When should you sell your Bitcoin?

With Bitcoin poised to set a new price record, is it time to sell? Here's what to consider.

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Bitcoin is on the move again, currently trading at AUD$85,878, only a whisper away from its all-time-high price of AUD$86,468.

The latest rally has been spurred by a steady stream of headlines, including the adoption of BTC as an official currency in El Salvador and Twitter implementing BTC tipping. Most recently, we've seen the launch of a Bitcoin-related ETF in the US.

With so much positive news driving prices higher, many investors are wondering if now is the right time to cash out their Bitcoin. While everyone's circumstances are different, here are 2 approaches you should consider if you want to start cashing in.

Both these approaches have a common feature: You should set a price target for when you want to sell. That way, you've got a clear goal and are less likely to make emotional decisions.

Option 1. Dollar-cost averaging

Dollar-cost averaging (DCA) is a tried and tested investment strategy that involves making small regular purchases of an asset.

In classic dollar-cost averaging, you pick a fixed schedule, whether daily, weekly or monthly, then buy the same amount of Bitcoin every time, no matter what the price.

This will lower the average cost of your investment, compared to trying to time the highs and lows of the market.

The key point here is that DCA also works for selling. Instead of buying every week (or month), you are selling to a schedule. You pick a price for when you're willing to start selling, then sell when Bitcoin reaches that point.

Let's say you want to start selling your Bitcoin when it gets above $90,000.

As long as it is above your target price, you sell at regular intervals.

For example, you sell $200 of Bitcoin each week the price is above $90,000. You keep doing that on a regular basis while you're above that price.

Instead of dollar-cost averaging in, you are dollar-cost averaging out.

This strategy helps to minimise fear and greed, and lets you set a clear investment plan. You're spreading the risk over time.

Option 2. Sell as a lump sum

The second strategy you can use is to sell once you have reached your investment goal.

First, set a price target, then sell once that target is reached.

This requires a lot of discipline, as it is very easy to be tempted not to sell at all, in the hopes that the price will rise further.

One way to help stop this from happening is to set multiple price targets. This means you are taking profits, while still having the opportunity to enjoy future gains in price.

For example:

  • Sell 30% of your holdings at $100,000
  • Sell 30% at $110,000
  • Sell 30% at $120,000
  • Keep 10% to sell in the future, in case the market really takes off

Whichever approach you take, this is key: Choose a strategy and stick to it. Write it down. Set your target price and make sure you are prepared to follow through with your plan when the time comes. You can't eliminate risk that way, but you will be taking a much more disciplined approach than just second-guessing the market whenever there's movement.

Best cryptocurrency exchanges

If you're interested in selling or buying Bitcoin you can compare exchanges below.

Best for beginners: CoinSpot

CoinSpot Cryptocurrency Exchange

$1
Minimum Deposit
310
Cryptocurrencies
1
Fiat Currency
  • Simple design
  • Diverse altcoin range with 300+ to choose from
  • Advanced trading features
  • 1% trading fee can quickly add up
  • Only supports AUD deposits from an Australian bank account
  • High spreads
CoinSpot is one of the more popular Australian cryptocurrency exchanges, particularly for beginners. With CoinSpot you can deposit fiat currency (AUD) and make a purchase within minutes. There's no need to stress about currency conversion, market making or order limits.
Deposit Methods Bank transfer
BPAY
Cash
Cryptocurrency
POLi
PayID
Deposit Fees POLi & PayID: None
BPAY: 0.9%
Cash: 2.5%
Direct Deposit: 0%
Direct bank transfer: None
Withdrawal Fees None for Australian bank accounts
Trading Fees Instant buy: 1%
OTC: 0.1%
Market order: 0.1%*
*Applies to BTC, XRP, LTC, DOGE, ETH, NEO, POWR, GAS, TRX, EOS, XLM, RChain, RFOX

Best for AUD purchases: Swyftx

Swyftx Cryptocurrency Exchange

$0
Minimum Deposit
293
Cryptocurrencies
2
Fiat Currencies
  • Transparent fee structures and 0.6% trading fee also comes with a discount for high-volume traders
  • Hybrid exchange with advanced features
  • Demo account for beginner traders to practice trading
  • Does not offer an order book for variable pricing
  • Platform may be confusing for beginners
  • Can only be used by Australian, NZ and UK residents
Swyftx is the ideal exchange for buying Bitcoin with AUD due to its integration with Osko bank transfers and low fees. Users can send money to their Swyftx account instantly using bank transfer and POLi pay methods.
Deposit Methods Bank transfer
Credit card
Cryptocurrency
Debit card
Osko
PayID
Deposit Fees Cryptocurrency: None
AUD deposits: $0
Withdrawal Fees Cryptocurrency: None
AUD withdrawals: $0
Trading Fees 0.6%

Best for low fees: Binance

Binance Cryptocurrency Exchange

$50
Minimum Deposit
271
Cryptocurrencies
53
Fiat Currencies
  • Huge range of features and investment options
  • Low fees including discounts for users that pay their fees with BNB
  • Global reputation
  • Registered as a separate entity in Australia and regulated by AUSTRAC means limited features for Australians
  • Complex for beginners
  • Large amounts of money deposited on platform may risk exploitation
Binance is the most popular cryptocurrency exchange on the market based on trading volume. It has one of the best reputations in the industry and is available in a wide number of countries. Binance offers some of the lowest trading fees out there, with users able to purchase Bitcoin with fees as low as 0–0.1%. Binance is suitable for both beginners and experienced traders. So if you find yourself wanting to explore cryptocurrencies further, Binance will accommodate most of your needs.
Deposit Methods Credit card
Cryptocurrency
Debit card
Osko
PayID
Deposit Fees None
Withdrawal Fees Fees vary
Trading Fees 0-0.1%

Best for social trading: eToro

eToro Cryptocurrency Trading

US$50
Minimum Deposit
27
Cryptocurrencies
19
Fiat Currencies
  • Interact with other traders
  • Get access to multiple markets like global stocks and cryptocurrency
  • Simple user design
  • Complex fee structure
  • Small range of cryptocurrencies
  • High minimum deposit of US$50 and order of US$25
eToro has been around for over a decade now, originally starting as an online exchange for shares and commodities. Since then, it has branched out into cryptocurrency while retaining its focus on trading. eToro has ample support for traders, including advanced buy and sell features. The feature that separates eToro from the rest when it comes to trading is its social elements. eToro's platform is filled with like-minded investors, where you can discuss trades and share news about crypto events. You can even see what trades other top investors make and copy them.
Deposit Methods Bank transfer
Credit card
Debit card
Neteller
PayPal
Online banking
Skrill
Deposit Fees Fees vary (conversion fees for non-USD deposits)
(US$50 minimum deposit)
Withdrawal Fees US$5 (minimum withdrawal of US$50)
Trading Fees Fees vary. Overnight and weekend fees apply

How we choose these services

These are our top picks but this isn't a complete comparison of every available exchange – so our favourites may not be the best choice for you. Read our full methodology here to see how we decide on our top picks.

Compare cryptocurrency exchanges

Interested in cryptocurrency? Learn more about the basics with our beginner's guide to Bitcoin, dive deeper by learning about Ethereum and bust the 5 biggest misconceptions about cryptocurrency.


Disclosure: The author owns a range of cryptocurrencies at the time of writing

Image: Getty

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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