Should you sell your crypto in a bear market?

While selling typically has a bearish connotation, some companies that have sold their cryptocurrencies this year still maintain a long-term bullish approach to the digital currency industry.

Cypherpunk Holdings, a Canadian investment firm, has stated that it has a long-term bullish approach to the cryptocurrency market and is one of the first public companies to put Bitcoin on its balance sheets and invest in the digital currency. However, the short-term approach to the market is not bullish, and the firm sold the entirety of its Bitcoin and Ethereum investment earlier this year in June. According to the firm’s CEO Jeffrey Gao, investors in the cryptocurrency space can – and should – remain bullish. According to Gao, cashing out and selling cryptocurrency occasionally does not mean the firm is bearish on the industry.

Gao has also said that the business is might buy Bitcoin or any other cryptocurrency at any point in the short-term future if there are opportunities and that selling does not mean they are not bullish on crypto.

Selling Bitcoin in a bear market

Often firms or traders that have a long-term focus with cryptocurrency investment tend to HODL (“hold on for dear life”) during a bear run. This approach means that when the market turns up again, they have not sold and lost value on their cryptocurrencies. Another popular approach to a bear market for bullish investors is to buy and store cryptocurrencies while the values are lower. This is referred to “buying the dip” and it means that the investment gains more when the market rallies, meaning if they sell when the price is higher, they are making more of a profit.

According to Gao, the rationale behind selling cryptocurrency during the bear market is to mitigate risk. As Bitcoin and cryptocurrencies lose value and enter a bear market, they become risk-on alternative assets. Gao’s approach to selling is to avoid the risk and loss in capital if values should sink further.