Today, you will learn valuable insight and tips for cryptocurrency investing. This fast and simple guide will inform you of what you need to know before you go all superman crypto trader on us. 🙂
Most Important Tip for New Cryptocurrency Traders
Photo art by Sandro Leva
Like anything in life one simply does not just invest in anything without knowing what they’re investing in. Just keep that in mind and don’t get caught up in the fear of missing out (FOMO) that most people feel. See, they jump on the bandwagon and then they think they’re going to make it big. It’s like, “I heard my friends investing in this cryptocurrency, so they jump on it too, for fear of missing out on the next big thing, without even understanding the market.
What ends up happening is you buy rubbish, complete rubbish. Cryptocurrency investing takes smarts and research not to lose your ass, much less to make the big money. Don’t worry, I’m going to give you some useful tips.
So the first tip before beginning your journey in cryptocurrency investing is, DON’T. I’m not saying not to invest in cryptocurrency ever, or that crypto trading or speculating is terrible for you. What I’m saying is don’t spend your hard earned money in a space you don’t understand. I wouldn’t invest in anything unless I truly know it.
If you don’t know what Bitcoin, altcoins, or anything to do with cryptocurrency is, or you ask yourself, “What the hell is a blockchain,” then you’re going to get murdered in cryptocurrency trading.
I think Andreas is the best to learn about this kind of stuff. He is a powerhouse of knowledge when it comes to cryptocurrency and the blockchain, and he explains it well. Check out his video on the blockchain below:
Once you have a grasp around the industry and the technology, then you can get started. Granted, you can visit my site often to get advice without the hype. 🙂
Know your cryptocurrency investing strategy
You have to know how risk-averse you are. Matter of fact, this is one of the first things you need to know. And mostly, this is based on how much money you have available to LOSE in cryptocurrency trading potentially.
Also, you have to know whether you are in for short or long-term. And you must know already, before entering the market, at what price you will buy and sell at, both high and low.
Look, there are too many variables regarding an individual trader. It would be challenging to explain one sure-fire way to trading success, even though the #cryptogurus might want you to think otherwise.
When is comes to cryptocurrency investing, I always tell people to start small. I think if you put five hundred dollars in you will be okay, whether you win or lose. Because, whether you’ve been investing for a while, or you’re a total beginner trader, if you study the space you’ll see and understand this crazy volatility especially now in cryptocurrency season. It’s crazy all over, so my suggestion would be to start small, like five hundred bucks. If not that, then a minimum of $200 if you just hold Bitcoin or Ethereum, or rather fractions of these at the small of an investment.
Open Your Cryptocurrency Account
Source: BTC Sessions via YouTube
You’ve done the research based on your level of understanding, so now it’s time open up that account on a single cryptocurrency exchange. It doesn’t matter which one. Coinbase tends to be the easiest one for beginner cryptocurrency investors to start on. Other popular ones are GDAX and Kraken. Moreover, they’re both easy to setup and verify your accounts.
Deposit money into a cryptocurrency exchange
Photo art by dec
Deposit some money and not a lot, mind you. Don’t start big. People think they become wealthy investing in crypto right off the bat. That’s not the case. You don’t just become rich by doing nothing, or only putting some money into an altcoin. There’s a process; there’s a strategy.
So, you connect your bank accounts to Coinbase or Kraken and you deposit your $500 of fiat currency and receive your dollar amount back in Bitcoin (BTC), or you can split your deposit and get some BTC, and some Ethereum (ETH).
I suggest you buy ETH because you apparently get more for your dollar. But regardless, keep your stake in ETH or BTC. Even though there is a lot of volatility, they are still roughly safer than the other cryptocurrencies.
Continue to research altcoins and blockchain
Illustration by Forklog
Great. Now you have 500 bucks. Let’s say you have $250 in Bitcoin and another $250 in Ethereum (ETC). The next thing what you want to do is to continue researching and educating yourself on the other altcoins out there. There are thousands out there, so I’m not going to name them right now. You can do your research, but pick one and find out why that cryptocurrency exists in the first place.
Find out the team behind it. Find out what problem the company will solve. It’s a lot of work, but it will make you a more confident trader. This step is the big one from noob to an intelligent trader.
Here is a great video from one of my favorite cryptocurrency YouTubers, Boxmining, where he talks about how to objectively look at blockchain opportunities:
Watch your ass and don’t crypto speculate
Illustration by Forklog
See, you have speculators, and speculators, well, like speculating. If you don’t know what speculating in cryptocurrency means, then you check out the Wiki on speculating. Let’s just say they aren’t risk-averse like you and me. 🙂
But getting back to my point, you need to understand some basics of market demand, and general supply and demand before you do short-term crypto trading. You need to under all the different layers, different variables, different teams, different individuals and institutions manipulating the price. Cryptocurrency markets, at their basics, are no different than anything else as far as markets go.
You have to understand all these different layers if you’re doing cryptocurrency investing right, so do your research on each and every single coin. Do your research on every single company’s altcoin and just make sure you have a firm understanding of the space.
Cryptocurrency investing long-term (for now)
Art by Mohammad Shahebaaz
For example, if I want to start investing in coins or Initial coin offerings, I’m going to do some significant research into these companies first. And I’m going to go further and understand the space they are trying to solve. So, I might look at Cardano, EOS, or TRON for example, and see what problem they are solving and what is the market demand for their solution.
As a side note, I love Cardano, and I own a lot of ADA because I did my research and I BELEIVE in their answer to the blockchain and company’s mission. There are many other altcoins out there that want to achieve similar results, but Cardano, in my opinion, is the only one that actually is close, and is building the right blockchain to get the job done.
So, I’m going to find out who’s on their team, and what is the background of the group members, particularly the driver, i.e., the CEO or Founder. I’m going to read up on what their plan is, and what kind of technological advantages are they seeking. I need to know all of these things before I invest.
So, I suggest you do the same and examine and understand cryptocurrency.
You need to reach out to the crypto company
Photo by Markus Spiske
Many of these cryptocurrencies have public sites. If they don’t, I pass automatically, because how else am I supposed to research them. It’s 2018, so I expect a website with a whitepaper and a lot of communication, and not just marketing material either.
Send them an email and communicate with the founders, and the dev team, and figure out what’s going on internally. Join the company’s Slack channel if they have one. Join their facebook page, or ask them a question through Twitter. Get to know the team, if you’re thinking of investing.
Engage in the cryptocurrency and blockchain community
You need to talk to people a lot. This is a good list from reminescu over at Steemit.
There’s a lot of good Facebook cryptocurrency groups to join. Do that for your favorite coin and continue to check out a bunch of different resources. Commit to your learning and join the conversation in different communities and see what these individuals have to say. See past the hype, and listen to what others have to say about what these coins are and should be doing. Just make sure you read a lot of cryptocurrency news to further your education.
Sit back and enjoy owning your Bitcoin
Every quarter calendar year you look at your current cryptocurrency investing portfolio like you would with any other investment. Maybe it’s a little up, or perhaps a little bit down. But at least you can look at the previous three months and see the historical data for those and make a better decision on what to do.
Maybe you’re going to move a little bit to this coin and move a little bit to that interesting coin. It’s not complicated when you do it like this instead of listening to every YouTube cryptocurrency guru trader with the latest, breaking indicator of the latest breakout altcoin or ICO. 🙂
What you’re doing is making small baby steps. But these baby steps gradually increase to bigger steps, and gradually increase into huge enormous steps. You might just go from $500 investment on the next big thing and have ten thousand dollars or $100,000+ earnings in cryptocurrency.
People have lost millions of dollars in cryptocurrency investing at this point, because of greed. Greed is very dangerous, so you don’t want to be greedy. You want to be slightly risk-averse. You want to minimize your risk as much as possible. So, remember step one?
I hope you liked these tips. Please consider sharing it via my social media. If you have any questions, please feel free to comment below.