Photo by Tima Miroshnichenko from Pexels

3 Takeaways from "Cryptocurrency Investing for Dummies" for Complete Greenhorns


When I decided to convert my BAT tokens, I chose ETH because I was under the impression that the Bitcoin market was overly saturated. I read somewhere that there is a limited supply of 21 million BTC  and that 18.7 million of them are already in circulation. Hence, I dare not choose BTC because who am I to compete against the big guns? 

It was only when I read "Cryptocurrency Investing for Dummies" by Kiana Danial that I learnt that Bitcoin will reach its final number somewhere around the year 2140. This means that although I am late in this game of crypto compared to many of you here, all is not lost yet. I could add BTC into my portfolio should I deem it suitable for my investment purposes. 

I picked up this book because I am totally new to crypto and thought that reading such a fundamental book could ground me on the basics and root me to sound principles with regard to venturing in this world. I was not disappointed. 

Categorization of Cryptocurrencies

For one, I appreciated how Kiana categorized the multitude of cryptocurrencies into various categories: major cryptocurrencies by market cap, transactional cryptocurrencies, platform cryptocurrencies, privacy cryptocurrencies and application-specific cryptocurrencies. I still don't know much about the differences between Bitcoin and Ethereum but at least I know that BTC is a transactional cryptocurrency whereas ETH is a platform cryptocurrency. Prior to reading this book, I kept coming across news about how new applications are built on the ETH blockchain network. It was satisfying to be able to draw two and two together. 

Diversification of Crypto Portfolio

I think her classification provided me with a much-needed structure for me to rely on when I decide to diversify my crypto portfolio. I liked her reassurance that investing in crypto is no different from investing in stocks and other conventional assets. To safeguard our portfolio against the volatile market conditions, we would be wise to add many crypto assets so that we can spread out the risk. In fact, she suggested having 15 or more cryptos. Now, I need to research more and analyze if a portfolio of 15 cryptos would best address my unique financial circumstances, but it was reassuring to read this rule-of-thumb. 

Intentionality of Investing

Most importantly, I liked how she reminded readers of the automated trading algorithms that are available on various crypto exchanges. Putting our hard-earned money into crypto and watching it ride the fast and furious highs and lows of the market can be rather unsettling for novice investors like me. So I appreciated how she advised her readers to take advantage of Limit Orders so that we could buy or sell assets at a target price that we have earlier determined for ourselves. This would prevent us from getting rocked emotionally by the volatile market. An excellent reminder of how we can control our response towards the market even if we cannot control market conditions. 

I shall end this with a fun fact. Did you know that there is a KuCoin cryptocurrency? I didn't know this until I read the book!

Have you read this book before? Share with me your takeaways if you have.

Photo by Tima Miroshnichenko from Pexels

How do you rate this article?


60

1

diaperfinancingfund
diaperfinancingfund

budding investor


diaperfinancingfund
diaperfinancingfund

Blogging about crypto as I learn

Send a $0.01 microtip in crypto to the author, and earn yourself as you read!

20% to author / 80% to me.
We pay the tips from our rewards pool.