Authored by Judy Smith
The year 2020 has been a roller-coaster year for Bitcoin and the rest of the crypto markets. We saw large price drops and are cruising through the all-time highs with institutions showing interest in obtaining all the newly minted coins.
Most people have shown interest once again and choose to buy Bitcoin before it goes far out of the consumer’s reach. But, while most seem to be ecstatic about the price going to new highs, experienced traders remain objective and unemotional. They have targets. They wait for the right moment to sell to lock in their profits.
This article is written at a time when most people don’t even think about selling. However, it comes as a precautionary measure that you can always fall back to once you feel the mania of the retail money peaking dangerously. We are going to be talking about selling your coins most profitably. Let’s delve in.
While most people use dollar-cost averaging (DCA) to buy into crypto coins, you can use the same method to exit the market gradually as new highs are being reached. This selling method might not be the most “high-risk, high-reward” option, but it ensures that you will most likely be in profit by the time your coins are sold. Think about it - in 2020 alone, Bitcoin already up nearly 170% and shows no signs of slowing down. By exchanging a set number of funds each month during this uptrend, you will manage to “lock-in” lots of profit, which you can later reinvest when the market reaches its bearish stages.
This is how the average holder sells his coins. Having trained their emotional intelligence through several market cycles, they are determined to hold onto their coins until a certain amount is reached.
For example, say you bought Bitcoin at $11,000. After studying the market fundamentals, you may conclude that coin is headed anywhere between $100,000 and $200,000. In this case, you’d sell the majority of your coins (say 50%) once the cryptocurrency reaches the low-end of your target, 25% when the cryptocurrency reaches the average of your target ($150.000), and the remaining 25% when the coin reaches the high end of your target. This way, the average selling price will be higher than the low end of your target, and you will still make sure to lock profits along every step of the process.
With cryptocurrency debit cards being introduced worldwide, cashing out your funds into FIAT currency is expensive when it comes to fees and inefficient when it comes to taxes. Head over to exchange, select a Bitcoin/stablecoin pair, and trade on the spot. Then, transfer the newly obtained stablecoins into your checking account and start using your debit card for any purchase you wish to make. Unless you want to make a large purchase at once (e.g., purchase your family home without a mortgage), selling in this way is in your best interest, and you will likely maximize the purchasing power of your funds. At the same time, the U.S. Dollar continues to decline in value.
You may find Bitcoin trading an easy thing to do, but most people don’t understand it. This is why (if you’ve been vocal about coin) you will get many people asking you how to buy it. Here is the deal - a lot of people act like brokers for those willing to purchase BTC. In essence, you become a real like crypto coin ATM and sell your coins with a hefty “broker’s overhead.”
Here’s how it works. You make a coin purchase from an exchange, and how the BTC in your account. You then reach out to those interested in buying BTC and offer to help them out by selling them your coins with a 10% overhead cost. As soon as you receive the money, you can send BTC to their address. And just like that, you are now 10% richer in terms of Bitcoin.
This is the riskiest but most rewarding method to sell your coin and is mostly used by swing traders. Essentially, when you are doing is timing the market. Once you notice a clear signal indicating a potential downtrend, you can short Bitcoin with additional leverage.
This can be done on several exchanges, including Binance, Bifinex, and Bittrex. Know, however, that you may also lose a lot of money in case the price ends up going upwards instead. The risk is yours, and so are the potential profits.