Cryptocurrency is all the rave these days, with daily news being released about it. The world seems divided about it, and with so much information flying around, it can be confusing for a complete beginner, such as myself.
We have been saturated with news about cryptocurrency, and its most well-known currency is no doubt Bitcoin. A quick Google search shows thousands of tutorials or ‘How-to’ guides teaching people how to make money from Bitcoin, with the oft quoted statistics of ‘if you had invested xxx in 2009, you would have made xxx today!’. While I might have not been prepared for Tesla or Apple, I was determined not to let another chance slip by.
When any investment gains significant returns, the public’s attention is drawn to it in an attempt to emulate successful investors, and the fear of missing out drives in a new influx of investors with little or no knowledge about the industry. I myself was drawn to Bitcoin because of this fear of missing out; and thousands of articles were telling me it was not too late to enter the market and reap handsome rewards.
It can be scary entering a new market, especially one where opinions are so divided. When I first considered investing in cryptocurrency, it seemed straightforward enough: this was a digital commodity, and if I invested when prices were dropping and sold when prices were rising, I would make a profit. It took me about 30 minutes online to realise how wrong I was.
Tips for First-Time Investors
How To Start
To start trading in cryptocurrencies, the most important step to take is to set up an e-wallet. It sounds complicated, but it is basically opening a bank account. Be prepared with the following.
- IC
- A document with your current address
- pen and paper to write on
- Your camera phone conveniently placed to take a selfie.
A slightly tedious process, but every legitimate company has to do due diligence. It really works in your favour.
I started off with Trackhako and Coinbase wallets: simple and safe for the everyday investor. These apps not only let me track the prices of Bitcoin, Ether and Litecoin (all cryptocurrencies, in case they seem unfamiliar), but also allow you to buy/sell it from the convenience of your phone.
What To Buy
With over one thousand cryptocurrencies available, I was overwhelmed by the number of choice. I decided to focus in on Bitcoin first, simply because it was the only familiar currency. So, just like every beginner looking to investment, I did a quick search for the prices in hopes of spotting a trend and making a quick buck. The temptation to pour all my savings into buying Bitcoin was strengthened by the results.
Here’s a little comparison of Bitcoin vs Singtel.
Compared to a ‘safe’ investment, Bitcoin was more than 20 times more profitable. This meant that I could have gained 1,800 USD by purchasing a single Bitcoin in less than a month!
However, it seemed slightly too good to be true. I decided to turn to the Art of War to gain some insight.
‘put [your]self beyond the possibility of defeat, and then [wait] for an opportunity’
The chance of making a quick and phenomenal profit made it tempting to go all in, but I partitioned out some money I was willing to lose; just in case. With this amount set aside for crypto investments, it was time to enter the market.
‘Know the enemy, know yourself; your victory will never be endangered. Know the ground, know the weather; your victory will then be total.’
I began by reading up on cryptocurrency news from trusted sources; Forbes, Tech In Asia and Bloomberg. While there were many other sources to turn to, conflicting opinions of the different writers left more questions than answers; discerning which advice was good or bad was beyond me at that point. Nonetheless, a broad understanding of cryptocurrency and its market was beginning to form in my mind.
Armed with this newfound understanding of cryptocurrency, my confidence was buoyed; it was time to get to know the market better. To that end, I joined a Facebook group and Telegram group to get a feel of what the cryptocurrency community in Singapore was talking about, hoping to pick up some indication of when would be a good time to buy in.
Despite all the readings I had done, spending an hour in the cryptocurrency community left me lost. There were hundreds of messages pouring in from people who were talking about mooning, ICOs, forks, hard forks, leverage options, alt coins, mining, PoW, PoS, and dozens of other unfamiliar jargons.
It was a sobering wake-up call that I was still far from knowing the market. If I was serious about investing, it was going to take some long hours of reading up as much as I could, starting with these.
More information about the BlockChain: https://themarketmogul.com/blockchain-information-internet-value/
More information on Dapps: https://www.coindesk.com/information/what-is-a-decentralized-application-dapp/