How do you get started investing in cryptos? How do you do your research, and how to pick the right coin? What do you watch out for?
This question was asked on Quora today, and this is my answer:
It sounds like you’re just starting out. If that’s the case, I’ll share some experience based on being involved in bitcoin for just over 4 years.
For a complete beginner, Coinbase is the easiest way into the market, where you can buy Bitcoin (BTC), Ethereum (ETH), Btcoin Cash (BCH) and Litecoin (LTC) using Fiat currency from your bank account.
If you use this link, we both get $10 free BTC: Coinbase
It is just my opinion, but although BTC has many limitations in terms of transactional speeds, it is limited in supply and demand is still in its early stages. As a store of value, it has yet to reach it’s potential so the advice (I’m not a professional financial adviser in any way, so please take this as my opinion only) I’m giving to friends and family is this: buy an amount of BTC and ETH (only an amount you’re willing to lose) and forget about it.
It’s entirely possible that the value of BTC at least could surpass $500k (especially if you listen to John McAfee):
I think ETH will continue to rise also simply because of (a) the amount of practical use it currently provides, especially to ICOs (Initial Coin Offerings) and (b) because Vitalik Buterin and the other guys behind it are aware of it’s limitations and are constantly evolving it. This is a really good interview with Vitalik which gives a great insight into his thinking and philosophy:
The other thing to note is that when “forks” happen, like BCH, you get free coins if you’re already holding a stake, so it’s all Brucie Bonus from that point of view.
In terms of trading on exchanges, this is really not for the feint-hearted or those with time limitations. I know traders who have made and lost fortunes in seconds and really it’s a full time job for them, getting up at all sorts of weird times to maximise gains on Eastern exchanges like Binance. The place most traders go to when they wake up in the morning is here: CoinMarketCap
The biggest financial opportunities for an average guy like me at the moment is in ICOs. These are the mechanism by which where Start-ups are using crypto to raise the money they need to get their projects off-the-ground.
They create new tokens – a limited supply – then issue them privately or publicly to investors at a discount. The majority of these investors are “flippers” who want to see a big and fast return on their investment when the tokens start trading on the exchanges.
In 2017, ICOs raised over $3.3 billion.
It’s an insane market, and this article gives great insight into how it’s possible that a coin like NXT got 1,477,000% ROI (that’s NOT a typo, and it’s not the biggest ROI in the space): Top 5 Biggest ICOs (by Return on Investment) – Bitcoin Market Journal
This infographic explains ICOs very nicely as well: Initial Coin Offerings – Infographic
The way to judge which ICOs are the best in 2018 are simple:
1. Subscribe to as many newsfeeds as you can to increase your daily intake of general knowledge about ICOs and Crypto
2. Follow people who have been around for a long time and know what they are talking about. People like Simon Dixon who has done a huge amount of work in bridging blockchain with the mainstream, wrote one of the best books on crypto Bank To The Future, and also runs BnkToTheFuture which first got me personally investing in crypto. Watch some of their videos here: BnkToTheFuture.com
3. Remember to only invest in things you (a) understand and (b) trust. I had the chance to be a seed investor in a company 3 years ago which is now soaring, but I declined because I didn’t fully understand what they were trying to do at the time. Am I kicking myself now? A bit, but the risk was too great then for me, so I made the right decision. A good ICO is all about the idea and the team working on the idea. The best Start-ups and biggest opportunities for me are all about those that are providing the shovels in this gold rush (actual coders) and those that are creating the blockchain collision i.e. bringing the blockchain to the masses – something that will happen when privacy issues are resolved.
4. Stay away from Ponzi schemes or MLM
5. Hang out at crypto meetups – this is one of the best ways to get information on what is hot in the crypto community. I’ve learned more in bars after meetings than any amount of online research can ever provide.
6. Understand blockchain is not a fad and try to avoid mainstream media opinions on “bubbles” and such-like. This is a great interview with James Altucher that explains this perfectly:
This is why I recently recommended investing in CommerceBlock because they are all about infrastructure, and why I’ve given over six months of my life into making HiP Interactive Property a reality, because that idea will make the property market liquid, open up an entirely new capital market, bring fairness to the way we buy and sell property, get young people onto the property ladder faster through partial ownership and allow people to access their equity without selling, moving or taking on extortionate interest rates on further debt. To learn more about HiP go here: https://www.hip.property/
The HiP project will be in Singapore at the Blockchain Economic Forum next week (details here: BEF 2018 | Blockchain Economic Forum 2018 Singapore 4-6 Feb)
As HiP is a blockchain collision project that’s truly decentralising and bringing this technology to the masses, it’s summed up nicely in this short video:
The kind of standard you should be looking out for can be summed up in recent/current ICOs like WePower and BeeToken. Take a look at them and use them as a benchmark for anything you research in the future.
Blockchain is still a puppy, it ain’t going away and it really can shake the world up, maybe beyond anything we can currently imagine.
Personally, I like to recommend investing in things that have the potential to make the world a better place and that make the system a fairer place for everyone to participate in, rather than the 0.001% who control the banks and global corporations. It’s an entirely new way of thinking, but once the penny drops….
So, you can make short-term gains, but it’s my opinion that the whole crypto space is just getting started and vastly under-valued, which is why I’m a long term holder in the main.
Whatever you do, welcome to crypto and best of luck on your journey!
If you get a moment to upvote this article on Quora, that would be appreciated here.