Think before you invest in crypto

A simple, straightforward guide for the absolute beginner.

Chances are, you remember the intense gains that a number of crypto-currencies saw and also remember not taking advantage of the opportunity to invest before that happened. For many people, such as myself, when I first heard of Bitcoin, I was skeptical and didn’t understand the nature of the beast or its potential. When I heard that Bitcoin had hit $5,000 and kept going up, I was extremely frustrated. I chose not to invest, thinking that it was a trend that would fade away, quickly. It did not.

While rapid, major fluctuations have continued to occur, again and again, I’ve begun to think about things a lot differently. The truth is, crypto is here to stay. We will more than likely continue to see fluctuations such as the ones that Bitcoin (BTC), Ripple (XRP), Ethereum (ETH), and Stellar (XLM) have seen in the past year or so. There are developments occurring in each of these ecosystems’ that will prove greatly rewarding to investors who are able to be wise in the development of their portfolio.

So without further ado, here’s my guide for new investors who would like to diversify their portfolio and see returns with their crypto-currency purchases. I myself am fairly new to this but I’ve been able to quickly get up to speed and have a few tips that will help you get started even faster than I did. Bare with me, as I am still learning. I welcome any and all feedback below. Please do not forget to show me some love! I need claps and shares!

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Why should I invest now?

Near the beginning of January of this year (2018), Ripple (XRP) hit $3. That was an all-time high for the crypto-currency. The coin now is around $0.45 cents. For some, this can be a big turn-off. That’s because you’re thinking of crypto like you would think about pink-sheet penny stocks. When a company’s stock drops that considerably in a year, especially due to debt and other poor circumstances, it would indeed be highly risky to throw a lot of money into shares of that business. A wise gambler would put a small percentage of their available funds into the shares and see where it goes from there. If it tanks, even more, you lose, minimally. If it goes up and you get out at a reasonable time, you have gained quite a bit.

In the world of crypto-currency, the landscape has been shifting and molding in a number of ways. The most popular coins have made their place in the top-crypto rankings because of what they’ve done and what they’re going to do. For example, Ripple has been making a lot of moves in a direction that, according to many vested investors, makes XRP a safe long-term investment. If you’re not in it for the long haul and just want to see a percentage gain and get your money out, there’s a place for you too.

Have you ever heard of Sibos? It “is an annual banking and financial conference organized by the Society for Worldwide Interbank Financial Telecommunication (SWIFT) in various cities around the world.”. It’s a pretty big deal. According to Wikipedia, in 2016, it had “8,300 delegates from 158 countries”. Ripple (XRP) will be one of the exhibits. They’re creating partnerships with some big names that have yet to be announced. The date of the next conference is October 22–25, 2018. That’s in a few days.

So what can you expect? We all know that news can affect the stock market, right? They can affect crypto-currency prices as well. Significant upward trends are expected near the time of that conference. Even if it doesn’t go up as far as some people have predicted, which is always possible, there’s solid evidence to support a potential upward trend in the coming months. Take your gains where you can get them.

All of this information and any more you would need to feel comfortable investing in a crypto-currency are easily accessible online. I will be linking to reputable sources later on in this article. So don’t take my word for it. Do your own research, too!

At the end of the day, if you have money to invest, it isn’t going to do anything sitting in a checkings account. You have to be proactive when diversifying your investments. A career is an investment. A savings account is an investment. Your education is an investment. If your bills are paid and you’re just stacking money into a checkings account, why not do something more with it? Regardless of your interest in crypto-currency, there are so many ways to make your money turn into more money. This is capitalism we’re living under, people. :P

How do I even get started?

I see this as a question with a multi-part answer. You have to first ask yourself these questions.

1. How much time do you have to invest in your investment?
2. How much capital do you want to invest?

Invest in your investment

Learning the ins and outs of trading can be a lot of work. You have to do your due diligence in the currency, exchange, strategy, and so on… You want to make good decisions so that you can minimize losses as much as possible (which can and will happen). You need to learn the current landscape a bit. Do your research on the most popular coins, new ones that are rising in popularity, the tools that people use and the history of it all, as well.

Learn about strategies for wise investments. Learn any potential laws that exchanges follow. Learn about the stock market. Don’t forget to get your hands dirty, too. You will build the confidence you need to succeed by making trades. Luckily, the minimums for getting into trading crypto are generally a lot lower (if any). For example, some exchanges require you to deposit a certain minimum number of coins/tokens. That number may vary based on the price that they’re trading at. Learn it all. Knowledge is power in this game. Successful investors invest in their investment.

Here are a few links to get you started…

If you don’t have the time to invest in your investment, consider other options. There are things called Crypto Funds and they are growing in popularity and reputability. You have the option to invest in a fund and have much more experienced traders handle the hard work for you. You would expect to see a lot higher percentage each year than say if you were to have a savings account. Some of the gains I’ve seen are incredible and put traditional investment opportunities to shame. This doesn’t mean that everyone should do it, but know that the option is there.

How much do you want to invest?

To answer this, simply, I’d say that you should invest whatever you can or desire to at the time. This greatly depends on the research you will do up until the moment you make your first trade. Before you ever put a dime on an exchange, you should know what you’re looking for, feel comfortable trusting your money with that exchange, and so on.

If you want to put a few dollars in, you’re probably not looking to buy BTC. At the time of writing this, BTC is around $6230. While the price of BTC has been double of what I just mentioned, it has also been lower. It’s widely popular and you can expect to see roughly between 0.1% and 5% swings, up or down, on a daily basis. 5% of $10 is 0.50$. That could be profit, assuming it goes up that much and you decide to sell at that point. If you’ve done your research and believe that BTC will continuously go up, you could invest a hundred bucks (it is possible to buy fractions of crypto-currency) and wait for a 10% gain from the time of your purchase. Don’t make a decision to hold, however, without also making a decision to let go if the price goes down. I think it’s safe to say that if you have an ideal selling price above the price at which you bought, you should have an ideal selling price below, too. That’s called a stop-loss order.

If you hear a bunch of good things about a number of crypto-currencies, you certainly could throw a fraction of your portfolio into each of them and ride the waves until one does what you want it to, leaving you with a massive return on investment. The problem is that by the time you hear about a currencies potential, the price could spike up enough before you buy any that it could greatly limit your profits. You have to be on top of things in this game. If you want to stick to a single currency, one of which you have a lot of faith in, you can do that too. Scalp traders, for example, make many trades a day, capitalizing on small gains and hopefully minimizing losses. If a lot of trades are happening and the price is fluctuating consistently, there is opportunity there to profit.

You don’t always have to invest capital, by the way. Depending on your interest level, time restraints and commitment, you may want to contribute to the growth of the crypto-currency you’re investing money into. A lot of crypto software that is being used is open-source. If you’re a developer, you can go contribute to their codebase. If you have marketing skills, you can find ways to leverage that to benefit the crypto-currency you’ve fell in love with. For example, I am a developer and I like to write. The example I used, above, as a reason to invest, described the reasons one would invest in XRP. That’s a calculated move on my part to get people interested in XRP. I also am writing an application that will help me automate parts of trading. I could open-source that application if it grows into something that could be beneficial to the community. That would mean that other people could use it and even build functionality into it based on their needs.

If you don’t have a lot of money to invest but you’ve traded quite a bit in small amounts and have familiarized yourself with the process, you could try to join or create your own Crypto Fund. Joining a fund would be a good idea if you have the opportunity because the hard work has been done for you and you are left to trade (usually). If you have the resources to start your own fund, then go for it. If you succeed in your efforts, you will have access to more capital…but with great access comes great responsibility… If you’re anywhere near that comfortable with all of this, I don’t know why you’re reading my silly article anyways. :P

To sum things up…

You have to go out there and experience things yourself. This is what it means when someone says “gain experience”. Go find an exchange you trust (I currently am using CEX), get your account verified and make some trades. If you’ve never done this before, it can take some time getting used to. Study as much as you can about their tool, though, first…and the crypto-currency you’re going to trade…and everything else. Study study study.

To see returns, you need to make smart trades. Sometimes things can happen out of your control and you will fail. Minimize those losses. The more you know, the better decisions you will make. You can gain the knowledge you need in many ways. Stay on top of the news with anything relating to your currency. Study how certain types of news has affected the price in the past. Talk to people more experienced than you, too. They will have good insight to share, usually. I can’t tell you exactly how to make money from this. I can just show you the way to get started. Like I said earlier if you are interested in seeing some theory and case-studies or anything else I release, later on, follow me on Medium. Those articles are coming soon.

In the future, I definitely will be writing on strategies that I use when trading and the plan is to go into much greater detail about my successes and failures. I plan on using Medium as a platform to log my experience and as a gateway into the community. I encourage you to leave whatever feedback that you wish. Ask me questions, tell me where I’m wrong and show me some ❤!