Every market cycle (meaning when valuations of assets run and rally up and then correct downward) people think they can trade in and out of stocks, crypto’s or whatever asset, and make easy money! There is a tik tok culture of this over the last year now as well. This is a bold faced lie, it is not true! Bitcoin trading is incredibly hard to be successful at. 90% + of people are incapable of trading and ending up with more bitcoin. Most people lose their money, their bitcoin, and get hurt (aka rekt)
I wanted to break down a few key things you should know if you are new to bitcoin and considering beginning trading. I highly recommend against trading due to the risks and stories that I have heard of people losing it all!
To break down and recap:
- HODL – hold on for dear life. Bitcoiners who have been through the ringer of shitcoins and trading years ago who have learned the hard way know the game is to HODL! Do not trade in and out, you will lose. Ask anyone.
- Trading introduces risk – next to no one is great at timing the market (1-2% of people can) trading opens up vulnerability to leaving coins on exchanges, and stealing your time and energy from other things by trying to time the the market.
- Counter party risk – this is when you allow a 3rd party or someone outside of yourself to hold your bitcoin private keys. You should spend time learning about “Bitcoin Private Keys” and how to generate a “Wallet Seed Phrase” so that you can manage your own Keys and remove the counter party risk of an exchange.
- Counter party risk – this is when you allow a 3rd party or someone outside of yourself to hold your bitcoin private keys. You should spend time learning about “Bitcoin Private Keys” and how to generate a “Wallet Seed Phrase” so that you can manage your own Keys and remove the counter party risk of an exchange.
- Taxes are always due – if you are trading in and out of bitcoin, timing when to buy and sell is near impossible! You are going to have to beat the 25-40% ~ estimated taxes to end up with more bitcoin. This is hard as hell to do! Majority of OG’s and people who have invested for 4-10 years will tell you that you nearly ALWAYS end up with less Bitcoin if you are trading like a degenerate. (That friend on Facebook doesn’t know shit, especially if they are shilling doge, don’t trust them)
- Crypto Trader Tax Software – if you do sell and have to do taxes, I have personally used this software, CryptoTrader.tax for the last 3 years. Their support portal, and tax reports have been great and helped save me time and money when having my tax accountant do my taxes for me.