New Adventures in Cryptocurrency

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The other Altcoins I invested a small position in is called Binance – https://coinmarketcap.com/currencies/binance-coin/. I bought Binance [BNB] based on a recommendation from a channel I follow on YouTube and some further research. It has probably been the most volatile of my holdings, having moved from around 99 cents to close to $2 just after my purchase. At the current time it’s hovering around $1.50, having been as low as 80 cents approx., immediately after China started banning ICOs and regulating domestic exchanges. Binance.com is itself an exchange. The Binance coin was created as a currency that could be used to pay for exchange fees. It is based on having a limited supply, initially set to 200m coins, but with an interesting twist. The exchange plans on buying back half the supply, and destroying those tokens, in order to limit the eventual supply to 100m coins. It may sound odd, but Binance is not the only coin that works this way. Several ICOs also plan on destroying a percentage of their own currency in order to restrict supply.

My investments in ETH, IOTA and Binance were all made in a relatively short period of time, around August 2017. I had wanted a position in Bitcoin, and saw the drop to around $4100, from close to $5000 in September as a good time to buy. That didn’t seem too clever after the China and Jamie Dimon FUD [it means Fear, Uncertainty, Doubt – another crypto parlance you will quickly get used to!] saw BTC drop to the low $3000s. As I’ve noted earlier, volatility is just about the only thing guaranteed in the world of crypto, so I’m currently very happy to see BTC pushing new all-time highs on the way to $6000. My entry at $4100 now looks quite good. I have no plans to sell BTC and will be adding to my position over time.

Wrapping Up – My Top Tips for Getting Started in Crypto Investing

If you’ve read this far it probably means you have more than a passing interest in Bitcoin, and the wider world of crypto currency. As a beginner, I found it less than easy to know where to start. There’s little doubt that the process will get much easier over time. New entrants are emerging with a mission to make the transition between fiat currency and crypto much easier and more accessible. The crypto currency market is now large enough that the mainstream media is taking much more of an interest, and it’s not going to be long before investing in crypto via ETFs [Exchange Traded Funds] is likely to see ever larger chunks of money moving from other investment categories into crypto. To coin a phrase [pun intended], Fortune favours the Brave. Don’t wait. Get started now, taking small positions in any of Bitcoin, Ethereum, Ripple, Litecoin or Bitcoin Cash, and either holding for the long term, or taking the time to explore the world of Altcoins and ICOs. Just be prepared for volatility.

Top 10 tips I’ve learned from reading, watching, and participating over the last 4 months

  1. Find an exchange you are happy with. One that quickly gets you verified to the tier you need. Without verification you may be limited to small trades, and you won’t be able to transfer more than around 2000 Euros/or $s at a time. Even if that’s your starting level you may want to make larger trades later so verification is a good idea. It’s quick and easy. Following my bad experience with CEX.IO I found Kraken.com, and have been much happier with them. My SWIFT transfers are usually available for trading within 24 hours.
  2. Get started with the mainstream coins based on the top 10 coins by market cap listed on coinmarketcap.com. Don’t invest in alt-coins or ICO’s unless you’ve taken the time to understand their business proposition, the team behind the coin, and the valuation metrics. If you invest in either alt-coins, or ICO’s be prepared to either win-big, or lose big. The more research you do the better.
  3. Follow the advice of experts who have been in crypto for a long time [5+ years] and use a method called dollar cost averaging [see http://www.investopedia.com/terms/d/dollarcostaveraging.asp] It’s a method of slowly and steadily investing over time in order to arrive at an average price. Many in crypto will buy every week, regardless of the price. If you believe the market will go up over the long-term, this is a sound strategy.
  4. Learn that exchanges are based on pairs of currency. An early lesson I learned was that not all currency pairs had a market. For example, I sent GBP to my Kraken account with a plan to buy more ETH. I later found out that Kraken didn’t have liquidity for GBP/ETH so I had to bring the money back to my bank, and send EUR instead. The same applies to many of the alt-coins. Check which currency pairs your chosen exchanges support.
  5. Decide on your strategy and stick to it. My strategy is to take a long-term position in the expectation that crypto-currencies are here to stay, and that there is a very strong possibility of good capital appreciation over the next few years. I don’t expect to trade very often. Your approach might be different. Maybe you have a high tolerance to risk and will focus on speculative ICO’s and alt-coins. If you like risk you might want to monitor the trending coins on marketcap.com – https://coinmarketcap.com/gainers-losers/. Wow – did YoCoin really go up 4000% in 24 hours!
  6. Learn the discipline of not storing your coins on the exchange for any great length of time. While hacking incidents are rare, it is much safer to take control of your coins by storing them on your own wallet. Ideally, consider buying a hardware wallet such as the Nano Ledger S. You can find them here – https://www.ledgerwallet.com/r/afe6. If you prefer, you could also consider a software based wallet such as Exodus – https://www.exodus.io/
  7. Read, watch, learn as much as you can. I’ve subscribed to a handful of YouTube channels and have learned a great deal by spending a few hours a week watching and listening. Some of these channels have as much entertainment value as educational value. Here are a few links I would recommend;ByteSize Bitcoin – https://www.youtube.com/channel/UCnePINazJJpbn9FWaq_skQA. Run by a very amiable Korean American called Peter. He bought Bitcoin in 2011 for pennies and forgot about them. Also runs a great forum called TheBitcoin.Pub. He’s a little crazy but also very smart. Currently publishing a program called B90X which is 90 days of videos for beginners.

    DataDash – https://www.youtube.com/channel/UCCatR7nWbYrkVXdxXb4cGXw
    One of the larger channels with more than 65k subscribers. Very educational.

    Crypto Bobby – https://www.youtube.com/channel/UCt_oM56Ui0BCCgi0Yc-Wh3Q
    Rob from Crypto Bobby is often seen drinking beer while giving a run-down of the day’s crypto news.

    Crypto Daily – https://www.youtube.com/channel/UC67AEEecqFEc92nVvcqKdhA
    Another producer that goes the extra mile to add some entertainment value to crypto news.

 

 

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