The Chia HODL – Why you don’t sell by HumbleFarmer
Written By: HumbleFarmer | Catagory: Opinion | Date: 2021-05-16
I define myself as rich because I will only sell what I must. No sane person will fault anyone who needs to cover expenses or pay the mortgage. However, every single Chia I manage to HODL will be hoarded like I’m Scrooge McDuck.
Chia (XCH) is a digital asset. A rather high quality digital asset at that. What does this imply?
It is only a matter of time before you can use this digital asset as collateral for a loan. With Chia as collateral for a loan, there will be no need to sell the asset and pay capital gains tax. More importantly, your high quality asset will appreciate over the longer term. Think about that person who bought a downtown block in NYC 100 years ago and managed to hold it. That family never sold that asset and now uses it to fund new ventures while always retaining the underlying asset. Your asset is Chia, and you’re betting it will appreciate just like that NYC property.
You may use your XCH holdings as collateral for a USD loan with variable interest rates (6% on Nexo). Go to a high quality Defi platform that yields 10+% for stable coins such as USDC. In this current environment you can pay the loan back and keep the difference for income that you will pay taxes on. It’s a win-win for you and Uncle Sam or whatever jurisdiction you are in.
People who understand this only sell what they absolutely have to sell. They hold on to their assets and use them to take loans for ventures that yield cash flow. But they never lose the asset that allows them this freedom. Be that person!
None of this is financial advice. Merely suggestions for you to do your own research. Here are a few links to get started with.