So When IS The Time To Sell? - Satoshi's Page Newsletters

In my previous newsletter, I talked about my friend’s request for advice to sell his Bitcoin, just as the price reached the prior all-time high of $20,000. I am happy to report that he was dissuaded from selling at the wrong moment. An awesome decision as it turns out, as the price of Bitcoin has continued to rocket to $29,000 in the last couple of weeks. Needless to say, my friend is pleased that he took my advice! 🙂

While happy that he has managed to preserve his wealth and increase it further, he did request my advice on when he SHOULD sell, and so this is the subject of this newsletter.

At the moment many view Bitcoin as a speculative asset and with speculative assets you can do very well if you time the market to buy at the right time and then sell at the right time. For the first 10 years of Bitcoin’s life, this has been its nature and speculators and traders of Bitcoin’s value have done very well if they were skilful in their analysis of the market and bought and sold at the perfect moments.

For the ordinary person, however, for whom trading is not a skill or profession. Trying to time the market like this is more likely to be as a result of luck rather than good judgment.

The danger of being successful in this way is that it can cause you to be over-confident and make decisions that aren’t necessarily good ones or in your best interests at a later date. In a worst-case scenario, such a decision could cause you to lose what you had previously gained as a result of earlier fortunate actions.

An analysis of the historic price cycle of Bitcoin shows that approximately every four years the price of Bitcoin has a speculative peak, typically 18 months following the prior halving. Before then entering a prolonged bear market for a number of years before the next halving and then repeating the cycle all over again. The way Bitcoin is programmed influences this and will continue to influence this in the future.

It is worth recognising though, that the whole point of Bitcoin is as a new form of money. It may not have developed to fulfil its destiny in that way just yet, but there are strong reasons why it may do in the future. If that were the case, if there were some kind of economic shock that caused the banks to fail, Bitcoins price trajectory could be catapulted higher very unexpectedly, as people may actually need Bitcoins for transactions to buy things.

So in the short term, if part of your portfolio is just for speculation, and everything else in the economy is just fine, October/November 2021 could be the time to sell, but if the financial system is imploding by then, there may be nothing to sell your Bitcoin for. Bitcoin, Gold or Silver could be the asset that everyone wants.

So be mindful of the price cycles, but most of all, understand what you are investing in…

Below I have attached an interview I did earlier in the year with Nick Dutton of the Entrepreneur Academy. He had recently read my book and had some questions on it. We discussed how Bitcoins are mined and other related matters. The interview is particularly useful for those who are quite new to Bitcoin, so feel free to share it with your friends if you think they will find it useful.

Until next time enthusiasts!

Victoria

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Interview with the Entrepreneur Academy

Bitcoin In A Time Of Covid