How To Access & Protect Your Assets

Eclectic Tastes

You may have heard the phrase “don’t put all your eggs in one basket”, which for trading or investing essentially means don’t put all your funds in one area, because if something goes wrong you could lose it all. The classic approach is to spread your money between stocks, bonds, cash and securities, which have a range of risk-to-return ratios.

  • If you have already made plenty of money you may pick a more conservative asset spread, such as Portfolio 1, and heavily load up on Bitcoin and Ethereum
  • If you are young with a small amount of disposable income you may be prepared to take more risks and load up on altcoins, like in Portfolio 3.

Safety Net

It’s not only market movements that can impact your net worth — with the rise of DeFi people have lost more than $10 billion this year through hacks, rugpulls and poor code. While I’m not necessarily a big fan of crypto insurance in its nascent state, I think it’s still responsible to tell you what options are out there. Some insurance policies are owned directly by a community (a ‘mutual’) and some work directly with protocols. Here’s a link that compares two mutual products out there.

Deadly Serious

Of course, worse than a rugpull is shuffling off this mortal coil. How on Earth are your family going to know where your crypto is or how to get it out? Some estimate that about 15% of all Bitcoin ever mined has been lost and can’t be accessed!

Ramp Down

Probably the most important thing to get to grips with is how you’re going to maximise the extraction of real world value from your stash. Although some people consider stacking sats a vocation, I’m someone that wants to know I’ll always be able to cash out if I need to, and that I won’t be giving up a large chunk of it to do so.

  1. For short term fund requirements — consider a crypto backed loan, where you borrow fiat against your crypto as collateral. If you can pay back the loan in a short period you didn’t need to convert any of your crypto in the process.
  2. For regular spending — consider a crypto debit or credit card. This is again country-specific in terms of access and taxes, but it does circumvent picky banks. Here’s a comparison of some of the popular cards out there.
  3. The most extreme move of course is to leave the country and take up residence in a low or zero-tax state! Portugal, Hong Kong, Puerto Rico and El Salvador’s future “Bitcoin City” are just a few of the options for this.

Know Your Funds

To summarise some of the key aspects we’ve covered in this article:

  1. Risk management applies to more than just TA
  2. Understanding your portfolio mix for each phase of the market is key
  3. Crypto insurance is a growing industry and may be a valuable service to some
  4. Plan for how your relatives will (or will not!) get access to your crypto when you’re gone
  5. Make sure you know your pathway to convert crypto to fiat and how to extract value from it

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