Short video by Ben Simpson advising crypto investors not to hold losing altcoins too long. Presents a five-step checklist to decide whether to hold, sell, or buy more: (1) check if the coin is effectively dead (claims ~50% died since 2014), (2) reassess fundamentals (use case, development, social activity, competitors, runway), (3) avoid emotional attachment, (4) quantify how large a gain is needed to break even, and (5) avoid sunk-cost fallacy and consider opportunity cost and tax implications.
Chapters
Here's a mistake that's secretly killing your portfolio and it's holding altcoins too long, hoping they're going to come back. I'm going to give you a five part checklist right now to help you reconsider whether or not you should hold or sell or buy more of that altcoin. Okay, here's the five steps to help you confidently assess whether or not you should sell, buy, or hold. Number one, look at the history. All right? Understand that so many different cryptocurrencies do not make it to future bull markets. In fact, number one question here is, is your cryptocurrency dead? So many cryptocurrencies are actually died and have no real need or use case to keep them driving forward. In fact, 50% of cryptocurrencies have died since 2014. Okay, step number two is reassess your cryptocurrencies based on the fundamentals. Okay? These are the different questions you need to ask yourself. Do they have a growing need? Are they still building? Do they have active social media? Are they being surpassed by competitors? Do they have sufficient Runway left? Tickle these boxes. All right? If it's not dead, this is number two. Tickle these and understand whether it's yes, no or uncertain. Number three, are you too emotionally attached to your cryptocurrency? I see so many people not want to sell because they are too emotionally attached, thinking it's going to come back, right? That's a big one. Number four is, do you actually understand how much it requires the coin to come back to previous all time highs? If your coin is down 50, 60, 70, 89%, this is how much it needs to go up. If your coin's down 80%, it has to go up 400% just to break even. All right, and the last one is, are you stuck on the sunk cost fallacy? And can you save tax by selling? So many people think that it's a trap to buy because the coin is down. They have to wait for it to come back. But it's opportunity cost, which is the most important thing. These are five steps. I understand it's hard. It can be painful, especially if you're selling on the way down. I've done this in the past. But think about opportunity cost. Opportunity cost is the reason that you would sell because you get into something better and that's going to save you a lot more money in the long run.
