I’m up huge in [MEMECOIN REDACTED]; what do I do?

Now that the crypto pump is in full swing and being fueled by news out of the US about the possibility of a crypto-friendly SEC, I’ve been receiving an uptick in the number of people looking for advice on what to do with life-changing paper profits. A “paper profit” is when the value of your investment has gone up, but you haven’t yet sold to “lock in” the profit. While what qualifies as life-changing is probably different for each person, to me an amount is life-changing if--when sold--it would be your all-time high of free cash. If you’re a 22-year-old fresh grad from a family of modest means, this might be an amount in the double-digit thousands of pesos. If you’re the head of cardiology with a vast portfolio of commercial real estate, this might be in the triple-digit millions. We all have our number. The point isn’t about meticulously calculating the number as it is about what to do when one of your holdings (like with what’s happened in Bitcoin and its shitcoin offspring) provides a windfall paper profit.

> My background:  I’ve been invested in Bitcoin since 2012 and have been a cryptocurrency advocate for about as long. I’ve given paper wallets of BTC to friends and family as Christmas presents (that have since tripled and quadrupled in value), I’ve participated in every single pump, and I’ve diamond-handed through every single winter. I’ve lost coins to exchange failures (Cryptsy), to shitcoin bankruptcies (Envion), and I’ve moved uncomfortable sums of money into sketchy exchanges to buy unlisted memecoins with hilariously stupid names. I’ve seen it all and done it all. On the PSE I’m a very careful investor. In crypto, I’m a complete degenerate. I’m not an expert, I’m just an older guy who has seen this movie many times before. Here is what I do.

> Assess your feelings:  Did you buy for the long haul, or did you purchase on a whim because the ticker made you laugh or because of a meme you saw? Does the price action make sense as part of a broader narrative, or does it seem unhinged? A lot of the time I can tell what I should probably do based on my feelings. If looking at my position makes me laugh and shake my head in the “what in the hell is going on here?” kind of way, I know that I’m not a long-haul holder. I’m a tourist who got lucky. I need to push some of this value to safety.

> Moving to safer ground:  How you move to safer ground will depend on what pumped, but when I’m moving to safety, I don’t think about stopping until I’m back to Bitcoin. If I made life-changing money on a Solana memecoin, especially if it’s one of those dank unlisted ones, I’m probably going to have to convert back to Solana first and then to Bitcoin. If it’s a more popular coin, I just do a direct swap. But I don’t stop until the amount is in Bitcoin.

> How much do I move?  The amount that you pull out of your winning position depends on so many factors that are specific to the situation and your circumstances. There’s no set rule. When DOGE went up a huge amount before Elon Musk’s SNL appearance a while back, I converted half of my holdings to Bitcoin, and let the other half ride. The SNL appearance was terrible for DOGE, so it locked in a good chunk of profit. If there was no event on the horizon, I might have pulled everything back to Bitcoin; that’s what I did during the Shiba Inu pump. 

> Why to Bitcoin?  Because Bitcoin is the best store of value, and it’s the thing that I’m betting on long-term. If your opinion of Bitcoin is different (that it’s a scam or something), then you might want to pull back to a stablecoin like USDT (to stay in the crypto space) or even back to cash. I’ve always regretted holding junk coins when the music stops and everyone is scrambling for a chair. It’s never fun doing a “convert small balances” sweep on the value corpses of previous pumps. 

> Do I just leave it on the exchange?  Hell no! I never leave anything of value in exchanges for the long term. I might leave cash or Bitcoin there that I’m actively trading, but if I don’t plan to use the Bitcoin that day, I move it to my offline Ledger hardware wallet. If I convert to cash, I’m withdrawing the cash. “Not your keys, not your coins.” 

MB BOTTOM-LINE:  The one storyline that I see repeated pump after pump is the one where a new trader loses all (or substantially all) of their life-changing paper profits when the market turns. I’ve been there, and I’ve seen it happen many times. We all think that we’ll be the first one out the door when the fire starts, but drops in crypto can be swift and severe, even for established incumbents like Bitcoin or Ethereum. The shitcoin dumps can be brutal, especially if something has irrationally mooned beyond reasonable belief. As with all trading, you’re never going to pick the top or bottom of any trend. Locking in profits will always leave some money on the table. You’ll always watch the price rise a few points after you convert, or you’ll always hold marginally too long and sell during a slide. That’s just part of the game. But you’re not the Captain of the BRP Shitcoin, so you shouldn’t go down with the ship. Degenerate rats know that all boats are headed for the bottom, so accept your ratness and lock in your profits when you can. When something goes up enough to make you laugh, play some defense and lock in (all or some of) those profits. Can’t change your life without that step.

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