About two and a half years ago I became intrigued with bitcoin. I downloaded the Robinhood app and found out you could buy bitcoin on it. I started by trying to day trade bitcoin, which was a learning curve for me. After some pretty big gains and some major losses, I realized trying to day trade bitcoin might not be my best idea for me, especially since I had a full time job and my business to run. So, after some major losses, I decided to invest for longer durations. Once I recouped the money, plus 25% gain on the money I had invested, I sold my bitcoin and started trading stocks. I proceeded to trade stocks and bitcoin for a couple months.
Then it was November of 2019 and I was talking with a friend who also traded stocks about all of the news we were seeing around a market crash in late 2019. Since I was up around 25% at this time, Sam and I decided to sell everything we had in the market. We did this and sure enough, no market crash. We thought, eh whatever, and forgot about trading. Then Covid-19 hit, we did not even think about stocks or trading crypto for the first week, then it dawned on us, that we needed to be buying at the discount. So, we hopped into a bunch of travel stocks. This began our second stage of learning. We bought and sold some on the way up but after a few months of doing this, we learned it would have paid more if we had bought low, held it for however many months it took to reach its 52 week high, then sell. So, that was the new technique we adopted.
We continued to do this with stocks and then when cryptocurrencies went on a discount, we started doing the same thing with cryptocurrencies. We would purchase near the 52 week low or where we believed the new floor was for cryptos, then we would sell when it neared its 52 week high or when we saw it getting close to previous highs in cryptos. We did this to wind out 2020 and about half way through 2021. Around this time we started considering short term capital gains and long term capital gains. We decided to quit trading and do long term investing only. Until now…
Now that we are in 2022 and I sold my company to Ryan and Cody last year, my income is going to come down drastically. I am also getting married in 48 days. These two things considering, my tax bracket is going to come down significantly. Between Sam and I, we will be able to make up to $340,000 a year before our tax bracket jumps from 24% to 32%. I previously have been in the 32% tax bracket which did not make selling cryptocurrencies the best move for me. However, now, that I will be in the 22-24% tax bracket, I will be able to start trading again. This will allow me to make more gains in the short term by going back to my trading strategy of buying low and selling high.
I do not do this with all of my crypto however, I do hold some crypto now. I add to my long term holdings whenever there is a big enough discount that warrants so. I have a lot of faith in crypto long term and I will be investing in it long term. I am excited to move back to trading and start making short term gains again.
I hope you enjoyed my crypto and investing recap over the last two and a half years. Crypto is currently at a discount today, low enough for me to buy in, so I figured I would write about it. Check out our podcast being released on 1/07/2022 to listen to me discuss my cryptocurrency addiction.
Happy investing 🙂
Your life Tutor