Getting started in crypto investments is no easy feat. It takes a solid amount of research, careful preparation, cash and a good amount of luck. Too little research done and you could fall prey to a scam or a coin that's not going anywhere wasting your precious time. A lack of preparation could keep you from pulling the trigger on an investment with an amazing ICO or getting in early on a crypto before it shoots to the moon and makes everyone who invested rich. Cash(or crypto!) is king and without it investment can be quite hard if not impossible. Anything can happen in the crypto world, the market could go into the trillion dollar level or it could all come down on us like ton of bricks, so yes you will need a bit of luck to be successful as with any venture. Luckily fortune favors the bold and those who risk big stand to gain the highest rewards possible, many who have made it in the crypto space can attest to this fact, they have made millions almost over night!
Here are 10 steps every crypto investor needs to take to be a success:
- Get Setup And Ready For Action!
In order to truly take advantage of the opportunities out there you need a varied set of accounts for multiple exchanges both large and small for various reasons like the fact that exchanges have different types of cryptos available, and arbitrage opportunities that are opened up when you have done the hard work of creating and setting up a good variety of accounts. None of these exchanges should be taken likely they can all potentially bring great opportunity! Here is a list of the top 30 exchanges I recommend getting an account for:
Don't have cash to invest but you've got some credit? This will get you in the game:
If you made it this far, you're miles ahaead of most people, congratulations!
Step 2. Decide Which Investment Is Right For You
Will your first investent involve an ICO(Initial Coin Offering) or will you hit the exchanges hard getting in early and "hodling" until that windfall price finally hits the market. Ultimately an ICO and buying a crypto on the exchange are the same thing but they should be seen and treated differently. To give an example, an ICO you invest can be considered an undeveloped cryptocurrency, an unfinished product, which is why they all (should) have a roadmap in its development. Also because the cryptocurrency is so new it will take some time for the ICO to enter an exchange where you can sell your crypto for a profit, that is if it ever does enter an exchange be aware ICO's are risky investments. Investments involving both ICO's and crypto's already available on the market have their pro's and cons but it's important to decide early on which you prefer to focus on first.
Step 3. Research Like A Boss
Does the ICO have a good whitepaper that was not copy pasted from a successful ICO of the past? Is the crypto in question a privacy coin? Who is the team behind the Crypto/ICO? What is the token supply? If there were a single mistake that could be attributed the cause of a poor investment, lack of research would be at the top of the list. It is crucial to do sound research in the crypto market, it's just too risky not to. There are scams left and right and even the best get bamboozled from a shiny new coin with a flashy logo and promises galore. Don't be fooled. A good youtube channel I highly recommend to help hone the newcomer on what to look for when investigating a potential prospect is Mike Michaels. He goes the extra mile in his research and so should everyone involved in crypto.
Step 4. Develop A Sound Investment Strategy
It never surprises me how many people do not know the difference between gambling and investing when they are investing! Personally I never invest what I can not afford to lose. I also divide my investment in regards to the risk involved, 40% includes very conservative(low payoff) and relatively low risk investment, another 25% involved medium risk and medium payoff and the final 35% is focused on very aggressive investments that are extremely risky that can potentially be obscenely profitable. I also diversify wherever possible that makes good business sense. I highly recommend this book in regards to risk management and investment strategy by Nissam Taleb Antifragile for further study on the subject.
Step 5. Get Connected!
Getting on social media is a necessity when looking into this market especially once you're invested. It's important to know what developments are and what people are saying about the crypto's you are interested in. Telegram, Discord, Twitter, Facebook, Youtube and bitcointalk.org are some of the many places people choose to receive updates and discuss ICO's and cryptos. I suggest being conntected to every one of them(including Steemit!).
Step 6. Protect Your Investments!
Once you have taken the leap and invested however large or small the amount one should do well to secure it as best as you can. Leaving an investment of crypto on an exchange is a terrible mistake, I can personally attest to this blunder from experience. At this time I would not even recommend securing it in a wallet on your computer. There have been many cases of backdoors to wallets that lead to a hapless investor getting hacked and robbed of all of his coins. The best method of protection purchasing a hardware wallet like the Ledger Wallet, I consider this to be the highest level of security available for cryptos. But even still it can be a bit inaccessible without a computer handy. A smartphone crypto wallet app can be very secure as well thanks to 2-factor authorization features. AirBitz Wallet is a pretty good one for bitcoin that I can suggest, it includes 2-factor authorization features and a pin requirement incase a hacker discovers your login details.
Step 7. Monitor Your Investments!
Depending on what you invested in and when you will want to look after what develops with the cryptos you chosen over the next few months, years. This is where social media will play a key role as now you can track them on the various platforms and see if they are keeping active and improving the cryptos both in their marketing efforts and with the tech associated with the crypto. Should any bad news arise at least you will be early to receive it and can make the necessary decision of whether to drop or hold on to your investment. Becoming part of the community supporting your crypto investment will also give you a sense of how strong or weak the community that supports your chosen cryptos is and community is crucial in most cases for a crypto to be successful. Where would Monero or Dash be without it's community?
Step 8. Promote Your Investments!
Contribute to efforts in spreading the word about your cryptos! Provided you believe they will be profitable and genuinely offer something to the world as opposed to just being a run of the mill altcoin it's highly recommended to spread the word about what a great investment it is. Social media is excellent for this. The fact is the more people buy into your investment the better chances you're investment will keep going up and to the moon!
Step 9. Diversify Your Investment Portfolio(Get More Cryptos)
So you have some money placed on a privacy coin. Excellent! But surely you didn't put all your eggs in one basket. Right? Diversification is crucial to success in the altcoin economy. Perhaps you purchased Redd Coin with it's strong social media currency features, or XRP(Ripple) with it's strong price stability catering to larger financial institutions. It's important to strengthen your portfolio with a wide array of different powerful cryptocurrency assets with their own original tech that provides a benefits the others simply don't have. In this game you can bet on all the horses so to speak and still come out a winner!
Step 10. Develop A Tax Strategy That Works For You
Nobody wants the IRS knocking on their door. There are new rules for taxes into the cryptocurrency game and while it's ilegal to break them there is some wiggle room provided depending on ones particular situation. Expect capital gains tax to be a factor should you be a US citizen and happen to be lucky enough to be successful in crypto investing. Long term investing (holding crypto currency for a year or more before cashing in with USD) will provide the smallest tax rate 10%-15% as opposed to short term selling where capital gains could reach 30% of your crypto earnings. Counsel with a reputable CPA is recommended both before and after investing!
To conclude crypto invesments are very profitable and it is an excellent time to enter this space, should you follow the steps I have detailed above you will give yourself the best chance for success. There are big risks in this market but huge returns can be made with plenty of opportunity to spare!
Cheers!