Cryptocurrency Is Still the Investment Opportunity of the Decade

@tphoenix

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An introductory manual for newcomers looking to venture into cryptocurrency investment in the year 2024

As we approach 2024, eager crypto enthusiasts are anticipating the upcoming BULL run in 2024-2025. I’ve composed this article to ensure you have a chance to seize the opportunity without the risk of getting trapped in the bubble.

This article highlights the investment opportunity in the cryptocurrency domain and will explain:

• Why Crypto investments are a smart decision
  • Market
  • Bitcoin
• How to Invest in Crypto
  • Investment Amount
  • Selecting Assets
  • Entry and Exit
• Understanding differences between
  • Wallets and Custodians
  • Centralized Vs Decentralised Exchanges
  • Products that I use
• Final Thoughts
  • scams
  • Get Educated about money
  • Summary

Why Invest in Cryptocurrencies?

Long Answer:

Market

The global cryptocurrency market cap today is a whooping $1.85 Trillion, where Bitcoin (BTC) and Ethereum (ETH) account for nearly 49.7% and 16.1% respectively, reaching nearly $1.2 Trillion in Market Cap.

Market Overview - CoinGecko

CoinGecko boasts a registry of 12,665 coins, while CoinMarketCap records an extensive 2.2 million plus coins. With this ever-growing ecosystem of coins, investors can easily get confused and miss out on valuable, and potentially life-changing, assets.

Cryptocurrencies other than Bitcoin, are generally referred to as “Altcoins”.

Some popular altcoins include Ethereum, BNB, Tether, Solana, XRP, USDC, Cardano, Avalanche, Dogecoin, Chainlink, Tron, etc.

Investing seems a challenging task at this point, but it’s pretty simple actually.

Bitcoin is the father of Cryptocurrencies and the entire Crypto market Follows the Bitcoin Trail.

• If the price of Bitcoin goes ??, prices of Altcoins go ?? generally
• If the price of Bitcoin goes ??, prices of Altcoins go ?? generally

Bitcoin (BTC)

Bitcoin is the first cryptocurrency built on blockchain technology, also known as a decentralized digital currency that is based on cryptography. Unlike government-issued or generally termed fiat currency such as US Dollar or Indian Rupee (INR) which are controlled by the country’s central bank, Bitcoin can operate without the need of a central authority like a central bank or a company. This decentralized nature allows peer-to-peer (p2p) networks whereby users can send funds to each other without going through intermediaries.

BTC is created as a reward to the miner who adds a block of transactions in the BTC blockchain. Currently, miners receive 6.25BTC for adding 1 block into the chain. This reward gets cut in half after every 4 years. This monetary policy is referred to as Bitcoin Halving or Halvening, an event that plays a pivotal role in maintaining the limited capped supply of the Bitcoin system at 21 million BTC.

Log Scale BTC price/Year

This is a Major Macro Trend in the Crypto ecosystem primarily because of Bitcoin's dominance, its immutable nature, and rigid architecture. Bitcoin’s Halving creates a supply crunch, while the demand for BTC is ever-growing as people learn more about this new technology, the price of Bitcoin will have nowhere but to go up. Not to mention the looming Bitcoin ETF approvals in the USA, opening gates for institutional Cryptocurrency investments.

Halvening

After April 2024, the reward for mining Bitcoin will be reduced to 3.125 BTC per block from the current 6.25 BTC per block.

Bitcoin Website: https://bitcoin.org/en/

Current circulating supply: 19.62 million BTC.

Price at the time of writing: $46,947.17

How to Invest in Cryptocurrencies

Trading and Investment aren’t the only ways to earn from crypto, but let’s discuss that some other time.

I'll outline some fundamental considerations before starting your investment journey, but there is a wealth of additional factors to explore.

Investment Amount

This is a personal and financial decision, but let me simply this in 3 ways

1. 2-10%: New To Crypto
2. 10 - 50%: If you understand blockchain and crypto and know where you are investing
3. 50-100%: Crypto Professional, but not advisable

% is based on your total Investment Portfolio

Selecting Assets

Navigating the wide range of Assets to choose from it’s very difficult to study each one of them before investing, but with the new wave of social media marketing, you must do your due diligence before investing even a penny into anything.

Here’s a simple formula for navigating the Crypto Market:

1. DYOR about Blockchain and Crypto

2. Invest in Big Market Cap Projects, mainly Bitcoin, Ethereum, and other Top10 cryptocurrencies by Market Cap

3. Diversify your cryptocurrency portfolio with assets in the Top 100 by Market Cap

4. Get involved in the expanding community

5. Investing in projects where you contribute, and projects you identify can produce potential gains (short/ long term)

Coin Market Cap

Entry and Exit

If you’re reading this before April 2024, you are at a golden point in time, where the crypto market is about to pump up in prices over the next 4-6 quarters.

Make up your mind, decide on your strategy, and don’t let emotions play out.

If you’re a beginner crypto investor, your best bet is to Dollar Cost Average (DCA) your investment. Just like a Systematic Investment Plan (SIP) in mutual funds, you can invest in your selected cryptocurrencies periodically to average out the buying cost.

Crypto Index Funds are another structured option to look for, but as the space is still under rapid development, you might not find one so easily. Binance and some other leading centralized exchanges offer such investment products.

Regularly monitoring your Investment is also a crucial part of the process. Occasionally we have seen projects like LUNA, FTX, etc which have lost their value in a matter of hours, entrapping investors and their capital.

As Crypto lacks the guard rails of traditional financial systems, it’s up to individual investors to be smart and get regularly informed about the market and their investments.

General Market Psychology

The most important aspect of Crypto Investment is “EXIT”. If you try to time the exit, it can be profitable, but chances are you’re gonna be stuck with Crypto Assets that can lose 90% of their value. Solana was priced at around $200 in 2021, and it merely traded around $15 for most of 2023.

Again, it’s better to DCA your exit strategy rather than timing the top. It’s better to sell parts of your investment at a regular interval when the prices are appreciated and you’re bagging profit. You need to monitor the macro trends in the ecosystem to safeguard from high volatility.

Some Metrics to watch out are:

• Fear and Greed Index
• 200 Week Moving Average
• Stock-to-Flow model
• Pi Cycle Top Indicator
• The Golden Ratio Multiplier

To monitor the macro trends, tools like lookintoBitcoin, GlassNode, Messari, etc are quite helpful

The Technology Stack Required for Crypto Investments

Wallet

There are plenty of crypto wallets providing a range of functionality and spectra of ownership.

Boom in mixed crypto wallets are on the rise, but I’ll explain 3 types of Wallets that are generally adopted:

1. Custodial Wallets: These are wallets that are connected to your email, phone, or some traditional web2 login methods. These wallets provide an easy on-ramp for users who want to buy assets from fiat currency but lack in providing ownership of assets to its users. These are centralized products and own the assets for you.

2. Hot Wallets: These wallets are part of blockchain systems, and lets you own your assets. METAMASK and Trust Wallet are both pioneer wallets having a large user base. These wallets are created using a cryptographic Private-Public Key Pair. And a 12/24 word mnemonic phase is given to the user as a key while creating one.

3. Cold Storage: These are self-custody safe crypto wallets, used for holding a large number of cryptocurrencies for a very long period. These are the most secure form of wallets, providing maximum security from hacks and scams. TREZOR and LEDGER are pioneering projects in this sector.

There are smart-contract, Account Abstraction, MultiSig, and MPC wallets, but more about them in another article.

Cryptocurrency Wallets

There are a lot of things to consider before choosing your primary wallet, but generally, you’ll be using multiple wallets to manage your digital assets. I encourage you to use centralized products and gradually shift towards decentralized and secured products as you gain more knowledge and exposure to cryptocurrencies.

Exchange

Exchanges are platforms where buyers and sellers can meet to trade their assets.

Centralized Exchanges: These are traditional Order Book Exchanges, maintained on traditional servers with a permissioned listing of crypto assets to be traded on the platform. Although these platforms bring ease in crypto financial features, BEWARE, you don’t hold your assets and most of these exchanges are not regulated by Governments, hence becomes an easy way for owners to get scammed.

Decentralized Exchanges: These are new and modern Automated Market Maker Exchanges, developed in the crypto ecosystem, to enable the financial markets without the need for central intermediaries. These are complex exchanges and are part of blockchain applications.

Although these platforms are hard to understand, they allow you to connect your crypto Wallet to trade the assets that you own.

Centralized and Decentralised Exchanges

Choosing an exchange is the most important, as this will generally be a centralized exchange if you are coming from no crypto background. You’ll most likely be asked to do a KYC (Know Your Customer) to withdraw funds, but most exchanges are in tax-free countries and do not comply with state regulations, but there is no guarantee. Do your due diligence before selecting an exchange according to your location and preference.

Products I use

1. Binance: The World’s largest crypto exchange by trading volume, with $76 billion daily trading volume on the BINANCE exchange as of August 2022, and 90 million customers worldwide. Users can buy, sell, store their digital assets, as well as access to over 400 cryptocurrencies listed and thousands of trading pairs. Binance is a centralized exchange but offers a wide range of financial applications under one roof including spot, options, futures, Bots, P2P, Copy trading, Earn, and more.

2. Zebpay: Crypto Asset Exchange with an established presence in India, Australia, and Singapore. Complies with the Indian government and offers only well-researched crypto assets to trade on the platform. Does not offer p2p trading, hence users need to connect their bank accounts to swap between platform money (INR) into fiat money.

3. Metamask: Leading Self-Custodial Wallet with a safe and simple way to access blockchain applications and web3. Pioneering decentralised crypto wallet which is a part of the blockchain network. You can buy, store, send, and swap tokens, explore blockchain apps and own your data. You can configure any EVM-compatible chain in the wallet with the same key and address, while also enabling multiple sub-accounts. Can be accessed through a browser extension, browser window, and mobile application for Android and iOS.

Personal Preference in Crypto Products

Some other products include Coinbase, Valora, Phantom Wallet, Trust Wallet, and Safe Wallet

Final Thoughts

Scams

With the inception of Bitcoin in 2009, the crypto ecosystem is now 15 years old, and has grown exponentially, but still is unregulated and expects all users to be well informed by themselves rather than trusting someone, especially when it’s the case of money.

Rug pulls and scams are very common in this space, and if you are not careful it can cause to total loss of your funds permanently.

Cryptocurrencies are a relatively new asset class and pose a high-risk level. Where high risk comes with a high reward ratio, it also comes with a decreasing probability of success.

Hence you can decrease that risk by investing with as much as information you can gather, and not just crypto but even about using fiat currency, stocks that you buy, houses you live in, or commodities you own.

Learn About Money

Interestingly, not a lot of people know what money is, and even less about what is the difference between money and currency. Our modern currency system is very simple but is made complex by design to keep the general public in the dark.

If you wanna learn more about it, I refer you to “Hidden Secrets of Money” by Mike Maloney.

A 10-episode documentary that felt no different than a drama web series to me.

Our school systems do not have money in our curriculum yet our life depends on it.

We spend most of our lives worrying bout it, working for it, saving it, spending it, even fighting, dying, or killing for it. It defines our social status and even compromises our morals.

Learn as much as you can, and understand the race before start running. It’s not a 100-metre race, it’s a fucking Triathlon.

Summary

1. Understand the Cryptocurrency market, and learn about macro trends

2. Bitcoin (BTC) and Ethereum (ETH) dominate the market

3. Get started with crypto exchange and wallet products.

4. Invest a small amount of your total investment portfolio

5. Choose from Top10/ Top20 cryptocurrencies, including major portion for Bitcoin and Ethereum

6. Start your systematic investment till bitcoin halving, buy the dips, DCA/ SIP

7. Monitor your investment

8. Create an Exit strategy

9. Claim your profit.

10. Enjoy your lambo!

If you find this article interesting or have any questions, drop down a comment, and share this article with your family and friends.

No point in being rich alone, when there’s no one to enjoy your success with!