Bitcoin, Blockchain and Cryptocurrency for Beginners

Have you got started with Bitcoin yet? How about delving into any of the other cryptocurrencies?

Does the following scenario seem familiar to you?

`Look at the greeeen!`

and then this...

Idle


Watching the rest of the market surge in a sea of double-digit green whilst Bitcoin idles by can make you think about investing your capital in some different cryptos. Ultimately, this is a decision you have to come to yourself, but here's a few important considerations.


What goes up, must come down.

Tread carefully when you invest in altcoins and above all, accept the risks that you take. Buy low, sell high is sounds so easy but human psychology is a strange beast. If it were that simple the percentage of traders making massive profits would be in the majority and not the other way around.


What do you know about these projects?

What do you know about the project? Can you explain the large increases? Do you think it's fair value? What problem are they solving? Do they have a working product?

If you're new, cryptocurrencies can be exceptionally seductive from an investment point of view. Aurora up 433% in one day! If only i'd invested - if only! However, it immediately exhibits the signs of a pump and dump.  Get in now and you run a risk of a similar sized dump. Maybe it will keep going up, maybe. Are you prepared to take that risk?


How comfortable are you with risk?

You alone have to decide what risks you take, whether you define yourself as an investor or a trader and what your strategy is. For example, if you want to play mid to long term and you think Chainlink can make it to $100 a year from now, are you happy to lay your invest in and stick by it? What about if it loses 50% of it's value? How about 90%? If not, how are you going to get out of your trade quickly if the price drops? Do you know how to set stop-losses on exchanges?


Can you use exchanges?

You'll find a lot of altcoins on exchanges like Binance and Kucoin. If you're only prepared to take a certain percentage level loss then you should learn how to use these exchanges and implement stop-loss strategies.

Stop-losses are basically setting limits where if the value of the coin reaches a certain level, you're chosen coin will be brought/sold at that price.

Are you looking to flip for profits or do you believe in the product?

Maybe it's both, but an important distinction to make is whether you are just trying to increase your Bitcoin or dollar position, or if you are invested in this project for the long term - holding for 1-5 years? If it's the former, then the project doesn't really matter as much as what's driving the price.


Do you know what's driving the price? Fundamentals? Narrative? News?

Picking an altcoin at a relative low and riding it up can be a tricky skill. If you pay attention though, you may begin to get some gut feelings for which coins are warming up for a good pump. Be it the fundamentals (eg.Bitcoin), Narrative (DeFi, Oracles etc) or the News (Coronavirus and global panic). Sometimes it's a mix of these things, and sometimes it's hard to tell.

Hel-oooo Defi


Keep up to date on cryptocurrency news by trawling through google, read recent articles, watch reviews by youtubers etc and see if you have a knack for reading the script.


There's a reason Bitcoin is number 1.

And Ethereum is number 2 for that matter. Bitcoin has proven itself over a period of time as the most decentralized cryptocurrency. It's also the most secure network on the planet. Whilst speculation abounds, it is nothing like what you will see regularly with altcoins which have a long way to go with development and proving themselves. As such, whilst the gains can sometimes outpace Bitcoin, the losses tend to outpace Bitcoin too. Bitcoin is the best bet for holding value in a cryptocurrency whilst going up over the long term.

Things come and go in waves. It's likely we'll see the day Bitcoin and Ethereum rocket whilst the alts take a big hit.

...

Be careful out there. 🙂


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