I like to think that the world of cryptocurrency is a stock market for millennials who have next to no patience. Each day in the world of crypto equates to price movements you might see in 6 months on the traditional sharemarkets.
As per my first article I'm hoping that these musings will do two things:
- Cement the lessons learnt such that I don't make the same mistakes
twicemore than four times. - Possibly be of some use to somebody who delves into this world with the same lack of guidance I had.
Beginnings
Around 7 Dec 2017 I made the decision, like several hundred thousand other people at the same time, that I wanted to get a piece of this crypto activity. As I have mentioned in my previous post I had been following BTC, LTC, ETH and Ripple (XRP) for some time but found the barrier of entry too high.
My initial challenge was making my first purchase and at the time my belief was that the following would be required:
- Money
- Crypto Wallet
- Exchange to join
Number 1 is relatively easy to come by in small to medium amounts but what about the other two items.
Crypto Wallets
Previous to this moment wallets were a daunting item to me. Everyone warns you to keep your coins safe in a wallet and definitely avoid keeping them on an exchange, but then in the next breath push you to trade coin XX on exchange YY asap before it MOONS!
How can I keep my coins safe in a wallet and play the market?
This might seem really stupid to many but it was about this time I learnt that exchanges provide you wallets for each currency. My first felt like an idiot moment.
Okay so I really don't need 2. just yet so I can go and seek out an exchange... How hard can that be?
Choosing An Exchange
So first things first I'm Australian and I was armed with AUD fiat and credit cards, should it come to that, so I started looking at who would take my money. This process was harder than I'd imagined as taking a survey of friends who may be in the know gave me many and varied responses. In most cases for every exchange I was referred to I was also told to avoid by somebody else. Some exchanges I considered were:
- Cex.io
- Bitfinex
- Coinbase
- BTCMarkets
- Coinigy (not an exchange... well I didn't know that just yet :) )
So the first port of call was Coinigy and I started a trial there. A fantastic site and the main attraction was the sales pitch about digital currency arbitraging which I was aware of and yes, admittedly, I was getting very much ahead of myself. Once I get a little more experienced I will finally subscribe and start integrating Coinigy with the exchanges I use most actively and take advantage of the astounding charting capabilities etc.
Next was Coinbase and the experience was great. Immediately sign up via an iOS application and within 30 minutes or so I owned some crypto. Unfortunately Coinbase did not have Ripple on their books so my first purchase was $250 worth of Ethereum as that is the weekly limit when your ID is unverified. I felt pretty good at this point but was not reviewing the latest Lamborghini models just yet.
My First Exchange was BTCMarkets
Next up I signed up at what I consider to be my first real exchange, BTCMarkets, which had the benefit of being Australian so hopefully easier to confirm my identity with and get exposure to more crypto.
Little was I to know that my verification attempt was queued up wtih thousands of other new users and BTCMarkets were throttling approvals by sending out snail mail letters with verfication codes. From my initial sign up to being verified to use the exchange took 1 week, which is actually pretty good I would find out later.
Perhaps the most frustrating aspect to this exercise was that since 7 Dec, when I wanted to buy Ripple and started this adventure, and the current date (~13 Dec 2017) XRP had risen from AU0.32c to the price of AU0.67c and seemed to be heading upward. The train was departing and I wasn't on it yet!
Like a madman I had spent the interim days signing up to four other exchanges, Coinspot and CEX.io, trying to find one who would verify me and allow me access to Ripple NOW, which was not to be as it turns out.
I did use Coinbase to purchase an additional 0.75 LTC @ AU$187.
On 14 Dec my letter finally arrived from BTCMarkets to confirm my identity. I made a payment via PoliPAY and entered the market with the AUD/XRP pair on BTCMarkets. The price had risen further and my first purchases were:
| Quantity | Price |
|---|---|
| 500 | AUD 0.81 |
| 400 | AUD 1.14 |
| 300 | AUD 1.15 |
As you can see I was a little excited even after having missed a 3X opportunity. I took a chance that Ripple was going to go larger than US$1 which turned out to be right.
By the end of that first week 17 Dec I had bought and sold Ripple no less than 5 times taking gains of $60 each time as the price fluctuated betwen AU$1.20 and AU$1.51. Ripple ended the week closing at AU$1.00 and I was having a lot of fun and learning a lot. I'll try in my next post to cover off the emotional aspect of trading.
Also of note on 17 Dec I sold my LTC initial holding of 0.75 for AU$317 which was a 70% gain and it turns out almost spot on the peak price of LTC at AU$429.00. I could get used to this.