I was recently a guest on Mr. M’s podcast, where the host, Maurizio (Mr. M), and I discussed many of the realities of investing in bitcoin that are often not discussed with enough nuance.
For context, Maurizio invited me to the show because he wanted to discuss a Take I wrote last week titled “Don’t Buy The Bitcoin Dip,” in which I shared that we have already been in a bitcoin bull market for over two years and this is probably not the best time to make sizable bitcoin purchases. (Please note that, in the article, I did not encourage anyone to sell their bitcoin, nor did I suggest stopping dollar-cost averaging in the asset.)
We discussed the article and also touched on some other dynamics related to investing in bitcoin that are often not mentioned. So, I thought I’d share some takeaways from the conversation here as a teaser for the episode.
When you invest in bitcoin you can:
- Sell some if you need cash, and it’s best to do so while the price of bitcoin is high
- Don’t go all in on Bitcoin; Having a cash reserve can be psychologically beneficial, as bitcoin is a volatile asset
- Consider timing when making larger bitcoin purchases; The price of bitcoin goes through boom and bust cycles and is best bought during bear markets
I share these points because, often, louder voices in the Bitcoin space convey messages like “Buy the dip” or “Never sell!” (my favorite example of this is the episode of What Bitcoin Did titled “Buy the Fucking Dip” that was released near the height of the 2021 bull market), pushing those who are new to the space or who could benefit from selling or from spending a few bitcoins during a bull market to avoid doing so.
If I hadn’t sold some bitcoin during the latter part of the previous bull run, I wouldn’t have had the liquidity that made it easier for me to quit my previous job, which was making me unhappy, so I could have some of financial scope room while I was looking for work in the Bitcoin space. And here I am now, writing articles for Bitcoin Magazine to make a living Why I sold some of my bitcoins.
So, please understand that Bitcoin is a tool that can be used in many different ways. Examine your life circumstances and think for yourself when it comes to how to use your bitcoin. Don’t just listen to devoted HODLers who may make you feel less of a Bitcoiner for doing what’s best for you.
This article is a Take. The opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.