When Should You Sell Bitcoin?
Many people have decided to invest in Bitcoin in recent years. As a result of more people buying Bitcoin, the price of Bitcoin has gone up a lot in recent years. In November of 2021, Bitcoin reached its highest price ever of $68,000. This continued to drive people to invest in the cryptocurrency.
However, once people invest their money in Bitcoin they often wonder when they should sell their Bitcoin holdings. Although there is no right answer, there are some helpful tips and ideas that exist to help you sell your holdings when it is best for you. If you want to learn about when to sell your Bitcoin, then you should keep reading.
Reasons to Sell Bitcoin
Before you should think about when to sell your Bitcoin, you should probably think of reasons why you would want to sell it in the first place. There are many reasons that exist for selling your Bitcoin, and they vary from person to person. Here are some tips and examples of reasons to sell your Bitcoin.
You Need the Money for Bills
This should be a no-brainer. If you are struggling to pay for your bills like your mortgage, health insurance, etc. You should not hesitate to sell your Bitcoin holdings. You don’t need to sell all of the Bitcoin you own, but if you need all of it to pay for your bills then that is what you should do.
It is much better for you to be able to pay for your mortgage or rent than to have money invested in Bitcoin. You should definitely prioritize paying your bills over investing.
You Are Impatient And Don't Want to Wait
Now this reason is much different than the previous one. In this situation you would not be selling your Bitcoin out of necessity, but rather because you just want to. Whenever you are investing in stocks or cryptocurrency you should always consider what gains you would be satisfied with.
If you bought Bitcoin and the price increased by a few thousand dollars a couple of months later, then you might be tempted to sell your Bitcoin. It can be very tempting to take your profit and run with it. If you are satisfied with your gains, then it is entirely up to you if you want to take your profits then or not.
Don't Sell Because It's Crashing
There is, however, something that you would be strongly advised not to do, and that is to sell your Bitcoin as it is crashing. The only reason you should sell your Bitcoin when its price is crashing is because you need the money to pay for your bills. Just because the price is crashing you should not scare you into selling your holdings just to minimize losses.
The truth is that almost 100% of the time the price bounces back and reaches an even higher price than before. You will be very disappointed if months after you sold your holdings at a loss the price of Bitcoin doubled. This is something that has happened before and will more than likely happen again.
Why You Should Hold Onto Your Bitcoin
The main reason why you should hold onto your Bitcoin is because it is a long term project. It is not something meant to take over the finance world within a year. Bitcoin is something that could very well be the future of finance in the next five to ten years, and it might be around for decades to come.
There is also a finite amount of Bitcoin which means that when the final Bitcoin is mined the price will increase. You should buy Bitcoin with the idea of holding it for the long run.
What You Should Do When Bitcoin is Crashing
As mentioned earlier, you should not sell your Bitcoin when the price is crashing. Selling during this time makes little sense as you are realizing your losses. You need to think about the fact that until you sell, you will not lose any money. The same principle applies to profits. You will not earn any profits from the price of Bitcoin increasing until you sell it.
With this in mind, here are two things that you should do when Bitcoin is crashing.
Don't Look at Your Balance
Looking at your balance is only going to tempt you or scare you into selling your holdings. Hopefully by now it is drilled into your head that the worst time to sell your Bitcoin is during a crash. Once again you should only sell your Bitcoin during a crash if you need the money for bills. In order to avoid being nervous about the price of Bitcoin you should just forget that you even own it.
Buy More Bitcoin
If you have the money in hand to invest into Bitcoin during a crash, then you should buy some more. This is a strategy commonly known as “buying the dip”. This strategy is used by long term investors to buy Bitcoin at discounted prices during a market crash.
Obviously not every person can afford to continue to buy Bitcoin during a market crash, but if you can do it, it is definitely a great strategy for your investment portfolio.
Invest Your Bitcoin
There are websites that you can find like MintDice.com where you can invest your Bitcoin and earn returns on your Bitcoin even if the market isn’t going in the direction you want. This website has a cryptocurrency casino where people can bet using Bitcoin. As an investor, you can put your Bitcoin on this site and fund the house’s bankroll. You will earn a portion of the Bitcoin every time a customer loses. Then, when Bitcoin is on the rise once again, you will find you have more than you did before, meaning more profit!
Overall, answer to the question of when to sell bitcoin depends on every person. There will never be a time where it is right for everyone to sell their Bitcoin. You should consider the reasons why you would sell your Bitcoin in the first place and be sure it isn’t out of fear or trying to cut your losses.
Hopefully you learned some tips and strategies of when to sell your Bitcoin, and what to do with it in the event of a market crash.