Investing In Cryptocurrencies 101
Before talking about investing directly, we need to talk about the historical perspective of cryptocurrencies that will help you more in appreciating this invention.
History Of Cryptocurrencies
This goes back to the global 2008 Financial Crisis and when you talk about it, you can’t avoid without mentioning Bitcoin. In the month of October 2008, a paper was published on The Cryptography mailing list by an anonymous guy under the pseudonym “Satoshi Nakamoto“. Until today, the real identity of Satoshi Nakamoto is unknown but there are some fun facts on Satoshi Nakamoto which you can read here. Bitcoin was invented to put a full stop to insidious modern day banking and to create an alternative for people who wanted to opt out of the banking system. It was not a mere coincidence that Satoshi created and announced Bitcoin just after the financial crisis of 2008. In my opinion, and in the opinion of several other tech-economists, it was an all-out attack on the central banking system, a system that has become incompetent as well as insidious.
Satoshi Nakamoto-labeled text on the Bitcoin genesis block clearly indicated that after the 2008 bailout of banks, the crisis would hit soon again. The text of the label was “03/Jan/2009 Chancellor on brink of the second bailout for banks”. Bitcoin was actually created to provide people the alternative to modern day banking and saving them from the inflationary policies of corrupt governments. It was also created to show the world that decentralized trust can be created if backed by solid mathematical models – cryptography. Hence, Bitcoin, the world’s first cryptocurrency, was created. Since then, this space has progressed by leaps and bounds. Today, we have more than 1500 cryptocurrencies around us. If you don’t trust me, take a look at the number of coins listed on CoinMarketCap.
Get Your Mind Set For A Roller-Coaster Ride
Important: Crypto isn’t for the weak hearted. Don’t blame me later for not warning you. If you are getting into the crypto world, be prepared for a roller-coaster ride because it is a wildly volatile asset class. If you can’t handle a drop of 80% and then ride a wave up to 200-300%, this is not the place for you. Also, if you think you will reap benefits to the tune of 300-400% on your investment in a matter of days, you are grossly mistaken. There are no guarantees, and a lot will depend on your knowledge, risk appetite, and luck.But you know what, I deliberately missed one year: 2014. In that year, Bitcoin prices plummeted, incurring a 62% loss to investors. Also, at the Ever since the start of 2018, Bitcoin has lost its 69% value. This is just to give you a fair idea of what you are getting into.
Never Invest More Than What You Can Afford To Lose
That is the basic rule of any investment. Never invest more than what you can afford to lose. I am saying this because I have witnessed first-hand the wild volatility of this market and know quite a few people who have a lost a lot by investing more than what they can afford to lose. If you don’t follow these basic investing principles, you may end up like some of these people: This all not to scare you. Instead, this is to warn you about the wrong mindset people have which results in losing a lot of money.
Don’t Fall For Scams
Usually, people are lured by the fact that crypto is a get-rich-quick scheme and there would be LAMBOS (a funny acronym used for Lamborghinis in crypto space). But is that really true? Yes, it is. Early investors have already made a huge amount of money. And out of these super rich guys, some will launch their own crypto MLM scams just like Amit Bhardwaj, who scammed many people of millions of dollars. That’s why you need to learn how to discern common cryptocurrency scams and invest only in good coins. (Read: 7 Most Common Types Of Cryptocurrency Scams & Tips to Avoid Them) This brings us to the next topic of finding coins that have a use case as well as decent chances of price appreciation.
Only Invest In Unicorn Coins
Do you know our habit?
We don’t invest in coins that we haven’t researched. Having said that, we don’t gamble and always do a thorough fundamental analysis of prospective coins that we think are worth buying/selling. And so far so good, all the coins that we have covered on CoinSutra are doing pretty well. That doesn’t mean you should blindly follow us as we are not your investment advisors. But we can give you a head start in the right direction. So far we have covered more than 20 cryptocurrencies that we believe have a good use case. Here they are:
Find Out Reliable Exchanges If You Don’t Want to Lose Your $$$
Fake and unreliable crypto exchanges are the most common cryptocurrency scams you will see happening in this space. Also, you will find that exchanges without proper security measures are sure to get hacked sometime or the other. Here are the testimonials of the top 5 Biggest Bitcoin Hacks Ever that speak for themselves.
Well, anyone would be because exchanges are the first point of contact from where we buy/sell cryptocurrencies. That is why one needs to pick them carefully. For this task, you can rely on CoinSutra completely as we thoroughly vet crypto exchanges before using them ourselves and recommending to our audience. Here is the recommended list of exchanges:
- Binance: Offers mobile app and probably the fastest growing exchange. If you need to pick only one, this is the best and #1 in 2019.
- Bitmex: The whale of cryptocurrency exchanges. You can do margin trading if that’s your thing.
- KuCoin: One of the strongest exchanges that also offers a mobile app. They have been constantly updating their mobile app to make it one of the best in the industry.
- Gate.io: Many new cryptos can be found here. Unique approach and something you should sign up for in 2018. Also offers mobile app just like KuCoin and Binance.
- Changelly: Perfect for quick crypto exchange. Easy to use and great for beginners.
- Bittrex: Another high-quality exchange with lots of coins.
For Buying cryptocurrencies using credit/debit card.
- CEX: My favorite
- Changelly: Reliable
- CoinMama: Old but gold
Now that you know where you can get your cryptocurrencies, it makes sense in talking about what you can do with these to maximize your profits.
Profit Making Strategies In Crypto
Once you get hold of your cryptocurrencies depending upon its category you can do a lot many things to maximize your profits. Some of these strategies are:
#1. Buying & HODLing
#2. Buying & Holding Cryptocurrencies For Dividends
#3. Stake Cryptocurrencies
#4. Run Masternodes
# 5. Day Trading Cryptocurrencies
# 6. Airdrops: Cryptocurrencies Airdrops- Everything You Need To Know
#7. ICOs (beware of ICO scams): 5 Tips For Beginners Before Investing In ICOs
#8. Mining (Not feasible, initial investment high)
There are various methods of earning profits by investing in cryptocurrencies, and the same has been discussed in detail in our guide Top Ways To Earn Money From Cryptocurrencies.
Lazy Enough To Ignore Crypto Security: Better Don’t Invest
If you are too lazy to follow the basic standards of online digital security, crypto isn’t your field.
- Have good HD wallets
- Use Hardware wallets like Ledger Nano X and Trezor
- Have 2-FA authentication On Mobile Always
- Password Managers like Dashlane
- Firewalls & Antivirus
- Seed key back-up
- PIN code and Passphrase protection etc…
Also, always use the best wallets that allow you to control your funds and avoid using hosted wallets where you don own your private keys. It is so because:
If you don’t own your private key, you don’t own your cryptocurrencies.”
Also, learn about basic security tenants here, here and here because we have written these only for you. Portfolio Management Is A MUST In Crypto!!
Now, you have picked the winning projects, learned the security measures and picked the right wallet. But one thing is still left… Any guesses? Well, no prizes for this, as now the only thing left is how to track your investments and get insights on your profit/loss status as the market is always moving. That’s where you will need a crypto portfolio management tool.
- Investors can use something as simple as CoinTracking
There are plenty more, but these two will serve your purpose well. However, if you are extra choosy, don’t forget to take a look at our exclusive list of Best Cryptocurrency & AltCoins Portfolio Management Apps of 2019.
Self-Eduction Is The Key To Monetary Sovereignty
Crypto is all about your own monetary sovereignty by being your own bank. If you are not up for it yet, educate yourself more on this until you get it. Because if you get hacked or lose your money, no one else is to be blamed other than you. But that doesn’t mean you should get scared and do nothing. Instead, I would say start small and try to grow from there.
Always keep a tab on news and rumors because the crypto market is highly influenced by that. Doing this will help you make better strategies for buying/holding/selling particular crypto.
Don’t spoil your health by sticking to your laptop for 24 hours. Instead, stick to a model and follow that regularly for successful investment habits.
Going back to why it started: It started to free people from the banks and traditional financial system. So if people don’t learn about this new approach to money, i.e. cryptocurrencies, it would probably fail. Therefore, extend a hand to help people learn about it so that cryptos can thrive.
Last, but not least, there are some bonus tools and services that will help you in monitoring price, development status, news, the potential of a coin, and volatility of various coins throughout your investment journey. And for this we have listed 6 Tools Every Cryptocurrency Investor Must Have From Day One, so go through it and share it with your friends.
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