You almost cannot move money through crypto and end up with the exact amount you started with. You either end up with a bit more, a bit less, a lot more, or a lot less. In this article, I want to show you how you can always end up with a bit more.
How much are we talking about?
A million dollars can be categorized as a large fund. But I'd say a large fund really begins at $10 million. People moving such a large amount through crypto don't care much about making more money. They just want the value of their money to be preserved through the transaction.
The last thing anyone wants is to start with $10 million and end up with $8.5 million. And that has happened to many people already. In fact, I once saw a case on Twitter where someone mistook the Ethereum gas fee and the actual amount being sent for each other. And it was a large transaction.
This article is not about how not to confuse gas fees with the transaction amount. (Do not send large funds on crypto when you are slightly or very intoxicated). Instead, this is about transaction strategies.
First, check the cycle
The first thing you must look out for when processing a large transaction in crypto is the market cycle. Which phase are we in? This matters a lot. How you will navigate in a bull cycle is slightly different from how you would navigate in a bear cycle.
The methods are generally the same for both cycles, but you have to be more meticulous in a bear cycle.
In a bull cycle, you just have to be patient and you will enjoy the upswing. In a bear cycle, you have to move fast so you don't get whipped by the downswing.
Second, how you buy
If the funds are very large, you should consider breaking them up into chunks. If you are sending $50 million (as an example), break it into 5 chunks of $10 million. And you never do all 5 at the same time.
The chances of getting a bit more, by being meticulous, with one transaction is not high. There is no precise calculation for this. This is probability. Some sudden turn can hit the market and mess up your plans. This is why you have the smaller chunks.
Now you know that you just have to target the upswing 3 times out of 5. And this is the point, you target an upswing moment with each chunk. Don't be greedy to do 2 or more chunks at the same time. Take it one by one.
And by the way, I only recommend using bitcoin. I have not used any other cryptocurrencies for this and hence, I cannot speak for them. There may be good ones for this purpose, but I cannot speak for any.
Third, target the upswing
Here, you want to look at the 1-month chart and the 1-week chart. Now, I do not recommend you become a chart reader all of a sudden because you want to move money. That is not wise.
The idea is that whatever is prevalent during the month and the week will probably continue during the period of your move. And when you are moving major funds, your transaction will move the market.
So, if we are in a bear cycle and the week has been mostly red candles, you want to buy at a red candle. Your large transaction will lead to a green candle (most likely). And you can exit with the upswing. There are no guarantees, but the probability is better. Moreso, this is why you have the different chunks. The potential gains of the successful chunks will offset the potential losses of the unsuccessful chunks and fees.
If it is a bear cycle and the week has been mostly greens, it is better to wait than to buy at a high green candle. If you are going to go ahead anyway, then you must be very fast. Move out in less than 6 hours.
In a bull cycle, it really doesn't matter when you move in. All you have to do is to be patient for the upswing. The only thing to note here is not to be greedy. Once the funds are worth a bit more, you should move out. The benchmark timeline is 1 week. Do not wait beyond a week in the bull cycle. In fact, you should be out in 5 days.
In a bear market, 24 hours is more like it. And in many cases, the weekend when there is less activity is ideal.
There is a warning though.
Never trust price stability in crypto. You are either going to catch a up swing or down swing in crypto. Forget about a flat price.
The swing will likely not be huge. It might just be a $500 to $1,000 difference.
If you get something better than a $1,000 difference, move out immediately. Don't be greedy. If it is less than $500 and the market is in a bull cycle, you can wait for the upswing. If it is not a bull market, get out within 24 hours (even if you are in a mild loss). In a mild loss, the other chunks should make up for it.
In a bear market, the longer you are in, the more you lose value on your money. In a bull market, the longer you are in, the more you make money.
Fourth, learn from previous chunks
The biggest lesson here is splitting funds into chunks. Always do one at a time. And you can always learn from previous transactions, you might be intrigued about the fees. You get to pay more in fees if you send in chunks.
I consider sending $42m in one transaction unnecessarily risky. Why not offset the risk? Yes, you may pay more in fees by sending in chunks, but by catching some upswings, the gains offset the fees, and you eventually end up with a bit more at the end of the transaction. However, if you are trading or investing, that is different. You may do as you wish in that case.
There is also the thing about taxes. Speak to a crypto tax professional about the implications. This is important for large funds moved through business entities.
Conclusion
If you want to move large funds through crypto, here are my recommendations;
- Use bitcoin
- Check the cycle
- Send in smaller chunks, one after the other
- Target the upswing
- Learn from previous transactions
I rest my case.