Just wondering as I'd have thought a "peak" is only evident in retrospect?
Then, one or twice a year, you an reallocate assets as they drift away from the ratio. Doing it too often is detrimental, so my guess is once a year is "enough", and may be keep an eye on any fluctuations and if it grows bigger than some threshold, you do a second rebalance.
Let's say in 2021, crypto had a huge bull run, and went from just being 10% of your allocation to something close to 20%. It makes a lot of sense then, to sell the 10%, and rebalance back into the other assets you hold.
Progressive selling on the way up is emotionally very hard to do, as it feels like you're losing money whilst actually being in profit. It's tempting to fully ride the top. Don't.
Next, when the inevitable crash comes, you're uniquely positioned to buy in heavily as you have the dry powder to do so. This too is emotionally hard as everybody is fearful, "blood in the streets". Here too you can progressively buy in rather than try and predict the bottom.
This strategy only works for things that bounce back, which is not true for almost every altcoin or shitcoin.
You can also take permanent profits. Once I made my first significant profit, I took out my initial investment so that effectively I'm in crypto only with profits. I could lose it all and whilst that wouldn't make me happy, it wouldn't truly affect me either.
At the end the only experience I got is that I’m still a bad trader, and I won’t do it :)
> Just an example last year I had a target of $150k when it was at $50k, and also (like most people) I got a BTC based loan (it made sense for tax purposes as well).
That doesn't sound like a good idea in the middle of a bull run and everyone being in profit on Bitcoin when it was at $50K last year or even $69K. I have a different strategy - taking profits and taking advantage of the hype.
It's better to get in when the market crashes so that you can buy it significantly lower, (Like say <$10K) and sell some of it during the height of the euphoria, than it is to enter when everything is going up and end up bag-holding and waiting months, or years in an unrealised loss for it to go back up again.
Hence being against anyone jumping in at >$60K last year [0] and warning another person about DOGE going all the way up and bag-holding it at $0.6; thinking that it will go to $1 by August. [0]
Anyways, Good luck with your strategy.
The people who bought in at around >$40K and higher just did that and are now bag-holding in drawdown.
> PP got a loan at 50 which is a bearish trade, halfway to shorting.
Well no wonder they received multiple margin calls when the smart traders were taking profits or shorting from >$60K with him ending up on the wrong side of the trade or entering at higher prices and holding into unrealised losses.
Financial instrument trading is always gambling. Imvesting is what it's not.
I also sold most my investments in January because I wanted to buy a house. Moral of the story: be a lucky bastard like me
I believe crypto doesn't need to "go to the moon" to succeed. If bitcoin hit a stable price of 1k it still works. If I were to make another play in the crypto space I'd probably do something stupid like buy 32 eth & stake it in eth 2.0
Or 4.75% running it yourself, & figuring out how to run a validator seems more fun than handing coinbase your funds. I strongly disagree with people having their crypto held by third parties
Was just mentioning it in case you (or someone else on HN) weren't aware it was an option, but clearly you are.
Either way, you personally benefit from belief in Bitcoin and crypto being generally positive, which has implications for your objectivity even if well meaning.