Microcashing bitcoin, or The Don’t HODL Handbook

To all you HODLers out there: you’re doing it wrong. Well, some of you anyway. Not using your bitcoin gains now and waiting for them to be worth even more in the future is in many cases not the smart way to go. In this article I will explain.

Of course there are situations where HODLing is a good idea. If you have plenty of money anyway and some bitcoin just in case, please HODL away. If you have only just started stacking sats, please go on doing just that. You can’t spend them before you have them. And so on.

But I read many tweets and other accounts from people who apparently have a comfortable amount of bitcoin and declare that just HODLing is the way to go, or even that they will NEVER cash in. To those I say: relax, cut the greed and enjoy some of it now.

Sure, it’s an attractive idea that if you just wait, your HODLings may be worth ten times as much, maybe a hundred times, at some point in the future. Don’t buy that iPhone: if you look back four years from now it could look very, very expensive.

Maybe you’re even waiting for hyperbitcoinization. Oh, the promised land where just 21 million bitcoin need to take care of all of the world’s transactions! HODLers will rule the world.

But hey, other things might happen too. You could get hit by a car tomorrow, maybe even before you told your loved ones how to use those bitcoins you were HODLing. In any case you wouldn’t be using them yourself at all anymore.

Or the powers that be could impose such harsh regulations on exchanges and such, that demand for bitcoins would go down, taking down the bitcoin price with it. I’m not saying they will, but some of them certainly want to.

But I am saying there are many ways the world could ignore your plans. Saving and investing is about managing uncertainties. Some of you consider bitcoin to be a hedge of some sort. How about hedging against your HODLing being in vain?

Me, I am 62 years old and maybe I don’t need a car to run me over in order to die within the next ten years. For me, there is no point in waiting for bitcoin to make me a millionaire when I’m 80 and peeing my pants in my wheelchair.

A thousand bucks may make me happier now than a million will in ten or twenty years. I’m not sure. Anything can happen. So I’m HODLing some coins and unHODLing others.

I want to stress that doing this is not just for elderly people. Can you buy a house with your bitcoin now? Why don’t you go out and buy the freakin’ house? If you wait, maybe you can buy a bigger one in four years, but how about some happiness now?

Oh yeah: don’t just look at possible future gains. Look at what you made already. You know what they say: nobody got broke by taking a profit.

I have a strategy for cashing in on my crypto and I call it microcashing. Each month I sell 1% of my holdings. The next month I sell 1% of what is left. And so on. This way I have some extra income to spend. Or save, if i have a bigger purchase in mind.

What is more: as long as crypto prices rise by more than 1% each month on average, which they historically have exceeded greatly, the dollar/euro value of my holdings will still rise, and so will my additional income.

Still more, although the bitcoin amount that I hold will decrease, it will NEVER run out. Do the math: it will exponentially decrease. After five years, I will have more than half left (0.99 to the power of 60). After ten, I will still have about 30%, and so on.

So if prices rise like they have in the past I will still have comfortable gains AND I will have made good use of them as well. Even better, by cashing periodically I make sure to not miss the high price points. How’s that for managing uncertainties?

And if, for whatever reason, the bitcoin price should collapse, I will still be happy. Happy that I started cashing in time and secured at least some of my winnings.

Of course I reserve the right to bend my own rules. In a bear market I may stop selling or even buy back. We’ll see.

There are many knobs a person can twist here. Change the percentage. Change the period. Start five years from now, or at a certain bitcoin price. Only apply microcashing to 50% of your holdings. And so on. You can even apply it to your stock portfolio!

I’m not telling you what to do. This is about what’s possible, good or bad. It’s your money and your life. For me, microcashing works great because I won’t miss a trip to the moon, I get to enjoy much of my savings and there will be some left for others when I die.

So live your own life, make your own choices and don’t forget to have some fun. Thanks for reading and let me know what your ideas are. Take care!