I have been aware of Bitcoin for years but only recently purchased Bitcoin in September 2017 when it was at $5000. What convinced me to buy? Well, I have a Fidelity account and they allow you to hook into your COINBASE account to show the current value of your COINBASE account. The simple fact that Fidelity recognized BITCOIN and COINBASE was enough to convince me that this cryptocurrency may have some longevity and importance in the financial world.
So Fidelity turned me onto both COINBASE and my interest in purchasing Bitcoin, Ethereum and LItecoin. I had not learned about the ALTCOINS until a few months later.
Having been through the parabolic price spike and living through the BEAR market, I wanted to post my lessons learned to date on investing with Cryptocurrencies.
"It's good to learn from your mistakes. It's better to learn from other people's mistakes." - Warren Buffett
Lesson 1. Know why you are buying crypto.
Are you doing it to hopefully make alot of profit so you can become financially independent? -- this was my reason since I hate my current career.
Some buy in because they believe in the technology. I do as well, but I will care more once I get to that financial freedom goal first.
Lesson 2. Use GDAX for all your transactions with BTC, LTC and ETH. Pay zero dollars in fees.
COINBASE runs GDAX, so setup your COINBASE account first.
**** Get $10 in Bitcoin
**** Get started in Cryptocurrency by signing up with Coinbase.
https://www.coinbase.com/join/59e7981a8fb7a900df604267
I have created a few YouTube videos on how to use GDAX and not pay fees on buy/sell orders and transferring your bitcoin and USD fiat. This will save you alot of money in fees. So, here knowledge is power. I will post the video below.
Lesson 3. Dollar-cost average in. Try not to invest all of your USD fiat at once. The cryptos are highly volatile and speculative. You can minimize the damage by buying a little at a time.
Lesson 4. Fear Of Missing Out (FOMO) . - Don't buy when a coin is going parabolic or going green. Patience, it will come back down. I try to buy when it is in the red on a correction if at all possible. Again refer to Lesson 3 so you do not lose all of your money. For advanced traders - you can set a stop-loss order on GDAX.
Lesson 5. Do not listen to YouTubers regarding cryptocurrency. Don't Do it. I fell for this. They try to do Technical Analysis and make predictions on price and volume. Bullshit! Bottom line, no-one knows what cryptocurrency is going to do. There are way too many variables from Government involvement to the scammers like Bitconnect - Yep, they got $200 of mine. Haha, again. Reason not to watch Youtube channels related to Cryptocurrencies. Crypto is highly speculative. It is gambling.
Do not watch Youtube channels talking abut Crypto. Just a bad idea. Do your own research using https://coinmarketcap.com If you believe in the coin, dollar-cost average in. and set your stop losses if you like.
Watching YouTubers is the best way to lose all of your money.
Lesson 6. Do not buy a heavy position in any single coin. try to spread it out. maybe 5-10% in each coin in your total portfolio. I am way top heavy into Litecoin (LTC) and this is killing my portfolio. Mainly due to me not following Lesson 5.
Lesson 7. Take profits!
Do not worry about the tax implications, first make the profits and worry about the taxes at the end of the year. People, like me, can become paralyzed when it comes time to take profits. They are afraid of the tax implication on the trade. Well, when Bitcoin was at $20k, alot did not sell, they regret this now. If anything, sell and keep your core investment. Just sell to take the profits you made.
Lesson 8. Use the best exchanges. Don't buy a coin on a crappy exchange. Sometimes these are hard to use sites and you may find it difficult to get your coin transferred. Just a pain. I use COINBASE/GDAX, Binanc, Kucoin and BITTREX.
Lesson 9. Use a Cointracking app to keep track of your portfolio and your taxable events.
I use Cointracking. I love it and it is well worth the money. I get a current state of my portfolio and gain and all taxable events. And yes they have a referral program. So sharing the love now:
Sign up using the link below and you will get 10% discount for all Account Upgrades.
https://cointracking.info?ref=J503985
Lesson 10: Don't buy CryptoKitties. What a waste of money and time. See why.
Lesson 11: Do not follow John McAfee on Twitter - Do not listen to any of his advice on Crypto. He is basically shilling coins and charging coins $105k per tweet to pump a coin. Just don't be suckered in by the bullshit.
Lesson 12: Do not invest more money that you are willing to lose. Enough said. I invested a bit too much. So being down in this bear market sucks and have taught me alot.
I hope these lessons will be of some help to you. As with anything I do, I try to learn from others and this list will keep evolving.
Maybe one day I will have my financial independence. just maybe. -- slow tear rolling down my cheek.