... So, I think the most safe thing is to hodl until there is a need or a strong desire to pay for something useful with part of the stash like house, car, college for the kids, etc. And after the purchase, any proper opportunity to recover the stash should be used. If only all people were thinking like that, we could have avoided all these idiotic crashes. ...
in my opinion the most safe thing is to diversify when extreme fomo takes hold, when bitcoin looks historically overvalued, to sell maybe half, and purchase another kind of asset. If you can sell anywhere near the top, with a 70-85% drop coming afterwards, it's really foolish to hold. I've held through 2 big crashes, having bought in early 2013. It's much better to sell high than to sell 'when you want to pay for something'. Keep your portfolio diversified in different assets. There's no guarantee with any investment, including bitcoin. On this next anticipated runup, I hope to follow my own advice better.
It sounds like a perfect plan, except a little tiny itsy bitsy detail: Do you know what the top will be with an 100% certainty? Unless you have a time machine, I doubt it. In early 2017 the top was almost certain to be $1000, 3 months later $3000, then ... you know the drill. I got burned by that logic 5 times in 2017. If I was just holding, now after all crashes, I should have had 4 times more bitcoins than I am having now. In reality, if you sell with the hope of 80% gains, you will certainly sell at least 10% below the top, and if you got the luck to nail the momentary dip, you could get like 20-30% tops. And that, if you are extremely lucky! Besides, there is a risk leaving fiat on exchanges and 10-40% taxes if you withdraw to the bank account. So, I prefer to hodl in all the coming crashes. Bring it on, baby!
I hear you, the tax bite was a real psychological impediment for me to sell. But you have to overcome it. If you have looked at each run-up before the massive crash, you can see a kind of ridiculously rapid increase in price, that's the signal to be accelerating divestiture out of bitcoin! Don't worry about the taxes, you still will be way ahead if you sell when people are climbing all over each other to buy. You don't need to know the exact top. once you get to about 10-20 times the price of $20,000 you can't loose by selling off a significant percentage periodically as it continues up. There are some good log charts of bitcoin price going back 5-10 years, you can eyeball it and tell when it's a better time to sell and a better time to buy. It's not quick nor easy, but it's better than holding through these huge run-ups and crashes.
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