Lessons Learned From Buying and Selling 22ish Bitcoin

Here’s a story I discovered on Reddit.com/r/Bitcoin this morning. It’s not my story, but a success — and equally cautionary— story I thought should be shared outside of Reddit for people interested in buying and/or selling Bitcoin (and other cryptocurrencies). The poster, “DebtFreeMFers”, joined Bitcoin only two days ago, likely to share the post I’ve copy/pasted below. I’m glad they did and hope you find it valuable, too. (I’ve reached out to DebtFreeMFers for permission to repost this) Below is the full text with no edits.

Guys, I am out.

So I sold the last of my 22ish BTC yesterday.

I first got in around September of 2013 when the price was $130. I later set up a weekly buy on Coinbase buying the majority of my coins between $200 to $400. My original goal back then was to accumulate 21 BTC and be in the million club. I turned it off in 2015 once I was well over 21 coins. Of course looking back I wish I had never turned it off.

So why did I sell? The value is now enough that I can pay my capital gains and still have enough to pay off my house leaving me completely debt free. I found myself constantly stressing over the fact I was storing close to 200K and I also fully expect a pull back at some point soon. Once my house is paid off I will most likely start buying back in again using money that would have been going towards a house payment.

Things I Learned

Test your recovery process. If you have a hardware wallet (and you should) send a small amount of crypto to it then wipe it and reload it using your seed. This made me much more confident using the wallet once I had done this and knew that recovery was pretty simple. Also use a passphrase, but make sure it is one you will never forget.

Store your seed securely. I used a metal stamp to punch my seed into a ? inch steel plate. After that I dipped it in plastisol so it cannot be read and stored it in my safe with a description written on the outside. I also had another copy of the seed stored behind a picture at a trusted family member’s house just in case.

Sending a BTC transaction for tens of thousands of dollars is extremely stressful. I first moved my coins from Coinbase to a hardware wallet before the BCH fork (yes, I was stupid and stored them on an exchange, although I did use their cold storage feature so there was a waiting period before they could be moved if my account was compromised). It was a long 15 minutes before the transaction showed up on the blockchain (I think Coinbase batches transactions up before sending) so I was freaking out that I had done something wrong and all my coins were gone. I wanted to save on transaction fees, but I should have moved them in smaller increments.

Weekly buys and dollar cost averaging is the way to buy. I never had to think about the weekly buy so it was worth the small amount I paid for fees. Over time I was able to build a substantial sum.

It takes a long time to get out due to limits. I was limited to 10K withdrawal per day so it is taking a while to transition to fiat. I applied for an increase but it was denied for some reason. I am pretty happy with Coinbase, but they are obviously dealing with growing pains. After withdrawing around 50K they quit letting me withdraw and said I needed to do some more verification. I tried uploading my license but the verification kept failing with a blank error message. I submitted a support ticket and heard nothing for several days. I finally remembered that they had recently added phone support so found the number and called. I only had to wait about 10 minutes until I talked to someone and they were very helpful. It turns out I was supposed to be prompted to use a web cam to take a selfie after uploading my license. Once I found that out I did it on my laptop that has a camera and was verified within 5 minutes. I had no problems with withdrawals after that.

Capital gains suck. I took all the risk of buying into crypto yet I am going to be on the hook for close to 30K to the government for my long term gains. There is no way I am fucking around with the IRS though, so I will happily pay them. I still have some other crypto and will most likely start buying back in again in a few months. In a few years when I retire I will most likely try to live off of 37.5K income per year from selling crypto so I do not have to pay those capital gains. After a few years of that I will dip into my traditional retirement accounts. I still need to find out if I need to pay an estimated tax payment this quarter to avoid a penalty for not having enough taken out of my paycheck to cover my taxes for the year.

My hat is off to those that are still hodling. It has already gone up quite a bit since I sold. I might look back at selling and kick myself in the future, but right now the thought of being debt free is pretty liberating. It has been one fucking hell of a ride and I will be back on the coaster with the rest of you soon!

Wow, what a story and great lessons to keep in mind! Bitcoin, cryptocurrency, and the Blockchain ecosystem feels like the Wild West, and in some ways, it’s comparable to the early days of the Internet. 

The original post has over 6,690 upvotes on Reddit (as of when I published this). There are some great comments you can read, too. 

Have any comments, your own success or cautionary story, and/ or questions? Feel free to respond to this post or tweet me @Thinker. 

Thanks for reading!