Bozzlife: Developing an Exit Strategy
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.
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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.
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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.
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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.
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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.
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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.
Sports Talk Social - @bozz.sports
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@eos.detroit BOID Team Leader
