Your first investment into cryptocurrency can be daunting. Bitcoin is well known, but what if you want to make some money on other cryptocurrencies? Investors in digital currency will want to diversify their investment. These are all high risk investments. You can lose a lot of money, but you can also become a millionaire.
This guide is meant for the beginning digital currency investor. Maybe you have yet to buy your first cryptocurrency and want to try making some money. These are some examples of what to do and how to do it.
Note and Important: This is not investment advice. I have no legal standing to advise what you should do with your money. This is what I would do if I were to invest as a beginner.
How to Buy Digital Currency Coins
There are a lot of places to buy your initial coins from. I’ve found Coinbase and Bittrex to be very reputable and are always my first choices.
- Sign up on Coinbase. This is how you can quickly begin buying Bitcoin, Litecoin, and Ethereum.
- Sign up on Bittrex. You will use your purchased Coinbase Bitcoin etc to trade into whichever currency you want to invest in.
- Don’t feel like you need to buy an entire Bitcoin on Coinbase – fractions are perfectly fine to purchase.
- Transfer the Bitcoin from your Coinbase wallet to Bittrex. It should take about an hour to complete.
- Begin buying digital currencies from the market page on Bittrex.
Before You Invest in Your First Cryptocurrency
So let’s take a few steps back and ask yourself some questions and remind yourself of some common fallacies.
Past performance does not indicate future performance!
The higher an asset’s market cap climbs, the riskier it becomes.
The bigger it gets, the slower it grows.
- What are your long-term goals? To make above average profit.
- What is your budget? For the purpose of this guide: $1000.
- How do you respond to a bear market? Are you patient? Here’s where most people fail. You will experience severe downturns and it doesn’t always mean sell. At the time of writing this, Bitcoin dropped $800 in 2 weeks. That is pretty big. A lot of people panic sold, but the smart investor knows its worth hanging onto.
Investment Seed with $1,000
An investors success comes from investing in undervalued assets before they become popular. So if you had $1,000 I would stay away from assets with a high market cap ($300 million or more). You will want to place your bets on what is likely to show impressive results in the future. An asset with a market cap of $10 million could possibly reach a market cap of $100 million fairly easily.. But an asset with a market cap of $1 billion has to find another $1 billion to double.
With good research and diversification you can set goals that can yield the results your looking for. But doing research and investing in undervalued assets is only half the battle.. The largest battle most investors face is the ability to be patient.. It doesn’t matter if you’ve heard it a million times, impatience is the #1 reason why most investors fail to achieve impressive results.
If you research and diversify for the long-term, then selling should never cross your mind! You should expect highs, lows, bubbles and swings as all of this comes with investing.. You already have a long-term plan in place, now the real test is your patience..
Diversification Investment Strategies for Digital Coins
Just like the stock market, you generally want to invest in 7 to 10 different assets. Sometimes even less. Too many individual investments will be harder to research and track effectively.
- Invest $250 in 2 assets that have a $150m – $300m market cap.
- Invest $250 in 2-4 assets that have a $50m – $150m market cap.
- Invest $300 in 3-5 assets that have a $25m and $50m market cap
- Invest $150 in 3 assets that have a $5m and $25m market cap
- Invest $50 in long shots or assets with a market cap of $5m or less.
- Continue to grow your investment capital on the dips.
Speculation on High Risk Digital Coins to Invest In
NEO – at it’s current price, Neo will see a price surge as China re-legalizes ICO’s. As Neo is already releasing their foundation for compliant ICO’s by end of year.
Nexus – Alongside bitcoin/qtum gimmicks on sending satellites to space, Nexus already has successful test runs. Plus is created by the son of someone who worked on Space-X.
RISE – With all the hype around Ark and Lisk, and Rise fits in the same category. Might be a bit more of a long shot, but if they succeed on their drag and drop sdk, Rise will EXPLODE. If they are unsuccessful then obviously it will crash.
VERT – It shares a lot of its architecture with coins that have proven their worth in the market, while also adding its own flavour to it (ASIC resistance), and has a dedicated and talented team behind it.
Verge XVG – Becoming listed on more and more exchanges will increase volume.
Lower Risk Investment Speculation
Established coins like Bitcoin, Litecoin, and Ethereum aren’t nearly as risky but still show substantial growth. If you are looking for slower more consistent gains, these big three might be the way to go. Hop on Coinbase and begin buying at every dip.
40% BTC, 30% LTC, 30% ETH.