Abstract
How about considering the "sell to buy more strategy?"
This is just a common strategy where you have to sell your bitcoin bit by bit during the peak of every bull market. From history, the peak bull market usually takes place the year after Bitcoin halved. So, what is implied by this strategy is to sell your formal hold during the bull market, then buy back during the bear market. The bear market will surely come after the bull market. Read further, and you will see the risk attached, the reason for the strategy, and how to go about it.
This strategy could be what another Bitcoiner might have practiced or is actually planning to do too, but I have been on this forum for a year and three months now, and I have not actually come across people talking relatively to this type of Bitcoin investment idea more often, probably because they think it's not worth it or because it's just nothing special.
If not many, I have seen at least two old members of this forum whose comments stated that they have been holding their bitcoin for more than 8–10 years now and have not sold any bitcoin from their holding. while, the price of bitcoin has been going up during every bull market and falling again during the bear market.
There is this phrase, buy the dip and hold, which refers to buying Bitcoin at a low price or at a price you (the investor) consider to be the bottom or cheap. After buying the dip, you must also be willing to hold the investment until a bull market occurs. (Buying the dip and holding it for a long time until it generates a huge profit is a profitable means of investing in Bitcoin.)
It's normal to invest in Bitcoin and hold it for as many years as you want, and while holding, you can still invest more using the DCA method, but the strategy I want to discuss is also simple and will be profitable if properly managed.
Bitcoin is known to have two seasons, which are the bear and bull seasons. The bull season usually starts in the year of the bitcoin halving or the year after the halving. Looking at the price history of Bitcoin, the price usually experiences a sharp fall in price after the bull market is over, and if perhaps you sold your Bitcoin during the bull market, you can hold your money (fiat) and wait for the bear market, which gives rise to a sharp fall in the Bitcoin price. Then you can buy more bitcoin, which is more than the number or fraction that you sold in the bull market.
A Little Recap of The 3 Circles of Bitcoin HalvingThe first Bitcoin halving happened in 2012; from price history, through out that year, Bitcoin traded just around the price range of $4.7–$16, but in 2013, the bull market kicked in and Bitcoin spiked above $1000 for the first time. The bear market started in 2014, as the price dropped to $320.19 at the close of the year.
The second halving took place in 2016, as the starting price for that year was $400+, but in 2017, the price spiked again, and for the first time, Bitcoin got to $19k+ around December of that year. In 2018, in the month of December, bitcoin dropped to about $3,100 (a bear market too).
Third halving of Bitcoin is what many people already knew about. After the halving took place in 2020, during 2021 the bull market started and Bitcoin got to $68k, but we all know the story after then till now.
Why do I think it's wise and can be profitable to apply Bitcoin's sell-to-buy-more strategy?- Because Bitcoin will definitely experience a bear market after every bull market.
- Because if you manage the strategy well, you will increase your holding.
- Because Bitcoin is a volatile asset, the price must definitely swing up and down.
- Because the three experienced Bitcoin halving has proven that the bear and bull markets are always certain.
Possible risk involved in this strategy.- Bitcoin is a volatile asset, and its predicted price is not usually very accurate.
- You will not accurately know what the ATH (peak) will be during the bull market.
- You will not know what the bottom price will be during a bear market.
- While holding a fiat and waiting for a bear market, the fiat could devalue. Secondly, fiat is a centralized currency; just hope nothing gets complicated on the smart contract while holding a huge sum of it in your wallet.
How to go about this strategy:Step 1= First, if you invest in Bitcoin, read about the price speculation of other people and price discussions on the forum, and also make your own assumptions about the price that you are expecting during the bull market.
Step 2= Set out 2–3 target prices for which you will like to sell your bitcoin, and when the bull market starts, sell in different fractions as you earlier set your target price(Note: don't sell all your bitcoin at once). After you have sold, patiently hold on to your fiat. While doing so, also be active in discussions relating to price, then make your prediction and also set a price target that you would love to buy.
Note: don't buy with all your fiat at once, DCA should be applied. Reason why you must not invest all fait at once is because price might still dip more.
If you sell high at the bull market and buy low at the bear market, you stand the chance to have increased your holding.
For example, if you bought 1 bitcoin for $16k in the month of January 2023 and you are still holding it now, you are already on profit. Keep holding. Perhaps you hold until the peak bull market starts this year or towards the end of next year, and maybe the price of bitcoin gets to $80k, $90k, and $100k+, respectively, and progressively. After selling your Bitcoin at those said price, your total asset becomes $100k or more, and you hold that money till 2026 when the bear market will start again (and perhaps the price drops to $60k, $50k, and $40k, respectively,) you will be able to buy more that the 1 Bitcoin you bought.
If you buy one bitcoin at $16k and sell it at $100k, then the price drops to $50k and you re-buy it again, spending $100k, that amount will buy you an extra one bitcoin, making it possible for you to own two bitcoins rather than the one you were holding. That's what I call "sell to buy more strategy. "
