Do you settle for less in return on your crypto investment?
Generally, the higher the IRR, the better. However, that’s not always the case. Many prefer to earn a high return in exchange for high risk and vice versa.
It’s an age-old question in crypto, should we sell or hold for long? Do we need to settle for less return or wait long enough for high payback?
I personally believe that it depends on our investment strategy, goal, and asset management, as well as many other unavoidable crypto environments.
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Should we settle our investment earlier/with less return?
I believe we can and we should if we think so and feel the necessity.
Money has a different meaning for all of us. If growing slowly doesn’t affect your total asset then you can liquidate your crypto earlier.
For example, many already sold their BTC holding in a recent $22k position. I too sold 20% of my holding but not everything because I will wait longer to get a good return. On the other hand, I didn’t want to lose more so I sold and settle for a 12% return.
I believe, waiting longer can give me as much as 25-30% in return.
You see, this all depends on how we manage our total assets. There’s nothing wrong to settle for less return if you feel the need. But keep in mind that this will remove your opportunity to take a big financial leap.
Low risk = low return.
If you find yourself short on cash, you might be tempted to cash in on some from your holding. Also, if you see a market crash you can panic sell.
I have done this too many times.
However, that means low return because we are agreeing with taking less risk. We do not have to “sell” out of everything of our holding to mitigate risks but we do so frequently. The cost of reinvestment, buying other coins and tokens, and withdrawal fees; everything minimizes our return.
What’s the middle ground?
I follow the 50-30-20% rule in investment and withdrawal.
I always try to hold 50% of my total asset/crypto, 30% in liquid form (emergency saving), and if necessary withdraw 20%.
This may not work for you if you are looking for high growth. But I’m settling for less for many years and find it low risks. I exchanged my opportunity of getting high payback with low-risk crypto trading.
It’s up to you what you want to follow.
If you have something in mind that you think might produce a superior return then go for it. Otherwise, welcome to the low-risk club!
Thanks for reading.