During this upcoming cryptocurrency bull run, when the price starts going parabolic and vertical, what is your cash out plan? This is the follow-up video with all the most common questions answered, as well as some new ideas put forth on the best exit strategy. Do you simply want to hold (hodl) or do you want to try to strategically increase your portfolio holdings by cashing out and re-entering the market at the right times?
• PREVIOUS VIDEO (PART 1): https://youtu.be/dq6LtKWb77k
• STABLECOIN REPORT: https://medium.com/blockdata/stablecoin-report-blockdata-a5ad83525333
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Q: Why not cash out into fiat instead of using stable coins?
A: The reason for not cashing out into fiat is because bank accounts can be frozen. Decentralized stablecoins cannot. A small percentage into fiat is ok. When dealing with larger dollar amounts, it may raise flags with banks who want “proof of where one’s funds came from”. I don’t owe anyone any proof over my money. Nor do I owe anyone the ability, however remote, to hold my money from me. This may be more of a concern with larger dollar amounts.
It is a must to do one's due diligence when selecting which stable coins to use. Picking a decentralized stablecoin that is not susceptible to control by an Exchange is a must imo. For example, DAI can be stored on a Ledger Nano S.
Also, if USD goes south, or if a stable coin fails, that’s why I don’t trade more than 1/2 of my crypto portfolio, ever. Having a *variety* of stablecoins mitigates against any single stablecoin's failure.
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Q: 2nd most popular question: If your stablecoins are all USD pegged like the ones you showed, won't the end of the dollar also put your stablecoin value in jeopardy?
A: USD probably will inflate (as it does) during the year or two in holding it in stable coins. But that inflation, in my estimation, is going to be way less than the price drop of cryptos during a crypto market correction following a steep bull run.
If the US dollar was in a hyperinflationary zone, then I'd be concerned and I would not do this plan. I don't see it there yet. Therefore, the loss from US inflation is less than the loss incurred during a sharp crypto market correction.
- - - on gold, silver, real estate - - -
I think gold and silver could also serve as a hedge against the inevitable crypto correction following this bull run.
I plan to put up to 1/4 of what I sell into gold temporarily as well. This will also hedge against fiat inflation. Still deciding on best site. Right now looking at Vaultoro.com as davincij15 mentioned that is what he is using. If you guys have a good experience with any other crypto-to-gold trading sites, please share them in the comments below.
For me it seems best to spread the eggs out into various places: stable coins, a little fiat, gold, silver, maybe even some real estate. Gold and silver could be a good one!
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Important note 1: Don’t store stablecoins on an exchange. You can store DAI on a ledger Nano S because it’s an Ethereum ERC-20 token.
Important note 2: Make sure to set aside enough money to pay for the taxes when you convert your crypto to anything else including another crypto, stable coins, Fiat. Because all of these are considered taxable events. This is why I moved to Puerto Rico.
Important note 3: I noticed a common misconception that people believe using stablecoins is a way to avoid taxes. Not really. Converting crypto to stablecoins is considered a taxable event in the exact same manner as converting crypto to fiat or crypto to another crypto. That's why I moved to Puerto Rico to take advantage of Act 22 for 0% on capital gains made while a resident here. I'm not a lawyer. Seek professional tax guidance on this.
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Q: 3rd most popular question: What happens if the market only goes 45x... you gonna still sell nothing?
A: It could stop at 45x. I have to draw the line somewhere or it becomes a continual game of undercutting myself. That's why making a good estimation of where the market will end up could perhaps be the most important part to this entire plan. See my last video "$218,000 bitcoin" for my logic on where it will end up. I'm going with that.
Also, I may increase my selling proportionately as we go higher. This weights the sales with higher dollar values. So I could sell 1-5% when we hit 40x. then 5-10% when we hit 50x, then 15%-20% when we hit 60x, etc.
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Disclaimer: The views expressed in this video are strictly my own and are not to be construed as financial advice. Do not buy, sell or otherwise trade cryptocurrency based on the content of this video. I am merely sharing what I have done and what I would do in various situations as an educational tool only.
#cryptocurrency #tokens #coins #bitcoin #btc #blockchain #bullrun
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