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October 15, 2025
Introduction
You bought Bitcoin when people called it a ponzi. Now it’s worth over $100k, and that investment has turned into life changing money. Your friends ask when you’ll sell, and your partner mentions home upgrades.
While selling Bitcoin locks in your profits, it might be the most expensive financial decision you ever make. Not because of what you’d gain today, but what you might give up tomorrow. Just ask the Bitcoin Pizza guy.
Bitcoin's Unbelievable Run
Putting things into perspective: $1,000 invested in Bitcoin in 2017 when it traded under $1,000 would be worth over $100,000 today. The asset has survived every death claim written about it, outlasted regulatory crackdowns, and come out stronger. BlackRock runs Bitcoin ETFs. MicroStrategy holds billions. Bitcoin isn’t fringe anymore.
So when’s the right time to sell something that’s defied every expectation?
Common Reasons People Sell
Most financial pros point to these moments:
You’ve hit your goal. Maybe Bitcoin covered your dream home or early retirement target.
You need cash. Emergencies and big expenses don’t wait for market timing.
Your portfolio’s unbalanced. If Bitcoin now makes up most of your net worth, rebalancing can reduce risk.
The market feels euphoric. When everyone’s talking crypto again, some see a top forming.
All very reasonable reasons to sell, but also potential regrets.
The Cost of Selling
Taxes Take a Big Bite
Selling means taxes. If you’ve held for under a year, profits are taxed as ordinary income which means up to 37% federally. Even long-term gains face 20% plus possible surcharges. Sell $90,000 in profit and you could easily owe $20,000–$35,000. That’s future compounding lost to taxes.
Opportunity Cost
The bigger sting comes years later. Many who sold at $1,000 or $10,000 thought they were geniuses until Bitcoin hit $50,000 or $100,000. Historically, holding through crashes has outperformed trying to time the next dip. Selling too early often means watching from the sidelines as the cycle repeats.
If You Need to Sell
Sometimes selling is unavoidable. If you have to, do it in a smart way.
The 2x Rule: When your investment doubles, sell enough to recover your initial capital. You’ll sleep easier knowing the rest is playing with profit.
Dollar-Cost Average Out: Sell in small portions over time. It evens out price swings and avoids the regret of selling everything at the wrong moment.
Technical Triggers: Some traders follow clear signals like Bitcoin breaking below its 200-day moving average. It’s not perfect, but it adds some sort of structure to the sale.
Cycle-Based Selling: Bitcoin has historically peaked 12–18 months after each halving. Selling small portions during those windows has worked in the past for long-term holders.
The Better Alternative: Borrow Against Bitcoin
What if you could unlock your Bitcoin’s value without selling? Without paying taxes or giving up future gains? That’s exactly what many investors and companies now do through Bitcoin-backed loans.
How It Works
It is similar to a home equity loan, but with Bitcoin as collateral. For example:
Deposit Bitcoin worth $100,000.
Borrow up to $60,000 against it.
Pay interest annually.
Keep ownership of your Bitcoin as it continues to appreciate.
Platforms like Arch make this process simple and secure.
Why It Matters
No taxable event. You’re borrowing, not selling. The IRS stays out until you actually liquidate.
Keep your upside. Even while paying interest, you retain exposure to Bitcoin’s long-term growth.
Instant liquidity. Need cash for a business, real estate, or emergency? Borrow it instead of selling.
Flexible repayment. Many lenders allow interest-only or deferred payments, giving you breathing room.
Real-World Examples
Sarah (SMB Owner): She borrowed against her Bitcoin instead of selling to fund her business expansion. Her company doubled in sales and Bitcoin rose 60%. She was able to pay off the loan without losing her holdings.
Mike (Real Estate Investor): Needed $100K for a property down payment. He borrowed instead of selling, and the rental income now covers his loan interest while his Bitcoin keeps appreciating.
David, the Taxpayer: Faced a $50K bill. Selling would’ve triggered more taxes. Borrowing bought him time and preserved his position.
Managing the Risks
Bitcoin-backed loans aren’t risk-free. Handle them appropriately:
Stay conservative. Keep loan-to-value at a reasonable level to avoid liquidation if Bitcoin dips.
Use trusted platforms. Choose lenders that use insured, regulated custodians that don’t rehypothecate.
Plan repayments. Don’t rely on price rebounds, have income or reserves ready.
Know your margin calls. Understand your platform’s liquidation thresholds and monitor them during volatility.
The Institutional Playbook: Why "Never Sell" Makes Sense
Michael Saylor of MicroStrategy calls Bitcoin “pristine collateral.” His company has borrowed hundreds of millions against it just to buy more Bitcoin. Tesla and others hold it on their balance sheets for the same reason.
The logic is clear:
Bitcoin’s supply is capped.
It’s globally liquid, 24/7.
Despite volatility, its long-term trajectory has been up and to the right.
For them, selling Bitcoin is like selling Manhattan land in the 1800s, a permanent loss of scarce wealth.
Choosing Your Strategy
There’s no universal “best time” to sell. It depends on your goals, risk tolerance, and time horizon. But before selling, ask yourself:
Could borrowing solve my liquidity need?
What’s my time horizon? If it’s 5+ years, history favors holding.
Can I handle volatility? The biggest gains go to those who can.
What’s my tax exposure? The higher your bracket, the more valuable deferral becomes.
Conclusion
Maybe the right question isn’t “When should I sell Bitcoin?” but “How can I use it without selling it?” Selling can make sense when life demands it. But for many, borrowing against Bitcoin is a better play given no taxes, continued upside, and flexible liquidity. That’s how long-term holders are quietly building generational wealth.
About Arch
Arch is building a next-gen wealth management platform for individuals holding alternative assets. Our flagship product is the crypto-backed loan, which allows you to securely and affordably borrow against your crypto. We also offer access to bank-grade custody, trading and staking services.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrency investments are volatile and risky. Always conduct your own research before making investment decisions.