Seeing lots of posts with questions of “when to sell” recently, and I’m expecting these posts to increase as more media attention comes in. So I am writing this so that I can link it as a warning to the newbies coming in.
There are 2 main options for bitcoin First option; use bitcoin as a savings account. Dollar cost average in or buy the dips, never sell for depreciating fiat but spend when needed. This is what I and many others do, and it is a winning long term formula.
Second option, trading aka timing the market. Many people can trade up their position doing this; but please do your research - so many think they can beat the market by watching YouTube videos and Twitter (or asking Reddit). Most amateurs spend hours doing this just to lose a huge chunk of their portfolio. You’re not only up against expert traders and whales, but also tax. For example, let’s say you read every trading book and want to outsmart the market and plan to sell top and rebuy on a dip. Say you sell one bitcoin for 200k that you bought for 10k, with the plan to rebuy at 100k. In the unlikely event you outsmarted the market; you sold one bitcoin for 200, set aside 60k for tax, rebuy 1.4 bitcoin in 6 months. But what if you aren’t smarter than the market (or a spot etf is approved, or another large company announcement, or another country adopts bitcoin as legal tender) and you end up rebuying at 280k, your one bitcoin is now 0.5 bitcoin (or 140k of stocks with a current cape ratio of 40) https://www.multpl.com/shiller-pe)
Nothing wrong with day trading, just my warning to people who don’t understand how difficult it is.
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