04 Jan A word of caution on selling your stash
It’s great to hear about folks who have sold their holdings for personal goals. That got me thinking about it from a decision mgmt perspective.
There are broadly 3 types of long-term HODLers: 1. Libertarians – Have a visceral distrust of the state apparatus 2. Early adopters – Found out about Bitcoin, researched and put a small can-afford-to-lose part of their networth in it 3. Randos – By a quirk of randomness of the universe, ended up buying BTC instead of something else and HODLed due to a collection of human biases (prominent being commitment consistency).
The decision making approach in all Randos is same. The guy holding XRP and other shitcoins also falls in this bucket. Their sense of standing by their decision is stronger than any rational logic in what they are holding.
If you’re a Rando, not a problem. We’re all Randos in some sphere of life. But it’s always better to know your limitations. So if you are considering selling your BTC, keep in mind: 1. There are only a few SODL worthy initiatives: – Buying a home – Paying off debt – Investing in education – Starting a business – Charity
You’re not a Midas because you stumbled onto BTC. Scrap any plans of doubling / trebling your gains via some shitcoin or other get rich quick schemes after selling your BTC. Regression to mean will ensure that you lose your gains and mental health.
If you believe in “normalizing” your portfolio which may be too crypto-heavy, do it by going into other hard assets like Gold/Property or simple index funds (with DCA). Do not try “stock-picking” or other get rich quick schemes (see pt 2).
If you think you’re not a Rando, imagine waking up tomorrow and seeing a 90% crash in BTC and your state of mind. If it didn’t bother you much, congrats. If you lost your shit, you’re a Rando.
Caveat: You might still be a lucky SoB and still do very well despite not caring about any of above, but randomness and regression to mean make that a very very very low probability outcome.