Crypto? Blockchain? Smart contracts? DeFi? Ledgers? Wallets? How much do you know about these topics and would you like to learn more? Investing in cryptocurrency is a hot question on lots of people's minds these days and I'm here to simply offer what I've learned over the years.
I've been talking more openly online recently about my cryptocurrency investing journey. Frankly, I was a little surprised by all the questions, messages and texts I received from friends, family and acquaintances. The curiosity of how to invest in Bitcoin or cryptocurrency, in general, was high! I guess it's one of those things where "what's ordinary to me is extraordinary to someone else."
Thus, I've gathered many of those questions, thoughts and resources I'd like to share here about cryptocurrency investing. Also, I have some referral codes for free Bitcoin if you want to start with as little as $100.
Interested in asking questions and learning more? Feel free to email me after reading this post on cryptocurrency investing.
I was fascinated with the idea of Bitcoin and blockchain back when I first heard of it, around 2014. I remember reading a lot, trying to wrap my head around cryptography and was perplexed by the complicated nature of what I was reading. But I was still fascinated with the underlying technology. I just wasn't sure about Bitcoin itself.
At the time, I didn't have much to invest, was more risk-averse and so I didn't dip my toe in the water. Yes, kicking myself in the pants on that decision now! The 2014 average of Bitcoin was about $400 (at the time of this article, BTC is about $50,000).
I remember tabling the idea in my mind as I focused on growing my businesses, investing in real estate and just the busyness of life in general with 4 young kids. Fast forward to late 2016. I wrote down some goals for the next year and one of them was "get active and start investing in Bitcoin or blockchain projects".
So, at the start of 2017, after much reading and researching, I decided to take 2% of my liquid net worth to invest. I bought my first several Bitcoin, some Ethereum and Litecoin (BTC, ETH and LTC) using Coinbase. I was in the game!
Cryptocurrency is quite volatile. I've invested in stocks and ETFs for years and those are stable compared to investing in cryptocurrency. There would be price swings of 10+% easily within a day. It was a wild ride but I stuck with it.
I'm a big believer in de-risking a speculative play. So I had a goal of taking my investment off the table as soon as it doubled. That happened in the same year so I took my money out and then was playing with "house money". (Boy I sure wish I still had all the Bitcoin I originally owned!) But, now I felt much more confident as I was using free-ride profits. I propose you have a similar approach. (Remember, I'm an ordinary Joe - no license here to give financial advice.)
Crypto, blockchain, smart contracts, ledgers and decentralized finance have been with us for many years. They are now exploding. There have been obvious ups and downs, but a lot more legitimacy and interest has been given recently, especially in 2020 and as we start 2021.
The past two years have seen major financial players, institutions, endowments and billionaires quietly positioning themselves in this space. We're now starting to hear more about it vocally with the likes of Fortune 500 companies beginning to slowly embrace and understand applications of these technologies.
Do you know the implications of corporations putting just 1% of their cash reserves in these technologies? Or what it would mean for the price of cryptocurrencies if 10% of their cash reserves - like Tesla recently announced - were put into these? Jaw dropping numbers. Very smart financial powerhouses have said that Bitcoin would be $500k or more simply if that happened, much more if more individuals enter the market. (Did you know as little as 5% of Americans own any Bitcoin or cryptocurrency? What would happen if that doubled or more?)
Many smart and savvy investors are likening all of this to trying to explain the exciting and revolutionary concept of the internet back in the 1980s. How exactly do you wrap your head around how this thing works? How in the world could we see massive adoption on scale? How could this be used in everyday life? But isn't it too late to get in now?
Those were the same questions in the late '80s - and now we can't imagine daily life without the internet. Are these people correct in that blockchain, smart contracts and decentralized finance will become the new internet? Are you ready?
I'm not going to get into the technical nature of trying to explain all of these technologies. You need to do that for yourself. I'll point you to some good resources and helpful info:
-Great history and detail of Bitcoin on Wikipedia
-Blockchain on Investopedia
-I get ongoing news and info on the technologies and cryptocurrencies through CoinTelegraph, DailyHODL, CryptoGlobe and others.
The questions I've been fielding have centered on "how do I start investing in cryptocurrency?" You can start with as little as $100. You can own a tiny fraction of a Bitcoin or any other type of crypto. Start there. Only invest what you can afford to lose. (like any stock).
I do recommend two particular cryptocurrency exchanges. Think of these as like the stock market exchanges of cryptocurrency. You can buy, sell or trade on these.
The other exchange I recommend and use more than Coinbase now is called Voyager. Think of Voyager as like the Robinhood of crypto. They are more nimble, no fees, have an app-based trading platform and support 50+ altcoins now. Coinbase doesn't serve that many and has some nominal fees.
I like to do some trading with the volatility so I find Voyager to be a great tool for this as well as my longer-term holds. You can get $25 in FREE Bitcoin when you sign up with my referral link. Or use code CHR69F. A major plus in Voyager is you can earn interest on the coins you hold there. You can earn as much as 9.5% APY interest on certain coins - that's massively more than you're earning on your cash in a traditional bank!
I also started speculating a small amount of money in interesting start-up coins that I believe are promising - like this one called Student Coin. The risk/reward is huge. I could lose a couple hundred bucks or could make tens of thousands, we'll see.
A lot more can be said about cryptocurrency investing, blockchain and all related technologies. I'll leave more for future posts. For now, do your own research with some of the above-mentioned resources. Then get in the game! Buy on Coinbase or Voyager - or both like I do! You'll even get $35 in free Bitcoin if you simply sign up and start.
Start slow if you want and remember to not risk more than you can afford to lose. Will BTC go to $100,000 next or drop to $20,000? I don't know. If I look out at a longer time horizon and what these technologies can do I'm quite optimistic. I believe they will revolutionize industries. But I also know I may need to stomach some wild price swings along the way.
Make volatility your friend. I personally subscribe to the dollar-cost averaging methodology. You can make regular, recurring investments each day, week or month to invest a dollar amount or particular coin amount. I did this with buying .05 Bitcoin when I first began. You can do it with .01 BTC now if you want.
Like the Chinese proverb says, "The best time to plant a tree was 20 years ago. The second best time is today."