What is your crypto exit strategy ? 🚩
With the value of Bitcoin and most of the other cryptos going through the roof it had me thinking about when myself and others would decide to cash out to fiat and what the implications might be.
I started off my Bitcoin journey around about a year ago. I got my first 0.5 Bitcoin from an ATM as was I believer in it being the future with regards to currency. I think it is safe to say Bitcoin won't be used as a currency due to it's crazy volatility. As I've mentioned before Steam has stopped taking Bitcoin as a payment method due to this very reason.
Now I do agree it is a store of value, but the problem I see is most of the new comers now are buying into Bitcoin simply because they want to "get rich quick". They see others have made crazy money and now they want in. Now my issue with this is as some point these people are going to want to receive that money they have made in fiat as well as the long time holders who simply can't resist holding anymore if the price hits say $50,000 - $100,000.
At the mercy of the exchanges
Now here is the issue, do these exchanges where you would go to cash out these massive amounts actually have the fiat to pay out a large influx of people trying to cash out?
Coinbase has a cash out limit due to this very reason but someone who didn't buy any Bitcoin from Coinbase isn't stopped from sending Bitcoin to their Coinbase wallet and then cashing out that way. Also they have no obligation to buy Bitcoin back from you should the demand get too high.
Then we have exchanges like Poloniex who have suspended withdrawals of both Steem and SBD recently.
SBD is currently trading on Bittrex for $10. People who have sent their SBD to Poloniex are now prevented from cashing out. They and other exchanges can suspend wallets anytime they see fit, which we have seen when demand is high (or they feel a run to cash out is coming).
FUD
Now should another MtGox happen or some massive government regulation came in which caused a massive rush for the exit door, would the exchanges be able to cope? My guess is no.
Bitcoin may be a store of value but there is so much shady stuff going on that may prevent new people filling the gaps of the sellers. Like with ICO's. Some are legit and actually have something concrete to back them up, but a huge amount are just a printing press for money. There seems to be a new one popping up daily. The issue here is people could lose a fortune prompting FUD for the exit door.
Then there are investment sites such as Bitconnect, others have been proven scams such as Hexabot and Bitpetite (to name a few) that have walked off with millions and millions. Now Bitconnect is the big one, if this was to fold then the shock waves would be massive.
Now I don't know if this warning has always been on the Bitconnect main page as I'll be honest I'm usually in a rush to close that annoying video before it blasts out my speakers, but this seems like a massive "hey don't blame us" warning / get out.
My point is, through either FUD caused by ICO's, Lending platforms folding, government regulation or just large numbers of people wanting to cash out, the exit door seems a lot narrower than the entrance.
What are people's long term strategy? Cash out your initial investment then don't worry about the rest? Or hope Bitcoin stabilizers and is one day used as a currency?
As usual thanks for listening
Happy Steeming Steemers and Steemettes.
I don't think I will "get rich quick", but I'd like for Steem to stay around a while and be good for fiat currency. I suspect that I will not see a total change away from fiat in my lifetime. I'm just trying to get a big wad of money and using it to travel whenever and where ever I want.
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I’m currently in Bitconnect and i believ it is the most legit of these platforms. Also, the exchanges definitely cannot handle a mass evacuation of cryptos. I believe we would all be stuck and our losses would increase. I honestly feel the exchanges are a way for the govt to control cryptos
The thing with Bitconnect for me is they don't except their own crypto. You have to send your Bitcoin and then buy BCC on their exchange. Why won't they let you transfer BCC in from outside? You basically buy BCC with Bitcoin which pushes the price of BCC up, you then sell them their BCC back and get dollars in return which you then loan out and your pay out is in dollars.
I think it is a very unique pyramid scheme, unique as in it works off the crypto market which is like we have never seen before. I would love it to be legit as I would hate the idea of people losing their money like with Hexabot and Bitpetite.
" honestly feel the exchanges are a way for the govt to control cryptos"
I don't think that's how they started but they are now. People always say Bitcoin can't be stopped but I have long thought it is through the exchanges it can be done.
Thanks for the comment.
You can send the Bitconnect token to the platform from outside. Just like every other coin, you basically have to purchase BTC and then trade it for the coin you want. However, yes they do manipulate their price. I do believe it is fishy, but i also believ they are trying to become legit and get things set up the right way. Only time will tell.
Good luck with all your investments my friend and I appreciate the response from you :)
"I do believe it is fishy, but i also believe they are trying to become legit and get things set up the right way"
I agree with that :)
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