How To SELL Your Cryptocurrency FAST | Bitcoin | Litecoin | Altcoins
As Bitcoin hit all time highs this week, whilst also taking a well needed breather, I decided to take the plunge and realise some profits.
I know, you’re sitting there shouting at me “HODL, what happened to HODL!?” Well, as much as I am HODL’ing the vast majority of my crypto — it’s necessary to realise a portion of your gains from time to time. Having an all green Blockfolio portfolio only goes so far in the still nascent crypto market.
The key aspect that you need to take away from my going against the HODL philosophy is:
EXIT STRATEGY — WHAT IS YOUR EXIT STRATEGY!?
I’m about to give you THE tip to end ALL tips, but first…
I sold BTC based on a trading strategy, taking the emotion out of the decision making. Trading psychology is an important aspect of investing/trading that is often overlooked in the quest for the golden rule of trading — Do not lose money.
My thought process was twofold —
- Realising a proportion of my gains
- Establishing knowledge of the exit process from FIAT to Crypto
By going all the way from crypto to FIAT (money that we use on a daily basis), I learned the following:
Learnings
Timing The Top
Selling BTC when it’s still on a trajectory to the moon is a tough call. There is a cognitive bias towards holding off for just another $100. Timing the top is incredibly difficult and can lead to lost profits.
Stick to your trading strategy, remove the emotion and lock in those profits!
Transaction Time and Fees
The motions of transferring crypto from one wallet to another to capture a specific price level aren’t as smooth as you may imagine. Transaction processing times meant I had a significant wait for the transaction to be confirmed going from wallet to exchange. Generally it takes ~6 confirmations before the transaction is confirmed.
The reason for this, is because the more confirmations a transaction has, the harder it is to manipulate. As such, exchanges and wallets generally wait for ~6 transaction confirmations before accepting transaction finality.
This took 50 mins.
Relatively speaking as you may have found already, that is HOURS in crypto world, as the price volatility is massive — especially in a trending market. For those 50 mins, I was glued to the price action, anxiously waiting to hit the sell button as soon as it was confirmed.
So given I was attempting to remove the emotion out of my trade decision — there was still a HUGE amount of emotion there.
Here’s where the tip of ALL tips comes in…
We often sell our BTC or Altcoins and wait for the transfer from wallet or exchange to the exchange of choice which allows withdrawals to FIAT.
This a slow way to transfer your crypto and exchange to FIAT.
However, I have discovered a faster way to transfer and withdraw your crypto (and not just Bitcoin) thanks to trawling the infinite knowledge of Reddit.
Currently certain cryptocurrencies are limited in the number of transactions it can process at any given time (not helped by the likes of CryptoKitties) and therefore we have seen an increase in fees. In this brave new world, anything that expedites the process of fund extraction from your crypto, whilst reducing fees paid has to be pounced on (pun intended)!
THE Tip of ALL Tips
The trick is to first convert your crypto (Bitcoin, Ether, etc.) to Litecoin, or another coin that has faster transaction times, and lower fees.
Step 1
You can carry this out simply by using Shapeshift, Changelly or another service that exchanges crypto without the need to transfer them outside of your wallet. If your crypto is already in an exchange, you can skip to Step 2.
Step 2
Sell your crypto for Litecoin. Litecoin has a number of awesome properties that allow us to pull this off:
- Currently has very fast transaction times
- Currently has very low transaction fees
- Exchanged and withdrawn to FIAT through a large number of exchanges (e.g. Coinbase/GDAX, Kraken…)
Step 3
Withdraw your FIAT funds to your bank account as usual.
As you can see, this completely removes the requirement to wait for your crypto to be transferred and/or confirmed by the slower coins.
In this brave new world, anything that expedites the process of fund extraction from your crypto, whilst reducing fees paid has to be pounced on
This process also works in reverse if you need to purchase Bitcoin and want to transfer it to your own, or someone else’s wallet outside of an exchange. Use Litecoin as the expediting coin. You can of course use another coin that has fast transaction times, and low fees for the same process as well, however, Litecoin’s advantage over them is that it’s accepted/traded more widely.
Example
Moving BTC out of Bittrex to Coinbase to then withdraw to FIAT would a) take ages, and b) cost a whole lot more — as shown below.
That’s a saving of $14.08 USD or nearly 90% of the BTC fee!
Positive Price Action
Unfortunately, I hadn’t discovered this at the time, however, the positive thing about the wait is that BTC kept increasing, therefore I more than covered the transaction (mining) fee.
Realising Profits
Once the sell was confirmed, I then forced myself to withdraw it from Coinbase. The temptation to plough it back into BTC was massive, but the point of this exercise was to realise a small percentage of profits.
Sell it > Withdraw it > Stick to your plan!
Verifying The Point of Exit
When originally funding my Coinbase account, I thought I had verified my bank account — apparently not. I’d urge anyone in the crypto game, to verify at least one outlet (exchange) where you know 100% that you’re good to withdraw your funds — with zero delay. I had to send another 6 EUR from Revolut to Coinbase from a specific account to then verify my account.
Takeaway
You may think “ah I don’t have much money in crypto” — but things can blow up.
Given the degree of uncertainty in crypto, it’s HUGELY important to have a level of certainty that you can extract funds as and when you wish to. Give the above trick a go, or at least go through the process of selling a small amount of crypto and withdrawing it to FIAT.
Have you been in the same boat? Have you sold crypto and withdrawn it? Do you have an exit strategy? Leave a comment below.
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