Top 3 Tips for a Newbie Crypto Investor
By: Rivo Kienan
Tags: Investing, Blockchain, Business, Crypto, Tech

Bitcoin today, and all of the currencies that are built using that recipe, are at the same stage that the internet was in 1992. Only now we have the internet, and so the rate of exponential growth has already started. The innovation is growing at an astonishing rate. - Andreas M. Antonopoulos

Taking the first step towards something that seems complex and risky can be intimidating. Your own insecurities around investing coupled with never ending slashing and criticism of cryptocurrencies makes it even more scary. However, if you are reading this article, chances are, you have heard about Bitcoin and have been thinking about investing and being part of this new paradigm shift in technology.

I started my own crypto investment journey when everything went euphoric in 2017 and then watched my entire portfolio get crushed as cryptocurrencies entered a period of despondency. Although my journey into cryptocurrencies didn’t make me an overnight millionaire, it did teach me a lot about investing, financial markets, market psychology and patience amongst other things. It gave the encouragement to delve deeper and appreciate this growing technology trend. Learning about all the limbo in the industry such as FUD, FOMO, Lambo, HODL, When Moon etc. was an added amusement.

There is already a ton of information about cryptocurrencies out there. Having weathered the Crypto winter since December 2017, I have relentlessly continued to follow and learn about this new asset class and want to share my top tips that I wish I knew early on back then. These tips are relevant to this market regardless of when you read it and if you are already in the game, it’s never too late to take action on the tips below if you haven't acted upon them already.

1. Own Your Crypto

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You have done that initial research on the top Crypto exchanges and have gone as far as creating an account and buying your first cryptocurrency. As a newbie, that is a big step and congratulations for entering into this new world. But do you really own the crypto that you just brought? Not really!

For those who are bewildered by the above statement, I suggest that you start your research understanding private & public keys and crypto wallets. Be it Coinbase, Binance, Kraken, Gemini or any other exchange for that matter, leaving your crypto on an exchange means that you don’t have the private key to your cryptocurrency and hence don’t really own it.

Crypto industry has a very short memory in general, but veterans in the industry would remember the Mt.Gox fiasco in the early days and the more recent hack and closure of the exchange Cryptopia. Exchange crashes & hacks are prevalent and all sorts of scams are unfortunately a norm in this industry.

Educate yourself on using crypto wallets (I strongly recommend hardware wallets) and what it means to own your private key. Keeping your coins on an exchange might seem convenient but the last thing you want is to watch your cryptocurrencies stolen or become inaccessible right when the prices are at its peak and when you want to encash it.

Simple rule: Your key, your Bitcoin. Not your keys, not your Bitcoin - Andreas M. Antonopoulos

2. Do Your Own Research

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With over 5000 different crypto currencies coupled with constant coin recommendations on youtube and other platforms, it’s easy to get overwhelmed quickly. However, don’t put your hard earned money into a random coin off of a tip or recommendation from a stranger on YouTube. Like anything else in life, be wary of scams, pump & dumps and Get-rich quick schemes.

Yes, recommendations can be useful and help you in narrowing down the potential list of cryptos. But ignore the noise and hype. Take the time to understand what you are putting your money behind. We spend days and months researching about buying a home, a car or even a new phone. This is no different.

Take the time to at-least go to their website and understand the cryptocurrency, the team behind it, their vision, read the white paper, look though their Github code, join their Telegram channel, Twitter or other social media channels to see what is happening in the community. Follow the news and articles in the industry and stay up-to-date.

Following established industry veterans such as Andreas M. Antonopoulos, Tone Vays, Jimmy Song and Ivan on Tech helped me in the journey and are a good starting point for anyone new.

The best investment you can make, is an investment in yourself. The more you learn, the more you’ll earn. - Warren Buffett

3. Have an Exit Strategy

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There is nothing more exciting that watching your portfolio go up in value exponentially and nothing more devastating than watching your money get eroded and having to hold a bag of coins that are worthless. I learned this the hard way.

Cryptocurrencies are a new asset class and investing in them is still extremely risky. The volatility is high and the price fluctuations can be wild. Before you make any decisions, you should have a clear plan in mind and more importantly stick to that plan when emotions cloud your thought process.

Have a clear reason why you are investing in a particular coin, track your portfolio (on an app or a simple spreadsheet for that matter), have an exit price or percentage gain in mind and most importantly, rigorously stick to it.

The best way to measure your investing success is not by whether you’re beating the market but by whether you’ve put in place a financial plan and a behavioural discipline that are likely to get you where you want to go. - Benjamin Graham

Takeaway

Cryptocurrency and Blockchain technology is here to stay and the future looks bright. With fresh opportunities comes big risks. As the market recovers from the bear market, as mainstream media starts to cover the market widely, as hype and euphoria returns, there will be many newbies entering the market. Remember:

Own your Crypto Do your own research Have an exit strategy

While the above tips are not an exhaustive list, I hope that it will provide you with the right launchpad for making informed decisions and help delve down the rabbit hole of this fascinating market.