Did you know that over 46 million Americans own Bitcoin? With many people embracing Bitcoin and driving up the price, you might ask yourself, “Should I sell my Bitcoin?”
It’s natural for investors to take profits after recording incredible gains. These factors will help you decide if you should sell Bitcoin.
What Is Your Motivation?
Investors sell crypto for many reasons, some based on fear with others based on logic.
Some investors end up selling Bitcoin to diversify their portfolios. Investors with heavy concentrations in Bitcoin may feel nervous about the prospects of a crash.
Other investors sell Bitcoin because they achieved their target return. These investors create exit plans before starting new positions. Once they meet the parameters, investors sell Bitcoin.
Do You Have Upcoming Bills?
We all have bills to pay, but some people pull into their portfolios for those monthly payments. Selling some of your Bitcoin to cover the bills makes sense.
Selling now leaves you less exposed to a short-term correction. When the bills come around, you will have to sell more Bitcoin to cover expenses.
Keeping some of your Bitcoin holdings intact allows you to still benefit from long-term appreciation.
Is Another Investment Opportunity More Compelling?
Bitcoin was the highest returning asset of the decade, producing an annualized return of 230%. While those generational returns suggest Bitcoin is a superb investment, the cryptocurrency also carries a market cap of over $1 trillion.
Some investors sell Bitcoin to accumulate funds for an opportunity in the stock market or another cryptocurrency. Every investor’s goal is to maximize their return. Some investors consider selling Bitcoin as part of that objective.
Are You Anxious About Your Bitcoin Position?
Investing’s uncertainties can lead to anxiety. We can only guess how Bitcoin’s price will change in the future. While Bitcoin can continue growing, it can also collapse.
Bitcoin is a risky asset, and not everyone is ready to incur the risk.
If your Bitcoin holdings make you feel anxious, consider trimming down the position. Struggling to sleep at night because of Bitcoin price movements is a telltale sign that you should cut your position.
Diversifying your holdings can alleviate the stress and help generate higher returns.
Why Did You Buy Bitcoin?
Before asking yourself, “Should I sell Bitcoin?” consider why you bought the cryptocurrency. If your investment thesis has changed, it may make sense to sell Bitcoin.
Some investors buy assets when they have small market caps. They proceed to sell some of those assets when the market caps rise substantially. Then, they put the extra funds into investments with small market caps, continuing the cycle.
Remember why you decided to buy Bitcoin before you sell it.
Should I Sell My Bitcoin?
Each investor has preferences based on their portfolio allocation and projections for their investments. By reviewing your investments and criteria, you will reach a proper conclusion regarding your Bitcoin holdings.
Have you asked yourself “should I sell my Bitcoin?” or do you plan on riding it to the moon? Let us know in the comments below.
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