Sometimes, you find yourself in a situation as a Bitcoin investor where you own a position that you don’t want to give up. Nevertheless, perhaps there is a semi-urgent need for funds way before you expected to sell your BTC position. In which case, what do you do?
This article explores this situation for Bitcoin investors who run into periodic cashflow crisis and need alternative options.
Selling BTC Short
Short selling, which essentially means to sell now but agree to buy it back later, is a risky way to get funds without completely exiting your Bitcoin position.
Given the volatility of the BTC price, selling short is even riskier than selling stocks short and is generally not recommended. However, when you believe the price will move favourably for you, it could throw off some cash when the price moves in the direction that you’re expecting.
It’s worth pointing out with short selling that there is a possibility of losing the entire position. Experienced Bitcoin traders and even stock traders don’t all use shorting because of the inherent risks in predicting market price movements in the short term and the consequences of getting it majorly wrong just one time.
Sell Other Assets to Raise Funds
Selling off other assets to raise funds is a cleaner way to get money without needing to liquidate a crypto position. You might not want to sell BTC right now because it’s underwater against your entry-point, or because you believe the price will rise steeply in the future. There’s also the transactional cost for making the sale which adds up with large sales too.
One strategy with selling other items is to consider the ones that aren’t likely to increase in value between the period that you’ve chosen to sell them and when you can afford to buy them back post-Bitcoin sale. Given that the period could be a year or longer, it requires looking into the virtual crystal ball a little bit too.
Getting a Loan
A short-term loan of up to a year isn’t too long a period to borrow money and repay it. It provides a structured facility where it’s clear what you’re borrowing, how long for, and what it will cost you.
Companies like LoanPig can ensure that your bad credit loans are approved, which creates the type of organised lending that you can plan around until you are ready to liquidate your BTC position completely. It also avoids the risks of shorting or disposing of much-loved other assets too.
Get a Second Job
You don’t want to do it, but if you are devoid of assets to sell and prefer not to go to a lender, then finding a second job is another solution.
The job could be being a delivery person for a food delivery business, walking dogs, or something else out of hours that can generate some extra guaranteed money. While it’ll be a weekly or monthly amount in earnings, rather than a lump sum, it might also help ease the financial pressure over time.
If all else fails, liquidate a smaller lot and not the whole Bitcoin position. If you have no other option, then you might just have to do that and accept that you invested more than was affordable.
