If you have been hanging around the crypto-sphere for more than a year, you have no doubt heard many stories about people who didn't have a proper "exit strategy". In fact, @rok-sivante has a doozey to share in his blog, you should take the time to read it sometime.
To be fair, "exit strategy" may not be the most accurate term.
Follow any crypto news site and you will no doubt read stories about this expert or that expert saying Bitcoin is on the verge of breaking out towards 100k (fill in the ATH blank).
I think the majority of us have learned by now that each of those stories should always be taken with a grain of salt. The fact remains that although we don't know when it will happen, the chances of it happening are pretty good.
Governments and regulators are finally starting to wrap their heads around this whole digital currency thing. Corporations and institutions are investing and viable use cases are being developed every day.
Some governments including the US (shocker) are even talking about their own digital currencies or at a minimum endorsing a handful of existing cryptos for mass adoption.
All of these things point to the fact that now, more than ever, it is vitally important to have some kind of plan in place for when things go boom!
So do you have a plan? I wouldn't carve my plan in stone yet, but I have started thinking about some of the things that I might need to have in place when things make a favorable turn. Even if you don't hold Bitcoin, history has taught us that whatever BTC does, the alts usually follow.
One thing I am doing, is keeping track of all of my wallets. Like many of you, I have digital assets spread across several blockchains. Knowing how to access each of the wallets and transfer tokens out of them is very important.
Know your exchanges! I can't stress this enough. It is important to know which exchange you can use to liquidate which token. There is nothing worse than finding out your preferred exchange doesn't have a trading pair for your asset.
Additionally, take the time to do the KYC and verification for the exchange you are using. Things that go up usually come down, and I can't think of much worse than watching your BTC slowly loose value because you were only able to withdraw one per 24 hour period.
Proof of Stake and Delegated Proof of Stake blockchains see a lot of users tying up their tokens. While this is generally a good thing, it is important to keep some of those tokens liquid. With unstaking periods being anywhere from a couple hours to a couple of months, you don't want to be waiting around to access your tokens while the market starts to correct after a big jump.
Finally, "run from regrets". My brother in law told me that a long time ago and it more than fits with crypto investing. I'd much rather feel bad that I moved my funds sooner than I should have and only took a moderate profit than waiting too long and missing my chance to make any.
I think it is important to do the calculations and know what you "bought-in" at. For example, I have some LTC that I bought at right around $77. Right now it is closer to $45, but if it ever makes its way back up to $100, I will not have any bad feelings about selling.
Knowing when to say "when" is a skill that will serve you well in many aspects of your life!
I hope this post gets some gears turning in your head and helps you come up with a personal plan that works for you. Everyone's plan is going to be a little different based on their circumstance and needs.
When the next bull run happens I want to be reading posts about lambos, not posts about how people missed out because they weren't prepared.
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Thank you soo much for sharing this. I actually had to learn this the hard way during the bitcoin drop and I could only salvage little or nothing. Since then caution and seeking appropriate information has been my watch word.
exit strategy, I myself personally created a lot of exit strategy.
Care to share any of it? :)
My exit plan for my last job exist the moment I joined.
I tell myself how much I needed to save.
While working, I secure support from many sides by helping them in a certain things. when I am not working, I can still get help should something go wrong during my job search.
Continue to do my youtube video to earn income to diversify my income.
Having all this contingency plan helps me buy some time while I am searching for job.
Sounds like a smart plan!
Solid advice about having an exit strategy.
One sits with too much tied up in one place, before you know it the swings/slides could make you wait a long time before you see returns.
Always have some liquid to fall back on in a hurry is another excellent tip!
Thank you! I have been thinking about this a lot lately with more and more "experts" predicting a bull run.
Would you like to buy some Crypto-Kitties? I have 13 of them that I'd sell pretty reasonably...
Which should be enough proof that you (I/we) should have an exit strategy in place.
I have some liquid Hive (reminds me, I have some liquid steem that needs attention, I've been on vacation) but my exit strategy involves a power down for 2 weeks so that I could sell up to 10%. I don't think that will happen, but it's my strategy or lack of.
No, I missed the whole crypto kitties thing and I don't feel too bad about that. Power down over at Steem is much more dump friendly now. I am still milking some curation rewards over there. It sounds like you have a solid plan!
I only hold crypto on one wallet and my strategy is to sell 10% of its value every six months. Yesterday I sold the first 10%. Next selling wave will be by December-January, depending on the price performance. I don't want to sell too soon but neither too late. I don't know either how the market will perform over the next years hence I dollar cost average. Overall not too bullish but not too bearish either right now.
Very interesting! I was a late adopter, so I would take a huge loss if I started selling anything right now. Besides the stuff I earned through blogging of course!