When should you think of holding or selling Bitcoin?


When we talk about the best and the most popular cryptocurrency in the digital market, Bitcoin tops the list. The craze for bitcoins among investors rose by leaps and bounds over the past years since 2017. Even though Bitcoin came into the frame through the hands of a pseudo personality named Satoshi Nakamoto back in 2009, it gained prominence only in 2016. It happened because the investors wanted to go beyond average stockholding and try something new in the second decade of the 21st century.

However, there is no need to worry about its functionality. Trading Bitcoin works in resemblance with stock trading, with minimal differences between the exchanges dealing with them. When you are into cryptocurrencies trading, you can buy Bitcoins, hold them and sell them off later for the desired profit margin with reliable platforms like Bitiq. Cryptocurrency has its language, but there is a funny part about its aspect of Holding. “HODL” is the term used for holding bitcoins. This was a typing mistake in place of “HOLD,” but since the investors found it amusing to use HODL, it remained the same. This term refers to an act of holding your bitcoin for a definite period and not selling it right away. Let us first understand the nature of Bitcoin Trading before we go deep into the concept of Holding Bitcoins.

Nature of Cryptocurrency Trading

The recent trend is towards promoting investments in Bitcoins and other cryptocurrencies. The sudden spike in demand is not unnatural considering the massive rise in its prices and can continue to grow owing to its great hype. Conversely, the sparkling attribute of Bitcoin comes with a lot of drawbacks considering the risk factors it has. Dealing with bitcoins and trading cryptocurrencies come with zero backing and nil guarantees. Very few businesses back cryptocurrencies nor do all prominent fiats or businesses guarantee its usage in their transactions. Therefore, the investments in Bitcoin can ultimately end up in nothing.

Its value depends on the hype in the market, demand among investors, and the way they are in use. Various cryptocurrencies find their way into the market but perish owing to their lower demand. Some of the digital currencies go downwards only to see a sudden rise all over again.

Depending on the volatile nature and such topsy-turvy, it is tough to determine when you should hold and sell it off. The volatile nature makes it difficult to crack.

Condition of Bitcoin concerning the bear case

Numerous factors play a crucial role in determining the prices of Bitcoins. They are as follows;

  • To begin with, we can highlight the aspect of hacking and theft of Bitcoin and other cryptocurrencies. Such instances of fraud happen from within the framework of bitcoins. It results in giving this arena a negative reputation for harboring such criminal activities. One of the prominent incidents occurred in 2019 when a few hackers ran away with Cryptocurrencies worth $500 million for the Japanese Crypto exchange named Coincheck.
  • The price of Bitcoin and other cryptocurrencies went down considerably after that incident. Experts felt that the unveiling of the future that Bitcoin holds and the inflow of money into the ecosystem of Cryptocurrencies would bow down the supposed threats.
  • Various economists and exchange regulators have projected Bitcoin under the light of criticism in various public forums. It restrained multiple governments around the world from bringing cryptocurrency under the legal banner.
  • Various online platforms that showed unmatched enthusiasm when Bitcoin started going at its peak are backing away. They vouch for imposing some restrictions or removing cryptocurrency from their transactional center altogether. Google, Facebook, Twitter, etc., are some of the software and social media giants that stopped posting advertisements concerning Bitcoins and stalled the use of Bitcoins in totality.
  • Some of the positive news brings some attached drawbacks along with it. When Bitcoin started gaining momentum, numerous investors complained about a high transaction fee. Later that transaction fee went down as a relief to the investors, but the volume of Bitcoins also witnessed a reduction. Experts estimated that a few technological solutions like adopting the use of a Lightning network along with a divided witness would resolve the deadlock. They predicted that these features would act as an antidote to Bitcoin’s problems due to their ability to add speed to the network. However, they are in use for only a small part of Bitcoin transactions.

Condition of Bitcoin concerning the bull case

When we talk about Bull cases of Bitcoin, the first thing is the virtue of patience. It indicates the previous price action of Bitcoin and other cryptocurrencies as a shred of evidence for the prices to rise again. The research head at Fundstrat Global Advisors, Thomas Lee, is one of the primary figures who recommend the investors keep their bitcoin on hold. He states that investing in traditional equity despises the timing of the market. He adds that an investor will witness a drop from 9.2% to 5.4% every year if he misses out on the ten best days of the financial years. Buying and holding equities will make up for the losses in those 10 precious days.

He reiterated the same logic when it came to Bitcoins. He stated that the annual returns from Bitcoin decrease by 25% if the investors miss out on the top 10 performing days of the year. Such 10 days refer to the time when the trading is at its peak. The current developments from the sides of various governments and the regulators imposed a thaw on the progression graph of Bitcoins, especially for the future. Added liquidity made its way into the ecosystem of Bitcoin through Bitcoin ETFs. The various technological developments within the mechanism of Bitcoin also indicate a bright future. Consequently, there is a rapid rise in nodes

When to sell your Bitcoins?

There are numerous instances where you should not hold but try to sell your cryptocurrency off. Some of them are;

Selling it off is the better option when a significant exchange drops your crypto coin.

Many cryptocurrencies find their valuation at a certain point due to the crypto exchanges. If you find one top crypto exchange not accepting your coin anymore, the chances of other crypto exchanges doing the same become high. There is no solid guarantee whether you will have an opportunity to sell it off in the future. Thus, the best option in this scenario is to sell your coin immediately so that you do not lose everything at once.

Your decisions on holding or selling depend a lot on your fear and your requirement for cash.

When you notice your cryptocurrency or Bitcoin prices dropping in the Crypto exchange, you might fear losing your hard-earned investments. Here, you have to formulate better strategies of investing, to ensure better success. Do not worry, as the chances of recovery are high in the future, owing to the highly volatile nature of Bitcoins.

This volatile characteristic of Bitcoins teaches many investors the game of patience, and very few indulge in panic sell. Always remember that selling your Bitcoin due to the panic of incurring a loss will make you lose out on a more significant profit in the future. Experienced investors sell some of their coins to meet their daily requirements while keeping some on hold to witness what the future holds.

Refrain from keeping all your coins on hold.

You know how Bitcoins are volatile to the developments in the crypto exchanges. There will be sudden spikes in their prices along with sudden falls. It makes Holding a lousy option. It would help if you thought of entering a trade cycle, where you hold some of the coins and sell some of them. It will help you maintain the correct balance throughout.

A Cryptocurrency that is finding itself out of a discussion among Investors shows signs of perishing.

When you discuss a cryptocurrency, always remember that it has no backing from any financial or governmental institutions other businesses and stock exchanges do. They function entirely on the hype that the investors create in the market and their demand for coins. Once you stop hearing the name of a particular cryptocurrency or, let’s say, Bitcoin itself, those are signs of some severe downfall. If they lose their value, the crypto exchanges will drop it. Therefore, you need to ensure the hype of Bitcoins always remains high so that your hopes remain afloat.

Sell it off when you find the Government imposing curbs.

The decentralized base of Bitcoin makes it a point of contention for many governments. They do not healthily take such currencies. Thus, numerous governments end up imposing restrictions or banning them altogether. If you smell something like it, sell it off as quickly as you can.

The above information will give you good insights into the selling and Holding of Bitcoins. You need to be attentive and speculative to the market developments to make the best decisions for your financial stability. Success in this regard will reach you at the epitome of return on investments.