Buy? Sell? HODL? What to in a #cryptocurrency Bear Market.

So. Am I being stupid?

peanut gallery, in chorus: "YES! YES, YOU ARE BEING STUPID!"
me: thx, fam
peanut gallery, in chorus: "HAPPY TO HELP!"
me: 🙄

Okay, so, am I being stupid? I'm #HODL-ing onto these coins that have downward momentum AND sell-recommendations (GOOD sell-recommendations, we have established).

My first thought was to sell these coins, but there are two problems there.

1. One problem is I incur tax liability for short-term capital gains on coins that I made out like gang-busters.
2. Another problem is that I actually lose (fiat) money on coins that made out like ... party-poopers? (is 'party poopers' the opposite of gang-busters?)

So I don't like the idea of selling coins in a bear market for the above reasons.

My second thought was to convert these down-trending coins to coins on the upswing.

Great idea.

In theory.

In practice, the #cryptocurrency market seems to swing in a direction uniformly.

I mean, certainly, there are some coins going up when the #cryptocurrency market is going down, but these coins tend to be fringe: ill-researched and not in my wheelhouse (you see my prejudice here). Buying a fringe-coin is not my modus operandi now.

So, what to do?

That's when today's (2021-07-14) recommendations hit me: two tethered coins, $USDC and $USDT, made the buy-recommendation list. 

Why would I ever consider buying a tethered coin? I wouldn't. Not until now. But let's think about it.

When the market is going down, if I convert my #cryptocurrency to tethered coins, then I capture their worth right at that point. The markets continue to plummet, until they don't, then, at that point, I reenter the markets and recapture the positive momentum of those coins.

Now, some may argue that this is 'timing the market,' and that 'timing the market' gets you burned.

I say: not at all. This is following a trend. It doesn't make sense for me to #HODL on a downward trend: what makes sense is to convert to stable coin then.

Converting to stable coin has two benefits:

1. it captures the value of the coin that you would lose if you #HODL in a bear market
2. because you're not converting to fiat currency, it doesn't incur tax liability that you would incur by selling the coin.

This reveals a three-tiered approach to #cryptocurrency.

1. Buy on a buy-recommended up-trending coin
2. Convert sell-recommended coins to 1.
3. In a bear market, convert sell-recommended coins to stable coin to retain value.

Lather. Rinse. Repeat.

I am using this approach going forward.

Epilogue:

I converted my $1INCH and $COMP holdings to $MANA, based on its upward trend in price (at the time) and associated gaming-token buzz. 

We'll see how this strategy plays out.