Recently I started to get into seriously investigating investing in cryptocurrencies. But, like many others, I steered clear from crypto while I figured it out.
There is no doubt that digital currency not backed by any particular government is hard to wrap your head around. So, what value can it have? It is the same value assigned to any asset, our perception of worth.
Crypto markets appear to move up and down based on the same forces that drive mainstream investments like stocks. Rumors, whispers, and emotional perceptions drive the price and activity of any coin.
Do Your Own Research
For the past couple of weeks, the number of posts on this site has been slow. That’s because I’ve been spending my days deep in trying to educate myself all about buying, selling, and trading crypto.
What I’ve discovered are some fundamental facts.
You Can Make This As Easy As You Want
The rabbit holes and technical trading strategies you can get involved with are a labyrinth that will suck time and brainpower. Maybe in the future, I’ll spend more time and chase those monsters, but for the newbie, it seems like just starting gently is the smartest move. Besides, I love easy!
If you want to try and time the market, I’ll show you what I’ve learned. In that case, the cost of buying and selling crypto is critical to success. Picking the wrong trading company can cost you a lot of fees you don’t need to pay.
Read more about this in my section on Binance.us below and why I went with them. Please feel free to use my Binance.us referral code of 58334316 and see how you can get your trading fees discounted like I did.
Top 10 Most Popular Cryptocurrencies
- Bitcoin (BTC)
- Ethereum (ETH)
- Binance Coin (BNB)
- Tether (USDT)
- Solana (SOL)
- Cardano (ADA)
- USD Coin (USDC)
- XRP (XRP)
- Polkadot (DOT)
- Terra (LUNA)
But a search online will find information on what people believe to be the correct coins to invest in at the time. Honestly, trying to pick the right coin for you is like someone else picking your boyfriend or girlfriend. Only you know what makes sense for you.
Investing in Cryptocurrency Can Result in High Returns
You can put investing in any crypto on a set-and-forget strategy. It doesn’t have to be complicated. It is like saving for retirement; a slow, steady investment can pay off over the long haul.
This approach is called Dollar Cost Averaging (DCA), and it is stupidly simple. With the DCA approach, you invest regularly and let the returns grow.
For example, what if you had put $20 a week into BTC every week for the past four years.
You would have invested $4,180 and today it would be worth $26,225. That is a 527.41% change.
Let’s compare that against just investing in the stock market. That is the red line in the return chart below.
You Can Lose Money
I recommend never investing money in crypto that you are not prepared to watch drop for some time. The value swings can be dramatic.
Everyone is good at predicting the past, but nobody can accurately predict the future. There is no sure thing in life except death.
Anyone who promises you guaranteed returns or some magic sauce is not being honest with you. Neither exists.
Binance.us is the Best Trading Platform for Me
There have to be thousands of places out there to use to buy and sell crypto. You should feel free to use whoever you want after doing your own research.
I’ve used Coinbase, considered Crypto.com and Kucoin, but eventually settled on Binance.us for several reasons. One of those reasons was low trading fees. Another reason was their focus on regulatory compliance.
When I opened my Binance.us trading account, it took a few minutes. I used someone else’s referral code to open my account. You can use mine to open yours. And when you use my referral code and pass yours on to others, you will earn trading discounts as well. You can see how it works here.
Binance.us is a U.S. Compliant Trading Platform
I appreciated that Binance.us is operated by BAM Trading Services based in San Francisco, California. Many exchanges you might hear about are not authorized to trade in the United States. If some regulator cracked down on the unlicensed exchanges, your assets could be frozen. That is not a risk I’m personally willing to take to save even more on trading fees.
Binance.us is licensed to operate in most states. You can check state licenses here. You will not be able to open an account unless they are licensed to operate in your state. I like their efforts in trying to do things right.
There is no charge to have a Binance.us account and no monthly charge. You will pay a small trading fee when you buy or sell.
Easy to Open My Binance.us Account
From start to finish, it took less than five minutes to open my Binance.us account, verify my identity, and deposit money for free using an ACH bank transfer.
It had to be one of the easiest times I’ve had opening an account that required identity verification.
Binance.us is Easy to Setup a DCA
Once you register your account, you can set up a Dollar Cost Averaging (DCA) deposit as I described above. It took less than a minute to schedule a weekly deposit and put it on autopilot. I got that going immediately. Set and forget.
The minimum investment you can make is $20 but you can set it up daily, weekly, twice a month, or monthly. You have the control to know what you can start and leave running for a long time.
Want to Take it a Step Further?
Using the DCA strategy and Binance.us or some other exchange you pick will get you started on the most basic long-term strategy geared for future success. This is not a short-term get-rich-quick approach.
There are many layers of trading complexity to try and be a more technical cryptocurrency investor. This typically requires the use of an automated trading bot.
For the past few weeks I’ve been using Cryptohopper. Cryptohopper allows you to create automated investment strategies and backtest using real data to see how those strategies have performed in past time periods.
You can test trading strategies with paper trading, that is, buys and sells that use virtual money, so you don’t have your real money at risk until you decide you’ve found the winning strategy for you.
You can use Cryptohopper for free for seven days, and if you don’t decide to subscribe, they restrict your access. If you choose to subscribe to the service, you pay a small monthly subscription fee, but it does not add to fees or costs of buying or selling.
The jury is still out on the benefit and returns using automated trading. I’ll let you know how my testing goes and if I can give it a thumbs up.
Be sure to subscribe to my site emails and watch for my upcoming post on Cryptohopper for a review of my experience testing the platform.
Dip your toe into investing in cryptocurrencies but be smart about it and go for the long returns first with DCA. The DCA approach is the easiest and most proven to create a good return. It is the same strategy smart stock traders use as well.
Once you get something rolling with that sound and conservative strategy, then you can explore how to get more advanced.
Finally, this is not investment advice, just my stupid opinion.
If I’d only stuck with it the returns by now would have been massive.
Disclaimer: Cryptocurrencies are speculative, complex, and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators’ websites before making any decision. The author may have holdings in the cryptocurrencies discussed.
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