These are really hard questions.
And, may actually be shtupid questions.
The future will tell us which.
The thought, "What is your exit strategy" was built in the time of stocks and bonds. During the time of swing/day trading.
During this time, the major currencies have been fairly stable. The stock market has been solid.
But, what is your exit strategy if the stock market fails? Gold goes parabolic? Silver goes more parabolic-er? What is your exit strategy from crypto, when it is becoming the money?
Well, we really need to consider the major probabilities, and so, this makes a much larger grid. However, it is really quite beneficial to get this laid out beforehand. Because emotions should not dictate what you do, and thinking while big changes are happening, will make you emotional.
What if bitcoin goes to a million dollars?
If you got a million dollars in the 1970s, you would want to take it out and put it into CDs in a bank and live the rest of your life however you wished.
During that time, the banks were very dependable. The Dollar was strong. The interest rates on savings existed. And a million dollars was significant.
Today, none of those things exist.
Soooo, you have a bitcoin, and it has just gone over a million dollars. What do you do?
Likelihood? Bitcoin is just as likely to go to $500k as $1,500k. If you stay in bitcoin, you have to accept this.
If the dollar is about to collapse, selling you bitcoin for dollars is a bad idea. And, over time, the Dollar's collapse probability goes to 100%. So, doing this, without a specific plan to spend those dollars quickly, is a losing proposition.
What is the likelihood that bitcoin becomes the world reserve currency? Well, when bitcoin hits 1 million, pretty high. However, at that time, it will be more clear about who the competition will be. Bitcoin at 1 million means that it is really here to stay, and so, a high probability that staying in bitcoin is your best choice. And shifting to anything else, especially Dollars is a BAD choice.
What to do is based on what is your crypto goals
Things were so much simpler when you invested in the stock market (or VC or housing), and then, when goal is reached move into cash in a savings account.
Today, you can no longer count on a dollar amount. A million dollars will not let you retire anymore, however, a house and a large garden might. So, do not have your plans tied to dollar amount, but a list of assets that will let you live comfortably the way you want.
As an example, you will want electricity. Today, you could buy stock in WhateverG&E, and use those dividends to pay your electric bill. This dividends will probably keep pace with the bill. Or, if you live in a sunny area, you can buy enough solar panels to provide for your electricity needs. Or, you can help you, and your tribe, and invest in a deep well for geothermal continuous energy. The price of each of these is varying wildly. If silver goes to $600 an ounce, the solar panels are going way up. If lots of people pioneer geothermal, it may get quite cheap (per capita). The stock market may cease to exist, the WhateverG&E stock may cease to pay out, or cease to exist, or it may be a hellava buy because people are dumping it. If you know your goal is electricity for you, for the rest of your life, you have a solid goal and can choose your plan as the markets move.
Your goal might be for you to retire. And if you have no heirs, you may find yourself way over that mark. If you have 1 bitcoin right now, you could probably retire now, if you have your house paid off. But in two to five years, you may have way more bitcoin than you could ever spend. And if bitcoin appears to "not be dying" then you are set, finished, enjoy your retirement.
But, if you have heirs, and you want generational wealth, than you got to keep your eyes open to which way "money" is going. Gold is real wealth, until it isn't. Silver will become very valuable, but you will probably be forced (or extremely encouraged) to sell it, and sell it for whatever the dollar is at that time. Crypto will definitely be part of the future, until we no longer use money. But, which crypto to store your wealth in?
Narrow down your goals. Write them down.
But, do not get attached to certain sub-goals. Things will be changing.
There may be no exit
Right now, we think of selling things for dollars. Well, most people do. But as the dollar gets more and more unstable, as hyper-inflation looms more and more, well the dollar is no exit.
And then it is replaced with the new dollar. Will it be a safe asset?
The banksters are pushing for bank owned dollar stable coins. Will these become CBDCs? Will they instantly become tools of oppression? However, you may be forced into them, or at least, forced into using them for a time.
Owning stocks has been risky from a stock market crash, stand point. But what if they are risky because the stock market deals in ghost shares. And will soon be shut down?
It could turn out that the only safe investment is/was buying rolls of copper wire. The precious metals are too expensive and TOO HARD to buy and sell. Like, you have to go on a national registry when you try to sell some PMs, and they will only pay you in old dollars (which you do not want)
There is a high likelihood that you will have to sit in crypto/PMs for a while until an exit is reconstructed.
And, of course, when the lines at the coin shop go all the way around the building, that is another hindrance, to accessing an exit.
Make a list of the things you want, the things that will allow you to retire:
- House
- Greenhouse
- Off grid electricity
- Generational wealth
Make a list of the future you think might happen
- total Mad Max, TEOTWAWKI
- Monetary collapse
- Slow monetary shift into something new
- Cryptos become THE currency
- Govern-cement collapse and some kind of anarchy appearing
And then, fill out your matrix of what you will do in each of these cases.
Because, although the price of a house, in bitcoin, will probably go down and down and down, getting the house allows you to use it. and that may be far more important than saving your bitcoin.