Crypto How do you approach crypto investing?

Hi all

I am still trying to work out whether it is better to take profits during the bull run or would it be better to invest long term (eg 5-10 years).

I am leaning towards long term investing (and note CGT implications of short term profits) but understand this means we will probably have to have a time where the portfolio value declines. What do other people do?

 

I have a tiny amount, just a few thousand (for which I paid like $30 for lol) but I'm not going to bother timing the market. I'll leave it there. I'm not going to bother timing the market on such a small mount. It barely even pays a few bills lol.

 

Yes, the amount we have invested is also relatively small so I think it is probably best to leave it.

 

Everyone would love to be able to repeatedly take profits when the prices are high and buy again when it's low, that's basically what trading is about.
But being able to time the market is extremely hard and most traders end up with less than they started with (or get completely rekt).
There is generally no harm in taking profits along the way, as long as they don't turn into regrets later on if the prices keep on going.

What view you take on the whole thing will determine your timeframe I suppose.
With property people take a multi years (decades?) approach, but with crypto the view is extremely short term generally. Sure there is a lot more volatility, but when stepping back, the picture is pretty clear with regards to which way the trend is going.

This is not advice in any way.

 

Buy and hold, harder than it sounds.

 

depends on the crypto...take profit on the shitcoins that won't be around next cycle. holding the large caps though is fine if you can handle the volatility

 

For simplicity and entertainment:

BTC is CBA and ETH is WBC/ANZ/NAB, a few other coins in the Top 25 are like ASX200. Everything else is a penny stock.

The big gains and bigger losses are in the penny stock, one day wonders that go up for no good reason and die down. The ASX200 type coins which has a bit of a balance between risk and return - still we are talking multiple times the capital in ROI.

BTC/ETH - currently the lowest risk (relatively speaking of course) but doesn't mean you won't loose money if you buy at the peak or get carried away with FOMO - no different to any other stock.

End of the day, if you replace the world crypto with gambling and put a cap on how you much you want to gamble (I mean invest) it'll be a whole lot of fun seeing your money go up and up, just have to make sure you get out before it goes down and down. Happy gambling.

 

Totally this! Unless of course you buy a little regularly and hold over 10 years. All the volatility tends to even out over this period. It's still risky AF. But way, way less crazy than dipping your toes in (gambling!) for a quick buck.

Whatever you do, NEVER put in what you can't afford to lose.

I'd also think twice about going in right about now. History hasn't been kind to anyone who piled in right after the price rocketed up.

 

This cycle, I started investing in mid last year. Made 6x so far and pulled my capital out already so playing with "winnings" so to speak so no trouble there.

At what point do I consider that winnings as my capital? I don't know but I will see this through. Will start unloading later in the year when everyone starts jumping in en masse.

 

There was a recent flash crash, prices were down at least 20% across the board - not a terrible time to buy but as always buyer beware.

 

3 years ago I watched it go all the way up and all the way down again, so this time am taking a few profits instead.

 

It all depends on your time horizon really.
Anyone who has been in the space for a few years is in massive profit, even if the entire market halves tomorrow.

But definitely very volatile.
Not sure I would consider it more risky than investing in the next 10 baggers penny stocks, but that’s something for everyone to decide.

Like with all volatile investments though, one should definitely not put in more than they are prepared to loose, especially in this space where everything is still new and constantly evolving.

That being said it seems the best approach overtime has been to just hodl Bitcoin, just like you would buy a house with a long term view.

In @Casteller example above, would you have simply bought Bitcoin in the last cycle and held, you would be in massive profits.

Alt coins come and go, just like penny stocks the odds of you finding the one that’ll settle in the top coins over the long term are tiny. Not impossible, but tiny.
Over time once alt coins go up, it is very common for bag holders to cash out their bags and pivot into Bitcoin.
You just have to keep your eyes on those alts and do some serious research on the projets if that is the way you want to approach it, and know the odds of it outperforming Bitcoin over the long term are quite small.
Eth is in a different category IMO as the leading smart contract platform, which is a different thing to Bitcoin entirely.

Anyway, don’t FOMO, don’t take on debt, don’t bet the house, if you dabble in it, keep it a small allocation would be what I would do.

This is not financial advice in any way.

 

If they bought at the peak they had to wait 3 years to see 150% profit, not huge.
But the people who sold in the last cycle and bought back anywhere in the following 3 years did much, much better, 1000% profit. Most people in the last cycle saw their "profits" evaporate because they were too greedy to take them, and had to wait 3 years to see them again. The crypto market as a whole declined 88% in the year following the last cycle.

 

Well if you bought at the absolute peak, obviously not the best, but you would still have tripled your money with where Bitcoin was last week.
But that is cherry picking dates here.

 

Please watch this and decide for yourself

 

I'm both a trader and investor so I have two Buckets.

One bucket for active trading and the other for long term Investing. For most people bucket for long term investing is the way to go.

The key is DON'T PUT MORE THAN YOU CAN AFFORD TO LOSE.

Why not treat it as a way of saving? xxx $$ here, xxx $$ there each week/fortnightly with the idea that your time Horizon is for long term ( Retirement money maybe ) Most people call this strategy DOLLAR COST AVERAGING. I did this myself since 2016, so far so good. When do you cash out you ask? Well whenever you feel like buying something, going for a holiday maybe, buying a nice car, watch, etc. Same thing you would if you were saving money in a Bank ( who does that nowadays ) so I guess same thing when you sell a little of your asset of choice ( stocks, bonds, collectibles, real estate, etc. )

PS: I'm just a stranger on the internet so take my word with a grain of salt.

 

Thanks for your views everyone, much appreciated.

 

I am very pleased with our crypto holdings! They have gone well this year and I think I would feel quite down if they now dropped 80 percent and we lost the gains for a few years. I am therefore starting to take some profits at intermittent intervals (despite having to pay full CGT as we have held for less than a year). I am thinking to mostly sell the small ones but continue to hold a bit of BTC, ETH and ADA for the longer term. Assuming it does crash next year, I am then thinking of buying at that time. Will see how it goes...

 

Treat it like a portfolio allocation exercise like any other asset given the risk/reward.

Do you want to put 0.1%, 1%, 10%, 100% or zero in?

 

I'm relatively new to crypto. At this stage, thinking to just buy small amounts and taking more of a buy & hold strategy.
How is Swtftx as a platform? Or any other recommendations on which platform to use? Thanks!