Bitcoin has proven to be a volatile investment for many amateurs and even professional investors. Anyone who bought into Bitcoin in the early days will still be sitting pretty, but those who invested in Bitcoin when it was selling for around $50k for one BTC, will have lost a lot of money. The recent collapse of the FTX exchange has added further shockwaves to the Bitcoin market, with experts predicting significant price falls. If you still have a Bitcoin investment, you might be wondering if now is a good time to cash out, before the price of BTC falls even further.
Here are some key signs it is time to sell your crypto investment.
The Price of Your Crypto Has Risen
Right now, it isn’t a good time to sell Bitcoin. The price of BTC is still falling and will likely sink by as much as 25% before it rallies. Unless you need the money right now, it would be better to wait until the cryptocurrency market has recovered, which it likely will in the long term.
Generally speaking, the best time to sell some or all of a crypto investment is when the price you originally paid has at least doubled or even tripled. For example, if you sell when the price of BTC has risen by a considerable amount, you will realize a decent profit.
Use the OKX crypto converter to discover how much your investment is worth against fiat currency.
You’ve Found a Better Investment
New cryptocurrencies are being launched all the time. While Bitcoin is the best-known, don’t discount new cryptocurrencies like RobotEra (TARO) and Dash 2 Trade (D2T). Getting in on a new crypto at the beginning could lead to significant profits, which makes cashing out your current investment worthwhile.
It’s not guaranteed, however, so weigh up the pros and cons before you do decide to cash out in favor of a different investment coin or asset.
You Have Lost Faith in the Crypto Market
Plenty of inexperienced investors jumped on the Bitcoin bandwagon while it was surging ahead, but many of those people have since seen their investments dwindle and profits fade.
Hanging on to an investment that no longer performs is foolish. Don’t be that person who clings on in the belief that their investment will recover. If the community that supports the crypto you bought into has faded away and there doesn’t seem to be much happening on the development side, it is probably a sign you should cash out sooner rather than later.
What To Consider Before Cashing Out
Don’t make a rash decision and cash out your investment immediately. Look at the market and decide whether any price falls are temporary or part of a longer-term trend. It might be better to cash out a percentage of your investment and keep the remainder, in the hope that it recovers.
Finally, check your tax liability before liquidating a crypto investment, so you don’t have any nasty surprises when you file your tax return.
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