A Beginners Guide to Cryptocurrency Investing

[EasyMoney]

Introduction

Prior to reading the entirety of this thread, I find it imperative that you understand that you SHOULD NOT get your sole stream of information through myself nor any other members. Do not simply purchase a coin because someone on a forum claims that it will skyrocket and will be a good investment in the near future. With that being said, this thread has been organized in order to inform the newer members in the world of cryptocurrencies. This WILL NOT be a significant amount of new information for those who have been investing for a decent amount of time; although, perhaps you will learn a couple of things here and there.

Why should you listen to this?

You’re probably asking yourself, WHY should I read this thread and follow this information? For those of you who have not entered the market and are looking to make a great amount of money, investing in the crypto market will be an extremely reliable decision. This information has taken a significant amount of time to compile and develop for those members who have not invested in the field yet; enjoy it and be sure to take advantage of the sources.

Reasoning for this thread

I have decided to share this lengthy thread in order to help those who are nervous or are unsure of how to get started investing into cryptocurrencies. I will not be offering specific coins that one should invest into; although, you should not have any issues in researching the more reliable coin investments as well as the more risky ones that may have a higher return on investment. Overall, I have seen far too many members taking interest into the market; however, they simply do not know where to purchase the coins and where to store them. Other members lack the knowledge of how to research upcoming coins as well as finding the least risky alt coin to purchase. Regardless of the particular reasoning behind reading this thread, I found it incessantly important that members on Hackforums have a thread to refer to whenever necessary.

EasyMoney Reviewed by EasyMoney on 9th Oct 2017. A Beginners Guide to Cryptocurrency Investing https://i.imgur.com/TjSP7gc.png Introduction Prior to reading the entirety of this thread, I find it imperative that you understand that you SHOULD NOT get your sole stream of information through myself nor any other members. Do not simply purchase a coin because someone on a forum claims that it will skyrocket and will be a good investment in the near future. With that being said, this thread has been organized in order to inform the newer members in the world of cryptocurrencies. This Rating: 5

[EasyMoney]

Why invest into coins?

Investing into different forms of digital currency has become a massive fad (for this forum at least) in the past few years. The primary theme and reasoning behind why one should invest into different alt-coins is the fact that it is a great way to make money. Everyone here is browsing this sub-forum with the desire to garner a profit margin from their investment. In addition to this, investors should recognize that these forms of cryptocurrencies maintain different variables of privacy and have become the most private payment method internationally. Using these digital currencies does not lead to any taxing on the payments sent or received, it is free to open an account, there are low transaction fees, and the personal identification of the sender is the least important facet of discussion for the transactions.

Making some side money will be extremely easy due to the amount of credible sources that are around to assist individuals with investment advise. It should be noted, though, that you should not solely rely on these sources and just purchase coins afterwards. Please take the time to research these coins themselves and gather any form of information on the dynamics and technological aspect of the currency as well. Learning the market is one of the easiest things, to be honest. Every couple of months there tends to be a significant drop in the valuation of all major coins (BTC, ETH, etc.). Many new investors feel that it is becoming too risky and they unload all of their holdings; ironically, this is the period to buy more holdings (generally speaking). The market is very easy to learn and allows investing to be a very easy process.

How much should you invest?

Investing has become a very prevalent aspect of the forum community; with that happening, a decent amount of members have been bragging about their earnings that they have made. Some users recommend that new investors take a loan from the bank to have some money to play with in their investments. DO NOT TAKE OUT A LOAN. It is important that you only invest money that you are willing to lose.

Once the money is invested into the market, try to set a goal for yourself. For example, let’s say that I purchased 10 Bitcoin when it was worth $1 each. As a way to force myself to hold the coin, I can tell myself that I will not sell the 10 coins until I have made a 500% return on my initial investment. This may seem like a massive leap in valuation; however, a lot of the newer coins will shoot up in value in a weeks time. Always set a goal prior to selling the coin; it will eliminate the habit of unloading all of the holdings when the market seems to be suffering from a deficit.

I have already slightly mentioned this before but I find it extremely important that it is mentioned again. Do not panic sell on every drop in valuation. If you cannot ride out the wave and hold your investments through positives and negatives, I would not recommend investing into digital currencies.

Who SHOULDN'T invest?

There are a couple of different variations of people who definitely should not be investing into crypto’s. If you consider yourself any of the following, I would highly recommend AGAINST putting your money into altcoins:

• Impatient People - Someone who wants to make a ton of money overnight and/or cannot handle a loss of value should NOT be investing.
• Scared of losing money - Nobody WANTS to lose money; however, you should be prepared for it to happen. Not all investments will bring profit.
• Followers - If you cannot think for yourself/do your own research, investing isn't for you.
• Profit expectation - You cannot EXPECT to make money off of all of the investments you make. You are bound to lose money; it should be noted, though, that the wins should outweigh the losses.

[EasyMoney]

Where can these coins be purchased?

• Coinbase - The service has been one of the longest around. Make sure to always have your Authy/2FA access, they are shit with customer service/support. Many people refer to this as the PayPal of crypto
• Poloniex - One of the most popular places to buy/store coins. This would probably be the most recommended from all of the users on this website. There are complaints of shit service in regards to SiaCoin lately with Polo.
• LibertyX - I haven't looked much into the pros and cons of this source; it does allow bank/card use to purchase though.
• Kraken - Again, unsure of the negatives/positives. Supposedly has better sending and buying/selling rates than Coinbase

What coins should you invest in?


Investing will always be a personal preference. I am not going to tell you what coins to invest into; realistically, you should not listen to someone when they tell you to buy a coin. You need to research the details, technology and information on your own. Do not be swayed by someone potentially running a pump and dump scheme. Always be careful with your money that you are investing.

When you are researching the information behind these crypto currencies, I always look for some innovative piece of technology. Look for something that you would consider potentially revolutionary; something that can be incorporated into various aspects of life. Bitcoin, for example, has received essentially all of the recognition for the creation of the Blockchain. Wealthy individuals as respected as Mark Cuban have openly commented on the fact that the Blockchain will be used in the medical fields and various others in the future. Look for something innovative.

[EasyMoney]

Should these investments be long or short-term?


Similar to the choice of coin, the length of investment is personal preference. Be sure that you know which you are looking to do prior to buying a coin. Bitcoin, for example, would be seen as more of a long-term investment with the current holdings of the coin as well as the price fluctuation. A coin recently introduced to the market with significant backing and recognition could be both short and long term. Regardless of which you're looking for, always understand and recognize whether you want to make a quick buck or a long hold prior to spending the money.

A lot of people have been discussing the dynamics of initial coin offerings. I, along with many other members, feel that they are a bit of a fishy way for individuals to make millions overnight. A lot of these coins have literally nothing going for them technically speaking; however, people spend millions upon millions of dollars investing into the start-up (more or less) of the coin. If you are going to purchase coins right off the bat with an ICO, I would recommend having it be a short-term investment. Buy low and sell high. Get out before the bubble bursts.

When should you invest?


There is not always a perfect time to invest. Certain coins, ethereum and bitcoin mainly, can always be invested into. Some project both currencies to continue to move upward on the scale of value; thus, you can invest whenever you see fit. I would recommend entering the market on a crash or a serious drop of the more stable coins. When BTC and ETH drop, pretty much all of the other coins will drop thereafter. This would be a perfect time to start investing as you are entering the market at one of the lowest points of value for the coins.

If you are not certain on when a drop has occurred, do some research and look around. You will probably notice members on here posting things like “__ dropped to $!! Should I sell??”. When these sort of threads start coming out, it is likely that the drop has been hitting. I personally go to Poloniex and monitor the charts whenever I have free-time. This monitoring will make sure that you are one of the first people to cash in on the big drop.



Above chart discussion.


The above image demonstrates a couple of different factors that a new investor should look out for. First thing is first; the drops that are occurring tend to always bounce back with valuation higher than the initial one. Additionally, make sure that you genuinely research the reason behind drops. If something has occurred with the technology or the company that has caused the drop, it is possible that the currency will not bounce back and gain financial ground again. Always make sure that the decisions you are making come from a basis and from some knowledge regarding the product. Just because a drop has happened does NOT mean that you should definitely buy into the product and profit off of the next surge.

[EasyMoney]

How will you sell your assets?


Cashing out all of your investments is not very hard, to be honest. The majority of members do the easiest thing possible which is selling all of the coins into the dominant coin, Bitcoin. I would say that a good 95% of the people cashing out tend to sell all of their holdings for BTC and then proceed to sell that BTC for cash, bank deposits, or PayPal. I would advise those who desire PP to deal with caution and proceed with the recognition that you may lose your money in the end. If you try to sell via PayPal, you will be able to get about 10-15% more value from members on this forum; however, deal with caution at all times.

Where can you sell bitcoin?

• Localbitcoins - This is the least risky source in my opinion. I have had deals worth a couple of thousand dollars in cash and I have yet to have any issue. The website is easy to navigate and the users tend to verify themselves through photograph and identification.
• Paxful - I am not sure why I feel this way, but I really REALL dislike Paxful. It looks like an outdated version of eBay. I have not had any really bad experiences with the website but I would certainly recommend using LBTC over them.
• Local Meetups - Finding meet ups is somewhat difficult depending on where you are from. You can post regarding meet ups on this forum, BTCtalk, and many other cryptocurrency forums and websites.
• Forums - You can sell BTC for PayPal on virtually any forum; deal with extreme caution when taking this route.

What digital wallet should you use?

• Jaxx - A lot of the members on this forum tend to discuss and recommend Jaxx. I haven't personally used Jaxx for my BTC but there have been a decent amount of threads from reputable users here in regards to the validity and reliability of the provider.
• blockchain.info - I feel like this is the number one wallet for newer members. When I first got into Bitcoin I remember being referred to this website and I had stored a couple of hundred dollars to start off. They have some strong security and it would be extremely difficult to lose your account through vulnerabilities.
• Poloniex - Most of the people on here have their funds in the Polo wallet itself. This is easiest because it is one central location to hold essentially any form of alt coin pretty easily. You can exchange right on the website and you can do margin trading (HIGHLY DO NOT RECOMMEND NEW INVESTORS TO ATTEMPT IT THOUGH)
• Coinbase - Whatever you do, please do not hold your coins directly in exchanging websites. A lot of members have been learning this the hard way with Coinbase. They manipulate their private marketplace and they disallow people to sell ETH, for example, when the market starts going south. I would heavily recommend against holding any form of money in Coinbase alone.

What physical wallet should you use?

• Trezor - One of the original BTC hardware wallets on the market. They all do pretty much the same exact thing; I would recommend looking for the most reliable one with the cheapest price. This sells for 89 Euro and is supported on most platforms.
• Opendime - Opendime is a small USB stick that stands as a hardware wallet for Bitcoin. You can connect the USB to check the balance of the wallet and you can spend the money online whenever desired. This wallet is not used to send payments online; instead, it is meant to upload BTC to the USB and then to physically hand the USB device to someone as a payment.
• LedgerWallet - This website has a ton of different hardware kits and wallets. They are intending on implementing a Ripple wallet on top of their already existing BTC wallet as well. This has definitely been the most discussed, reputable and recognized hardware wallet thus far on the market.

[EasyMoney]

What is 'Margin Trading'?

Margin trading is a form of trading for people who do not maintain a large amount of money to invest. It should be noted that this is considered an EXTREMELY high risk investment. I would not really recommend this to those members who are new to the world of crypto; however, I have seen some questions and posts about what it is and how it works. At a standard rate, the leverage will remain at a ratio of 1:1. In contrast, a margin trade allows the individual to open a margin position with a certain amount of leverage. Let’s say, for example, that the person wishes to double the leverage it would increase their position yielded.

How does it work?

Realistically speaking, this involve the presence of a lender; someone must be willing to front the funds for margin trading. The lenders will offer a loan to traders who will then invest larger amounts of coins that they would have without the loan. This form of investment does come with quite a bit of risks and potential costs.

Costs:

Interest Rate - All locations of funding will offer somewhat similar interest rates for the same amount of assets being borrowed. The user must pay that interest upon borrowing and/or selling the coins.
Fees - Opening a position with specific exchange websites (some of those mentioned above), does cost a fee. This fee must be covered by the borrower as well.


As goes the trend with essentially all investing, the more one can profit leads to a similar increase in the ability to lose money. With margin trading, it is a somewhat difficult concept to explain to new investors. The maximum amount that one can lose is the amount invested in order to open the position of borrowing. This level alone is often referred to as a liquidation value. Depending on how the exchange website works, when the value of the assets falls to the liquidation value all of the positions will automatically close so that the money lent to the investor will not be lost; instead, he/she will solely lose their own investments.


Recommendations when Margin Trading

• Recognize the Risk - Please continue with extreme caution. You should do a significant amount of research in order to fully understand the risk that you will be placing yourself into when beginning margin trading.
• Look at the history - There have been cases where people put proper auto-sale offers in place in order to protect their assets and to cash out with profit at a certain low. Sadly, exchange websites tend to dictate whether or not users can sell or buy at legitimately any time. Due to that, a significant amount of users were reporting that they had lost tens of thousands of dollars solely from the collapse during margin trading.
• Manage Closely - You should be very involved in cryptocurrency if you intend on margin trading. You will want to set up alerts to your mobile device when specific coins reach a certain range of value. The little things really help; always keep your eye on the money and you will have a lower likelihood of busting and reaching the liquidation value abruptly.
• Understand Movements of Valuation - One of the most important facets of cryptocurrency, right now, revolves around it’s instability in price. These alt coins can fluctuate 100’s of percentage points in weeks alone. It is important to recognize when to invest during a serious dip in value; thus, causing it to be very unlikely to reach the liquidation value of the investor.

Locations to Margin Trade

• Bitmex - A relatively new platform for trading, Bitmex has garnered quite a good amount of reputation and positive remarks. The margin trading allows a maximum leverage of 100x for long and short term. It is relatively easy to navigate and manage. Most importantly, they are one of the few platforms to offer caring support to their users.
• Poloniex - This has become the largest exchange platform for crypto at this point. They offer leverage trading of 10+ Altcoins including the extremely common and more stable assets. The leverage only offers a rate of 2.5x while charging massive fees for shorting margin trades. Overall, Polo has become the most reputable and discussed in regards to crypto investing in general.
• SimpleFX - This platform is available worldwide for margin trading. There is a 10x leverage for Forex, stocks, and multiple other markets. The crypto recognition appears to revolve mainly around BTC and ETH. I have not personally used this website; although, it maintains a nice reputation and looks to value the users on their website.
• WhaleClub - The margin trading on this website is also available worldwide. The crypto has a maximum leverage of 20x. The first deposit on the website offers new members a thirty-percent bonus as well. Again, I haven’t personally used the service but I have heard decent things about it.

[bennieSlirm]

Anybody? Advice? Ive clearly ruled out investing in CDs due to the lack of interest rates, even for longer termed commitments. Considering the Vanguard Total Stock Market Fund VTSMX for a larger portion of the sum. Provides a mix of small, mid, and large cap stocks, slightly riskier than what I have current investments in, but has performed well over the last decade. Low expense ratio=lower fees. Appears to be the type of fund that would make sense for my situation.

[Pazmadicluse]

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