It looks like the bear market is behind us, and we've entered another bull cycle like clockwork.

You could end up with very large gains.

But having big gains and cashing out can be a lot more tricky to manage than people realize.

-The selling plan

The first issue is the plan of action on when and how to sell in the best way.

It's not a simple case of just putting all your coins on an exchange, and then clicking the sell button and sell everything in one trade. You need a plan.

Do you cash it all out at once? Do you take out just your principal? Do you dollar cost average out? In what increments do you sell? How much stays, how much gets out? When and where do you make your sales?

This is gonna be different for everyone, but it needs to be thought out a little, as opposed to just waiting for the top with no plan, and end up panic selling when it comes crashing down at the end of 2025 (I really don't know this lol, I'm just giving out a potential scenario).

-The cost of selling

Everything costs money. Even selling your gains.

It shouldn't cost you too much, but you still have to watch out for those fees.

You'll have trade fees and transaction fees. While some coins will have near $0 fees, things like Bitcoin and Ethereum may have more significant fees if their network is a little more congested.

Exchange fees are usually down to a percentage fee based on the dollar cost of the sale. So you don't necessarily get a discount for selling everything at once, as opposed to breaking up into multiple sales. There are lower fees on some exchange if you execute many trade in a month and things like that. So check those differences in fees before.

If you are completely cashing out, there are wiring fees to bank accounts on some exchanges. So you may want to chose an exchange where you have ACH setup so you avoid those fees.

-Security issues

When you are dealing with any significant amount of money and transactions, you have to be mindful of security. You would be just as careful if you had to go deposit thousands of dollars in cash at a bank. You wouldn't go do it in the middle of the night to a shady 7 Eleven ATM.

Same thing when you're cashing out your crypto. Do it at the exchange you trust the most, or open an account in a trusted exchange.

And you'll want to take all the precaution for that level of money, and do things like test transactions, double check the address, make sure you use the correct link of the exchange, have 2FA setup, put extra limits for cashing out, etc...

-Tax implication

If you realize significant amount of gains, plan out the tax implications for this.

Realizing major gains can turn your taxes upside down.

Maybe don't wait to cash out everything in 2025 when you think the bull run will go into full mania mode. Cash out some gains in 2024 already, so you split your gains between two tax years.

You also have to keep in mind other gains you have, and other losses. So this is gonna be different for everyone, and depend on other things that year.

With crypto, there is still no wash sale rules, so you can more easily harvest losses. There is likely gonna be plenty of volatility this year to take advantage of that.

But don't over-think it either, and end up missing out on gains, because you were waiting to save $5 on taxes.

You don't want to end up doing something penny smart but dollar stupid.

-Additional rules, caveats, etc...involved in making large transactions.

Luckily, the new IRS rule for $10K crypto transaction has been delayed and won't be enforced this year. Plus it's business oriented anyway.

But depending on your country, you can have either laws, tax rules, or red flags triggered on large transactions to your bank account.

BSA regulation has banks report wire transactions of more than $10K.

You also have IRS regulation that requires transaction for any kind of trade or business to file a 8300 form.

These will usually not apply to simply cashing out your crypto from a centralized exchange under your name.

But I'm sure if you were to suddenly have tens of thousands of dollars drop on your bank account at once, it might set off some flag somewhere.

-Other ways to cash out

An exchange is not the only way to cash out your gains.

Cryptocurrency is still...a currency.

There's plenty of places that accept crypto. Most of it is online, but even if you want more choices for brick and mortar merchants, there's more options now with BitPay, Flexxa, and Paypal. Keep in mind, some of those are not direct P2P payments, and may have additional fees.

If you got hit with the gold bug, you can pay directly with crypto to buy gold at the major online metals retailers, and they even give you a discount if you use crypto as opposed to paying with credit cards.

You can also buy gift cards with crypto (not sure if that's still available).

There are some realtors that accept crypto for real estate. But even if it's not advertised, you can always ask. If you're paying cash instead of mortgaging, it doesn't matter if it's crypto, some sellers will happily not deal with banks and mortgages. If they already have a crypto wallet and know how to use crypto, they'll know the advantages and the guaranty, and once they receive the payment in just minutes, they know they got paid and got the money.