The biggest change I need to make in this crypto bull run is profit-taking. Like most I know, during the last bull run we stacked a lot of coins and tokens only to watch the value of them go to almost zero because we did not have a profit-taking strategy. And I bet most reading this did the same.
This time I have a plan. Making myself stick to it will be the hard part. Based on previous Bitcoin cycles, this bull run is due to end around September. However, there is a curveball this time round and that is the institutional money and mainstream adoption by the likes of Via and Paypal. his curveball could have a major impact on the cycle and the bull run in general.
The plan is very simple. Take 10% into stable coin in April, May, June, July, and Aug. This will still leave me with just over 50% of my coins and tokens for any blow-off top if there is one. If there is not a blow-off top, the chances are it will be a supercycle. Either way, I'm holding some so it will be good. and sure if the third alternative happens, a massive correction, I have taken profits and can hold again for another few years :-)
Defi is going to play an important role in my profit-taking strategy. I don't have much intention of cashing out so I want to make my stable coins work for me. And this is where Defi steps in. Finding a good Defi Project with good returns will ensure I am still making gains.
CUB Finance has really grabbed my attention. I'm not so fond of liquidity pools. Price movement on the pair you provide liquidity for can have a big impact on the ratio of coins you are returned when you exit the pool. However, these liquidity pools used for Farming, on CUB pay a really good reward. The CUB-BUSD LP currently provides over 400% APR.
I was holding most of my CUB in a den. Dens require you to stake only one coin to get a return, and with almost 200% on CUB alone, it's a really good opportunity. However today I decided to take a little of my April profits, BNB is up considerably. So I sold enough BNB to match my CUB holding and moved by CUB from the Den to the Farm.
I had been staking some of my DOT in the Cub Den since Cub launched. During the week I decided to move ALL of my DOT to the pool as I have become more confident with the Defi space and CUB in general.
With the move of my DOT and taking profits today and adding it to the liquidity pool, I now have around 8% of my portfolio in Cub Finance. If CUB can continue to perform as it has, I will happily deposit more as I take more profits.
Overall I think this gives me a good head start on risk management. What is your profit-taking strategy? Would you consider it an exit plan? What about risk management? How are you reducing your risk? What tips can you give me to reduce my risk?