I often make posts about coins that I'm really bullish on. Coins that I believe the price will dramatically increase in the near future. And I've have a great track record so far this year. But after I make these posts, one of the main questions I always receive is how do I find these coins!? Or how do I go about researching coins.
So today I will talk about my approach to investing in the crypto world. How I learn about new coins, how I research them, and how I invest in them.
Please keep in mind that this isn't financial advice, this is just how I do things. So without further delay, let's talk about this more.
1) Knowing General Information About Cryptocurrencies
Let me first say this; Do not invest into the crypto market if you don't know anything about it. Knowledge is power, and in this case, having great knowledge about what you're possibly investing into could be the difference from making a great profit or losing everything. Before putting any money into the market you need to have at least a base understanding of the crypto world. Now you may wonder, what exactly is a base understanding of the crypto market? Well this is what you should be able to answer before you let go of any of your money.
What is your personal goal? What is Bitcoin? What Problems could it solve? What is Ethereum? What is are "private keys," Which exchange is best for you? What is a ledger/trezor? Studying the price history of bitcoin and other cryptos, understanding how volatile the price can be, understanding you could lose all of your money, understanding key cryptocurrency words such as market caps, circulating supply, volumes and so on. Looking at coins that ended up being scams, and finally becoming familiar with at least the top 50 coins (I would prefer top 100) in terms of market cap.
That may sound like a lot of things you need to become familiar with before investing, but if done it will dramatically help you in the long-term I believe.
After-all, you wouldn't start a new job when you know nothing about the job, or you wouldn't get a loan from the bank without knowing what you will use the money for. As I mentioned before, knowledge is power, and being able to develop your own crypto thoughts and knowledge is so important, especially for the next step.
2) Consume All Information
Next you need to consume all of the information; the more the better. I have an obsessive personality and this has me always wanting to learn as much about the investing/crypto market as humanly possible. There are many ways to do this. I am constantly watching crypto content on Youtube, following crypto content on twitter, reading the news on crypto websites, listening to investing/crypto related podcasts. Whatever way it is to learn more about the markets, there is a high chance that I'm doing this.
PLEASE KEEP THIS IN MIND
I highly recommend watching content on YouTube because it is a great way to learn more about your favorite projects, or especially to learn more about new trends, or new coins in the market. BUT, often times YouTubers will have their own biases, or could be paid by companies to talk well about certain projects. Because of this fact, like I mentioned in step 1, it becomes even more important to be able to develop your own thoughts about the market. If you are able to do this, you will be able to see through the coins being talked about that don't have any real potential.
Because I constantly was consuming content, in 2019 I kept seeing DeFi pop up everywhere, and because I kept hearing about it I then researched it more. I liked what I saw, could see it would be the "next big thing" in the crypto market and decided to invest heavily. And it has been one of the best decisions that I have ever made.
Some podcasts I enjoy: Pomp Podcast, What Bitcoin Did, Tales From The Crypto, Unchained
YouTubers I enjoy: The Modern Investor (my favorite out of all the crypto content,) Lark Davis, Nugget's News, Chico Crypto , Ivan on Tech, Hashoshi, Ellio Trades FUDTV and many many more.
3) Doing Your Own Research
I think this is a very basic idea, but at the same time the most important step. It is very easy to watch Youtube videos, listen to a podcast or even read a few articles. But you need to be able to digest all of that information. What possible spin did the content creators put on it, what is real, what isn't.
Then you need to follow up on these projects. Go to the specific projects's website, read their whitepaper, follow them on Twitter, know what their goal and plans are, are they using DeFi? Also study the numbers; looking at their market cap/circulating supply/volume/which exchanges have listed it. You need to know if you are early, on time, or late to the party. Has all of the big-gain potential already been used? What price potential does this coin have? These are all things that you need to know.
Website Tools: Coinmarketcap, Coingecko
4) Limiting Your Risk
If you have already done all of the above steps, you will have done more than most people and this will help you out a great deal. But you need to limit your risk. You shouldn't be investing all of your money in high risk / low cap altcoins. That is a formula that could see you lose all of your money. The crypto market is already risky enough the way it is. Balance to your portfolio is key. It's definitely okay to want to invest in some of those high risk, high reward opportunities on UniSwap. But in my opinion you should then balance those investments with other less risky investments. In the crypto world, those less risky investments would be bitcoin and ethereum.
Also, don't put all of your money into crypto. There is a famous phrase, don't invest any more than you can afford to lose, and I definitely believe that is true. I have quite a lot of money invested into the crypto market, but in my head I have already come to terms that I could lose it all. You need to do the same.
Also from step 1, remember what your original goal was. Is it to have enough profits to pay off all of your debt? Or perhaps a down-payment for a house, a car, or having enough money to retire. Always remembering your goal will make it easier to cash out with profits. Remember, you don't actually have profits until you cash out.
All of these tips I believe are actually basic tips and I would recommend you do all of them in any type of investing, even outside of cryptocurrencies. They have served me very well.
Remember, making money takes takes. Be patient, enjoy the process, and also enjoy learning more and more. This is what will make you successful in my opinion.
I would love to hear what your process is. What steps do you do? And also what crypto content creators do you enjoy?
As always, thank you for reading!