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Should I Sell My Bitcoin? Here's How to Decide.DownloadSubscribe

Should I Sell My Bitcoin? Here's How to Decide.

Should I sell my Bitcoin today?

Should I sell my Bitcoin now?

When should I sell my Bitcoin??

Any investor will tell you; holding a volatile asset like Bitcoin is no walk in the woods. In fact, it’s damn tough and it takes a lot of resolve and belief to not sell even when it seems like everyone else is dumping their holdings.  

The problem with a HODLer’s (holder’s) mindset though is that once a new bull market starts it’s not always obvious when you should sell your Bitcoin. During the bear market you only have one job: hold on and maybe buy some more as the price drops. But how to tell when the time is right to sell?

In this article, we’ll try to answer that question. We’ll also point you in the direction of several successful Bitcoin investors who can provide guidance on how to successfully navigate a bull market.

In this article

    Bitcoin Price

    If you’re going to sell you have to know what’s going on in the markets and there’s no better way to keep track of the Bitcoin price than the Exodus charts.

    The Exodus charts are advertisement-free and easy to read.

    Once you get an idea of prices, here's how to decide when to sell:


    When Should I Sell My Bitcoins? The Stock to Flow Model Might Provide an Answer

    Determining the fair value of Bitcoin is hard. One methodology that some people subscribe to is to say Bitcoin is worth either zero or one. Typically when they say this they mean that Bitcoin will either become worthless or it will be worth $1,000,000 (or more).

    That’s a beautiful thought, however, it’s important to note that such a valuation is unlikely to occur during this bull market cycle. Going from a previous all time high of $20,000 to $1,000,000 is too extreme even for Bitcoin in the short term. So what is Bitcoin’s fair value in the next couple of years?  

    About a year ago Plan B, a popular crypto analyst, released his Stock to Flow (S2F) model and this seems to be one of the best models that we’ve seen so far to determine a fair price for Bitcoin.

    should i sell my bitcoin - stock to flow model might have an answer
    Plan B's Stock to Flow model has been very accurate thus far in predicting Bitcoin's price. Image credit: Plan B

    To really understand Stock to Flow you can read Plan B’s original post. However, we’ll summarize that post here.

    Plan B asserts that the value of an asset can be determined by how much is being produced every year as compared to existing stores. For example, gold is valuable because so little gold is produced compared to existing stock. Silver is less valuable because more silver is mined every year relative to existing stock.

    As of the May 2020 halving, Bitcoin now has about the same Stock to Flow as gold. This would indicate that Bitcoin should be worth about the same as gold (in terms of market capitalization, or gold/BTC price multiplied by number of circulating gold/BTC).

    That may happen eventually, but in the short term, Plan B has projected that Bitcoin should be worth $288,000 by 2024.

    That’s an awfully high number but so far Plan B’s models have proven surprisingly accurate. Fingers crossed his prediction comes true!

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    A Few Other Price Predictions

    To figure out when to sell we can also look at some price predictions from other prominent Bitcoin investors.

    The well known market analyst and investor Preston Pysh believes that Bitcoin’s ultimate price will be anywhere between $100,000 and $300,000 during the next cycle.

    Raoul Pal, macro investor and founder of Real Vision, believes that Bitcoin could reach as high as $1,000,000 during the next cycle. Although admittedly he also says a high of about $200,000 is entirely reasonable.

    Bob Loukas, who has been investing and trading for more than twenty years, has called for a $200,000 Bitcoin during the next cycle. He believes that this could come somewhere around late 2021 or early 2022.

    There are lots more market predictions out there and a quick Google search will tell you all that you need to know. In general, there are very, very few people who believe that the next cycle top will be anything less than $100,000.

    The likelihood seems to be either that Bitcoin goes to $0 due to some catastrophic failure, or it goes to $100,000 and possibly well beyond.


    Bitcoin News

    Besides being an awesome wallet, Exodus is also a great place to get your Bitcoin news. Exodus aggregates all of the latest news so that you can check it from one place instead of checking a bunch of different websites.

    One suggestion though; don’t binge on too much news. There is always some new “trader” who has a special technical analysis (TA) method that shows Bitcoin is going down or up 40% in the next week. There’s also the apocalypse news, that Bitcoin is doomed and you should sell now!

    Seen from a longer time frame so much of this “news” is meaningless. The best way to consume Bitcoin news is to look for important stories regarding fundamentals. That could be changes in hash rate, new regulations, new mining operations coming online, reports from institutional investors, etc. This is the good stuff.


    How Do I Sell My Bitcoin?

    Lots of Bitcoin traders like to use semi-regulated or unregulated exchanges like Binance and BitMEX. While these are usually OK for exchanging coins or taking leveraged positions, when it’s time to sell your Bitcoin you should really consider using a regulated exchange.

    A regulated exchange is accountable to the proper regulators and will be much less likely to do something wrong with your banking information. Exchanges like Coinbase and Kraken are both good as they have a long history of providing good service to their traders.

    With either of these exchanges, you can sell your Bitcoin into USD or another government currency and then transfer it to your bank account.


    When to Sell Your Bitcoin: Other Considerations

    Apart from selling based on price, you can also sell based on how much of your net worth is in Bitcoin. If BTC prices appreciate rapidly such that Bitcoin represents a vast majority of your net wealth, you may wish to consider selling. Alternatively, here is another approach used by many top investors.

    After an asset appreciates an investor can sell enough to cover the cost of their initial investment plus taxes. That way everything remaining in the market is pure profit and even if the asset drops in price the next day, the investor has already pulled out their initial investment so they have much less to lose.


    What to Do if You Aren’t Ready to Sell

    Throughout the years, many people have lost their valuable BTC due to poor safekeeping practices. One example is storing your BTC on an exchange and as everyone knows, exchanges are notorious for getting hacked or otherwise losing user funds.

    That’s why it’s important to store your Bitcoin in your own wallet, and not in someone else’s - at least until you’re ready to sell.

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    This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.

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