Post BF Upgrade Feedback - Click Here

Remove this Banner Ad

Cryptocurrency mega-thread

🥰 Love BigFooty? Join now for free.

BACCS said:
Hope some of you got on XRP at the bottom, have doubled my investment in 3 weeks
Click to expand...

I did, hence my question above about taking profits. Wondering if I should do so with XRP now or just keep it all in there and let it ride.
 
md20 said:
I did, hence my question above about taking profits. Wondering if I should do so with XRP now or just keep it all in there and let it ride.
Click to expand...
I’ll start taking some profits once it hits its previous ATH
 

Log in to remove this Banner Ad

md20 said:
Im hearing this term 'take profits'.
I havent been doing this.
Im guessing it is taking out the money you have gained and leaving in the amount you have deposited etc.

How do you know when to take profits? Is it a matter of analysis and timing the market?
My strategy is basically just DCA long term so should I even worry about this 'taking profits?'

I can see the benefits from it, such as taking your profits that you can then use in the future to buy more if there is a dip. So I kind of want to wrap my head around it.
Click to expand...

Is your strategy to buy and hold long-term, or trade regularly?

That'll inform part of your choices.

If you're a buy-and-hold type, you might as well just leave it there until such time as you believe the market will no longer grow long-term (such a due to a change in global conditions regarding crypto) or until you have such a large amount of money in there you're not comfortable leaving it there - would you be comfortable having $1,000 sitting in your crypto holdings? $10,000? $100,000? $1,000,000? There's a point that as a long term buy and hold investment, the volatility in the crypto market would mean you're uncomfortable holding that amount and seeing daily fluctuations in the amount of your average yearly wage for example.

As a trader, your threshold is different, the idea is that you buy in to a coin, make your profit (what % profit that is, is up to you) and get back out.

That % profit will depend on the coin, BTC is unlikely to move more than single digit percentages in a day, whereas more speculative coins can do 50% (or more) in a 24 hour window.

People posting here are a combination of the two types, some people will have a buy and hold strategy for some coins, and a trader strategy for others, some are simply buy and hold for everything, and others are a trader for everything.

So step 1 is working out what kind of investor are you?
 
md20 said:
Im hearing this term 'take profits'.
I havent been doing this.
Im guessing it is taking out the money you have gained and leaving in the amount you have deposited etc.

How do you know when to take profits? Is it a matter of analysis and timing the market?
My strategy is basically just DCA long term so should I even worry about this 'taking profits?'

I can see the benefits from it, such as taking your profits that you can then use in the future to buy more if there is a dip. So I kind of want to wrap my head around it.
Click to expand...
It seems nobody has taken the time to answer a legitimate question. You'll hear people say 'take profits' everywhere. This comes down to your own investing strategy and risk tolerance etc. There's nothing wrong with long term HODL and you'll likely make more money than trying to trade the ups and downs (especially if inexperienced).

Taking profits is all about building out your portfolio and continuing to grow it. If you invested during a bear market or major crash - taking profits on the way up is sound advice. Crypto is very volatile and it can crash at any moment. If you take profits, you're not going to lose all your money and/or go broke. However, if you're not overextended and can ride it out, it's not such a big deal.

The simplest example would be (and perhaps most common):

You purchase 100 tokens of X token at $1. Once that token reaches $2, you take out your initial investment. You've protected yourself, you will lose nothing. It's now a free bag/free money. You will now hold 50 tokens at $2. Maybe you'll sell another 50% at $3 etc etc up to you.

What most people do is then re-invest that initial into something else and thus begins the journey of growing your portfolio.

EDIT - Owen got in as I was typing, thanks for chipping in.
 
I appreciate both the responses. The more I thought about it, the more I thought im staying a HODL'r so shouldnt worry too much about it.

But now I have come across a thought such as possibly HODLing and taking profits.

Say, what if I decide to start taking profits when a coin hits an All Time High (every 20% increase from the ATH. Example only).
But the profits I take is every dollar I have made on my initial investment, leaving my initial investment in the market.
All while doing this, I am still Dollar Cost Averaging/adding to my inital investments still in the market hence still HODLing.

Am I thinking along the right line, or am I way off here?

I feel like there is a reason why this wouldnt work but cant put my finger on what it is, hence why Im asking before going through with that strategy.
 
Last edited:
md20 said:
I appreciate both the responses. The more I thought about it, the more I thought im staying a HODL'r so shouldnt worry too much about it.

But now I have come across a thought such as possibly HODLing and taking profits.

Say, what if I decide to start taking profits when a coin hits an All Time High (every 20% increase from the ATH. Example only).
But the profits I take is every dollar I have made on my initial investment, leaving my initial investment in the market.
All while doing this, I am still Dollar Cost Averaging/adding to my inital investments still in the market hence still HODLing.

Am I thinking along the right line, or am I way off here?
Click to expand...

Im only new to Crypto and my initial plan was/is to make enough that i am then only playing with profits. Initial investment was $10k and after about 2 months ive been able to withdraw $3k. I dont leave the money invested, i take it all out of the current holding and then buy back in on other same/other coins at lower costs. Once i get about a $1k ahead, i withdraw that from the portfolio to my bank account.

The unfortunate thing is if i had of kept some of the early buys i would be about $6-$7k up but thats part of the gig, knowing when to buy in and when to get out. As im new to it and hadnt followed it much, i am still working out the good prices to buy in and out. If/when prices fall to where they were previous, i would hold on to them longer knowing the likely ups and downs of the different coins.

Once im playing with the profits, ill look to keep most of it as a long hold asset and play around with a bit of it to hopefully build it up a bit more. I would also look to invest a bit more here or there and try and get that back and continue to raise the portfolio.
 
md20 I think you just have to set yourself realistic price targets for whatever coins you hold and when it reaches those, take out an amount and leave an amount in there that you’re comfortable with losing if the market turns quickly. At least by taking profits already, you’re still coming out in a position you were comfortable with risking.
 
md20, do you have a TradingView account? If you don’t I recommend getting one. There are solid technical indicators that can assist you with the right time to buy/sell (will never be 100% accurate as it requires your own intuition as well).
 

Remove this Banner Ad

md20 said:
I appreciate both the responses. The more I thought about it, the more I thought im staying a HODL'r so shouldnt worry too much about it.

But now I have come across a thought such as possibly HODLing and taking profits.

Say, what if I decide to start taking profits when a coin hits an All Time High (every 20% increase from the ATH. Example only).
But the profits I take is every dollar I have made on my initial investment, leaving my initial investment in the market.
All while doing this, I am still Dollar Cost Averaging/adding to my inital investments still in the market hence still HODLing.

Am I thinking along the right line, or am I way off here?

I feel like there is a reason why this wouldnt work but cant put my finger on what it is, hence why Im asking before going through with that strategy.
Click to expand...

Taking profit out, then DCA back in, on the way up means you'll end up with less units than if you just kept DCA in without taking profit, if you're intent on holding the same coins long-term.

You can take profit out and transfer it in to others coins to diversify your holdings, or take it out and hold it in a stablecoin like USDT waiting for that same coin to drop, or you can trade in-out of BTC with the intention of using profitable trades in alt-coins to increase your BTC holdings over time. There's a myriad of strategies depending on your goals and risk tolerance.
 
Thanks guys. Probably thinking too much into it and will stick with DCA and HODLing at the moment.
Until I get more experience and study up a bit more.
 
owen87 said:
Taking profit out, then DCA back in, on the way up means you'll end up with less units than if you just kept DCA in without taking profit, if you're intent on holding the same coins long-term.

You can take profit out and transfer it in to others coins to diversify your holdings, or take it out and hold it in a stablecoin like USDT waiting for that same coin to drop, or you can trade in-out of BTC with the intention of using profitable trades in alt-coins to increase your BTC holdings over time. There's a myriad of strategies depending on your goals and risk tolerance.
Click to expand...

Do you still have to pay capital gains tax if you sell and hold in a stable coin, or is it only if you sell into fiat?
 
md20 said:
Do you still have to pay capital gains tax if you sell and hold in a stable coin, or is it only if you sell into fiat?
Click to expand...

Every trade is a CGT event, so trading Fiat > Crypto or Crypto > Crypto are all CGT events. Any trade you make is technically reportable, and you could theoretically end up owing more in CGT than your current crypto portfoiio is worth during a downturn.

Stablecoin are just a form of crypto tied to a fiat currency, USDT or BUSD are both tied to the US Dollar for example, but are still a trade.
 
owen87 said:
Every trade is a CGT event, so trading Fiat > Crypto or Crypto > Crypto are all CGT events. Any trade you make is technically reportable, and you could theoretically end up owing more in CGT than your current crypto portfoiio is worth during a downturn.

Stablecoin are just a form of crypto tied to a fiat currency, USDT or BUSD are both tied to the US Dollar for example, but are still a trade.
Click to expand...
Someone more experienced in this space than me told me over the weekend that any trades on exchanges that are based overseas cannot be tracked by the ATO, but those based here can. Any truth to this? I am not trying to skirt around any tax obligations, but interested to know whether the ATO can actually see any transactions on exchanges that aren’t located here.
 
BACCS said:
Someone more experienced in this space than me told me over the weekend that any trades on exchanges that are based overseas cannot be tracked by the ATO, but those based here can. Any truth to this? I am not trying to skirt around any tax obligations, but interested to know whether the ATO can actually see any transactions on exchanges that aren’t located here.
Click to expand...

I imagine if you're wanting to take the risk that the ATO won't care enough to audit your transactions you're free to do so. But the official advice is that all trades are CGT events, and are thus reportable.

I have read that if you report pretty much anything they won't waste the effort checking it, so you could report CGT events to the value of $10 and they'll just throw their arms up and give it a pass. But that's not the official line, and anyone not reporting accurately is obviously making the decision themselves, as with any other taxable events, that the ATO could audit you and could therefore fine you for providing incorrect or false information.
 

🥰 Love BigFooty? Join now for free.

Seeing some murmurings on Twitter from experienced traders that they’re hearing US institutions could be looking to pump big dollars in Monday morning (so this arvo for us). Enough to send BTC over 50k. It’s of course just speculation and there is definitely some heavy sell pressure in the 46-48k range to overcome, but after ranging sideways for over a week something will give soon.
 
owen87 said:
I imagine if you're wanting to take the risk that the ATO won't care enough to audit your transactions you're free to do so. But the official advice is that all trades are CGT events, and are thus reportable.

I have read that if you report pretty much anything they won't waste the effort checking it, so you could report CGT events to the value of $10 and they'll just throw their arms up and give it a pass. But that's not the official line, and anyone not reporting accurately is obviously making the decision themselves, as with any other taxable events, that the ATO could audit you and could therefore fine you for providing incorrect or false information.
Click to expand...
Are the ATO able to audit apps/companies that don’t have a base in Australia, but do operate here? I remember that issue last year with trying to get the big tech companies to pay more tax in Australia, but not sure how successful that was.
 
BACCS said:
Are the ATO able to audit apps/companies that don’t have a base in Australia, but do operate here? I remember that issue last year with trying to get the big tech companies to pay more tax in Australia, but not sure how successful that was.
Click to expand...

I believe that most of the major exchanges have to provide the information to the ATO if requested. Totally different scenario than trying to make Google or Apple pay tax here.
 
BACCS said:
Are the ATO able to audit apps/companies that don’t have a base in Australia, but do operate here? I remember that issue last year with trying to get the big tech companies to pay more tax in Australia, but not sure how successful that was.
Click to expand...
It's blockchain. Every transaction is traceable. If they want to audit you, they will trace your wallets/accounts through the blockchain. If you're making 6 figures, they will look into you.
 
Nothing said:
It's blockchain. Every transaction is traceable. If they want to audit you, they will trace your wallets/accounts through the blockchain. If you're making 6 figures, they will look into you.
Click to expand...
That’s my thinking too, if you’re making enough they will make the effort to audit if they get a sniff of any misreporting. I am only asking as I know you can get a 50% discount if you hold a crypto for more than 12 months, but that can be a long time in this space.
 

Remove this Banner Ad

Remove this Banner Ad

🥰 Love BigFooty? Join now for free.

Back
Top Bottom