How to Buy Crypto (& make a profit).
Disclaimer: NFA.
Crypto has been the hype all throughout the Covid-19 pandemic. Many made fortunes through investing, many through gambling & many, both - thin line lool. On the flip side however, many lost huge amounts (including myself). It's all part of the journey we'll convince ourselves, #WAGMI and all those things 😅.
In the recent months however, crypto has been rather quite; no gurus preaching and prophesying and far less Ponzi schemes lying in wait for n00bz. This can be largely attributed to the "bear market" or large drop in crypto asset valuations. Factors like inflation and raised interest rates all playing a role in this. The effects of these are spread across the board, affecting the: stock, energy, real estate and other markets. The global economy is in dismay - I never thought I'd see the day the GBP and the USD were essentially 1:1.
Generally, crypto assets are down between 60-80% YTD and may still have some falling to do. This doesn't mean we completely avoid the charts, it's in times like these that we must scrupulously search for opportunities. These are essentially Black Friday Sales for an investor - consolidating and strengthening positions will yield great returns WHEN the bull run returns (and it will return).
A sound investment strategy is essential to actually take advantage of this opportunity and realise a real profit. With inflation so high, the stakes are raised to hedge against it and so we'll be needing those 10,100 & 1000x astronomical, degenerate gains 🥳🤑🚀 (alright, you can stop fantasising, we've got work to do!).
I'll cover the buying of crypto for the beginners then we'll get onto strategy for the beginners and the seasoned alike.
Platforms
There are a large and increasing number of platforms that now offer crypto currency services. They all more or less do the same things with small technical differences.
Here are some of the most popular:
Coinbase, Binance & FTX.
There are still many others like:
Crypto.com, Gemini, eToro & certain banking apps like Revolut which allow you to buy and store cryptocurrencies parallel to fiat.
You can sign up to as many of these as you'd like by creating an account with an email and phone number and then verifying your identity with a passport or driver's license
On these platforms you can trade (buy& sell) and store your coins for small transaction fees. They host a wide variety of coins (but not all). Certain platforms may have a currency available that another does not, so it is worth registering for numerous at a time.
Centralised - the aforementioned exchanges are platforms are controlled by a single entity who possess control over your activities and information, essentially defeating the discreet nature of crypto all together. There are DEX's available, short for decentralised exchanges, which allow you to trade your currencies in a decentralised way. Examples of these are: UniSwap & SushiSwap which are on the Ethereum network, PancakeSwap on the Binance chain, TraderJoeXYZ built on the AVAX chain & SundaeSwap on the Cardano network.
DEX's do not allow trade between fiat and crypto, only exchanging between crypto tokens. To access these DEX's, you'll need a crypto wallet such as: a MetaMask wallet or a wallet connect to hold your currencies. DEX's also allow you access to some of the smaller degen projects.
DEX's do have cons though, they are a lot less user friendly and smaller projects may have problems with liquidity, making it difficult/impossible for you to extract your funds.
When to Buy?
Now! Accumulate!
And then again if we go lower! Swingin' for home runs.
What projects?
As virtually every project is down from their ATH's, it's almost fool proof. Provided you don't get rugged or get greedy, any project you lump your funds into should be profitable. Some projects will 1.5x, some will run to the moon. Selecting the latter is ideal.
To do this, you've got to do your own research. Here's a link to a blog I wrote about project analysis: DYOR
TL;DC:
- Important to do it yourself, so to not be mislead
- Youtube a great source - Coin Bureau, WhiteBoardCrypto & other great channels
- Analyse project website: founders, goals and tokenomics
- Websites like Messari, ICO drops and Binance Research
- Twitter! Twitter community is goated
How to Make a Profit?
Buy low, sell high. The aim is to buy a token and sell it for more than you bought it. The delta being your profit (before tax😇).
Doing your research should be your primary strategy. TA may help with trading and timing entry points. Coupled together, you'll have a s solid foundation for your crypto quest.
Cryptocurrencies are speculative assets and so with certain projects, twitter and discord groups can be indicative of projects with tailwinds behind them. Invest in these! Take profits on the way up! Don't get greedy.
During your research, you'll be best served to compile a list of long plays & short plays or safe bets & risky bets. Higher risk, higher reward but also a higher chance of seeing zero. Spread your risk.
Bitcoin leads the market. Then Eth. Then altcoins. Then degens. Following this trail of investing may (I cannot offer any financial advice) be of benefit i.e. invest in Bitcoin, take profits and shift them into ETH then siphon some of those profits into your favourite alts and finally the dirty degens and moon plays.
This is why it's ideal to pre-emptively carry out your research. When the time arrives, you are ready and know what projects you may want to get into. It's all about pulling the trigger and executing.
Other Interesting Strategies
Pump and dumps. If you are someone of influence in the crypto community then this strategy may be for you. You fill your bags of a shit coin and take to twitter or whatever social platform you hold your audience. Shake them up with FOMO and fill them up with hopium (I'm just highlighting, not suggesting) and watch your bags blow up. Exit and sell your positions to the late buyers - greater fools game.
I've actually seen individuals without any audience benefit of this. The would start off the same, consolidating their positions in a shit coin, then pay an influencer to create buzz around the project and then use the late entrants as exit liquidity.
Seasoned crypto surfers can spot these schemes from a mile away and steer clear of them. BUT, here me out, since you know the inner workings of the play, buy in early and get out quickly before the dump, make a bit of profit on the way up. Sneaky fox 🤑
This one's for the TA bashers. Day trade based on volume. Early in the morning, I've noticed that there are little dips in the prices and by noon they have gone up. Maybe because people are sleeping, don't take my word for it, it's a working thesis. I've a 55% success rate, probably less LOOL.
I can't advise on project but here are a few of my faves.
Alts: SOL, AVAX, ADA, POLY, DOT, ATOM,
Microcaps: VRA, QRDO, SAND, XTM, TRIAS, TOKO
I could be shilling :o