell thinking $100k BTC is the top but the market continues to rally above $300k? Will I still be able to buy back more than I've sold? And how much of a drop will we see this time round? 90% again? What if it only drops 60% from it's peak, will I still be able to buy back more than I sold? In my opinion, this bull cycle is a once in a lifetime opportunity to significantly increase my holdings and I do not want to mess it up and end up with less than what I started with.
It was driving me a bit crazy so I made a calculator on google sheets to tell me what might happen given all the different variables. I've found it quite useful and it was fun to build, and I'd like to share it with the community:
https://docs.google.com/spreadsheets/d/1O9QujvOGiDlxdR55hTVP6U3BMadAKvgf5-Ji6jX3twk/edit?usp=sharing
I haven't made this editable, please make your own copy so you can edit the fields. Let me explain what we're looking at and how you can use it:
The calculator is divided into 4 sections, and you work from left to right. you need only edit the BLUE CELLS and all of the rest is automatic. I've included some instructions in the sheet but here I'll explain in a bit more depth.
The USER INPUTS section
CHOOSE COIN: There is a drop down menu to choose the coin you're working with. This doesn't change anything other than the dialogues throughout the sheet, so it doesn't really matter what you choose, it will work the same, just gives nice readable outputs. If the coin you're working with isn't listed, you can just type it in. I've just chosen the top 20 coins from coinmarketcap.
WHAT IF I SELL UP TO A PRICE OF: This is basically the price that you think the coin can and will get to. In the image above, I'm planning for BTC to hit $150k at it's peak, and that's where I want to set my highest sell order.
BUT IT ACTUALLY PEAKS AT: Do not be fooled, you do not know, I do not know, and nobody knows what price BTC will actually peak at. This is you first real unknown variable. What if you sell your stack thinking $150k is the top but it just keeps going? $200k... $300k? This figure is what you can tweak to see just how badly you have to get it wrong before you're in danger town and risk buying back less that what you started with.
START SELLING % FROM PEAK: I don't know about you, buy I plan on selling in increments up to my peak sell point, DCA in is important, just as it is to DCA out. this is a filed that'll just make it easy to spread out your sell points based on the maximum speculated peak. For example if your maximum sell ('what if I sell up to a price of') point is $100k for simplicity, selecting 25% here will start sells at $75k, and selecting 50% will start it a $50k. Get it?
DEFI INTEREST APY%: Once you've sold your stack into stablecoins, if you plan on parking them in some platform to earn interest, you can input the APY rate of the platform here, you'll see in the BUYBACK CALCULATOR section, the interest earned over a period of a maximum 2 years is broken down into Quarters. You may want to start buying back after 3 months, you may want to start buying back after 12 months, the calculator will help you see what that will mean, how much approximately in stablecoins that you'll have. I need to emphasise the APPROXIMATELY here. The APY calculations are simple here, I calculate what 10% APY would earn over a year, and then divide that by 12, and them multiply by 3, 6, 9, etc. It will in no way be a true accurate prediction of earnings and you should consider this whole sheet a tool for a ballpark only, to help you sleep at night, and is absolutely not financial advice!
The SELL CALCULATOR section:
If you plan on selling only in one transaction, you can either set the aforementioned field to 0%, or you can leave all these cells as 0 and only enter a value for the top one. Personally I plan on selling in increments and weighting more towards the top end of my speculated peak. This section will show you what the price points would be for sell orders, and how much you'll bag at each price point, depending on how much coin you sell at said point.
The bottom of this section will tell you the total amount of coins sold, what your average sell price is and how much in total you'll have in stablecoins after selling.
The BUYBACK CALCULATOR section:
This is where you get the bulk of your answer, broadly. At the top you'll see how much interest your stablecoins will have earned you each quarter (based on your APY% figure) and it will tell you what the price of the coin will be in the event of a 60, 70, 80, or 90% drop from it's peak. Adjacent to this, you'll see how much coin you could buy back at this pricepoint, based on maximum stablecoin yield or zero stablecoin yield. The cool part about this section is it will go red when you are in danger of making back less coin that you started with, which is the whole point of me making this thing in the first place. Try it out, put in a way higher figure between your two price predictions and see how badly you have to miss the mark before you make a loss.
There is a broad range displayed at the bottom of this section to show on average how much you'll be looking at buying back.
The SUMMARY/FINETUNE section:
This was a later addition, this enables you to narrow down on some parameters to see a bit more accurately (Still very very approximate, this is not financial advice) You can tweak here how long you'll be earning interest at your defined rate, and you can enter a specific price for the coin, totally arbitrarily, and see how much you could buy at that price.
I have tried to make this as understandable and user friendly as possible.
Make your own copy, have a play, this is in no way financial advice, I am not a mathematician and I am not a trader, I know nothing about finance, I just got a bit carried away making this and would like to share my work with the community :)
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