Crypto Tips
So you’re thinking it might be time to invest in some crypto. You keep coming across stories about professional traders buying into what many see as a bear market and offering investment advice for newcomers like yourself. You’ve read a new story or two about digital assets and the future of smart contracts and sat by as cryptocurrency prices have skyrocketed for some investors. You may even have that one neighbor or coworker who won’t shut up about his “decentralized finance strategies” or the constantly shifting total value of something he calls “non-fungible tokens.”
Seriously, no one likes that guy. But still, you can’t help but wonder…
Maybe you’ve decided to take the plunge and make crypto part of your larger investment strategy. You’re aware that it’s a highly volatile market and that trading crypto doesn’t work quite the same as traditional stocks, bonds, or other financial products. Still, digital coins are one form of risk you haven’t tried, and you’ve decided you’re willing to risk at least a few dollars for the chance of serious profit.
There’s no shame in sitting out the cryptocurrency boom. (Some would call it a cryptocurrency “bubble.”) Many successful investors don’t have a single Bitcoin in their portfolio. If you decide you can afford a little risk, however, and wish to join the current wave of crypto investors making the news, here are a few crypto tips to keep handy as you move forward. Think of it as a checklist for avoiding fraud, mitigating risk, and improving your odds of making a small profit before it’s all over.
Crypto Tips and Best Practices
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When you first invest in cryptocurrency, don’t invest more money than you can comfortably afford to lose. This is good advice for any investment, but especially true for digital assets.
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Subscribe to a weekly newsletter or two. Benefit from the insights of others and get to know the markets before committing.
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It’s called “copy trading.” Several crypto exchanges offer this option, but don’t just automate it and let it go. Watch and learn, then experiment with your own investment strategies.
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Crypto has no inherent value. It doesn’t matter how great prices are when you buy if you can’t sell your digital assets to another investor at a profit.
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There’s more to cryptocurrency than Bitcoin or Ethereum. Maybe that’s a coin you want to invest in for your future, but don’t stop there. Do a little research on trading cryptocurrencies beyond the top names.
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The only thing booming more than crypto trading right now is crypto fraud. There are elements you can’t control, but don’t lose money because you ignored an obvious sign of trouble or let your hopes override your judgment.
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You can bet on crypto futures without actually buying or trading cryptocurrencies. Hedging is when you predict what will happen in the markets with specific cryptocurrency prices. You can benefit from high volatility while limiting your personal risk.
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You don’t have to become an excerpt on every detail, but learn the basics and the vocabulary before you begin. It’s unlikely you’ll win at any game without first understanding the rules.
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There are pay services and apps which compile crypto news for users, or you can find a reputable website or two which seems to keep up on crypto news and explains it in useful terms. It’s best not to rely on a single source… but worse not to have any regular sources of information.
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A Hot Wallet may serve your purposes when you first begin and your investments are minimal, but if you’re going to get serious about the amount of money you invest, get equally serious about the security of that investment.
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One of the worst approaches to any type of trading, speculation, or investment is to “tinker” constantly with every choice you make. Not only does this cause your fees to quickly add up (and offset any benefit you may gain from each change), but it suggests you lack a serious investment strategy to begin with. Of course you can change directions if something’s not working, but don’t let that become your norm.
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There are plenty of reputable organizations and individuals out there… and plenty who aren’t as reputable. Avoid going “all in” with anyone untested or if you feel any discomfort. Sometimes our subconscious is trying to warn us - if we’ll only listen.
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While you want to remain in charge of your own investment decisions, crypto is a world in which it’s simply impossible to stay on top of events 24/7. Let automation services or trading bots do some of the grunt work for you, based on your priorities and your presets.
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If you forget your account number at your local bank or credit union, you can call an 800 number or go into a lobby and retrieve it in a few steps. If you lose your credit cards, they can be frozen and replaced. If you forget or lose your crypto keys, however, that money is just gone - period, forever.
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Obviously none of us want to be foolish or get taken advantage of. Most of us think we can spot a scam or a reckless decision a mile away… when it’s someone else getting sucked in. Just like with gambling, bungee jumping, auto racing, or sharing your true feelings with someone who might not feel the same, humans easily get caught up in the excitement and risk severe consequences. This should not be one of those times.
Crypto Education
You don’t have to become an expert on every technological detail of cryptocurrency or keep up with every one of the thousands of cryptocurrencies out there at the moment. But if you’re going to invest your own hard-earned money into digital assets, you should absolutely take a little time to make sure you understand the basics of what you’re getting into.
The basics are easy enough. You’ll find articles here on Goalry (with more coming all the time), as well as plenty of information about investing and risk-management in general which apply to crypto as well as everything else. Google can take you to another dozen reliable sources. Never rely on one exclusively - hunt for those which seem most informed, use the clearest language, and don’t shift every conversation to a hard sell for their own program, product, or “opportunity.” Pay attention to which information is confirmed from site to site, and which terms seem to mean different things to different people.
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Once you know the basics, consider trying out a few of the Facebook groups focused on Crypto. (Keep in mind it’s still Facebook, so filter everything you read through that reality.) If you’re a podcast person, there are plenty of crypto-themed options. As with everything else, sample several and avoid relying on one source for everything. Periodicals, news services, the options are endless. Keep in mind that you don’t have to get involved in NFTs or try “mining” the latest altcoin in order to track market values and trends for the major cryptocurrencies. It’s OK to limit your speculation to the rise and fall of popular cryptos.
Go ahead and listen to your brother-in-law or that guy at work who seems to know so much. But don’t count on them for most of your information. If you’re not personally informed, you shouldn’t be personally investing.
Crypto Scams
Cryptocurrency has often been likened to the mythical “Old West” in terms of the freedom and relative lack of structure or limitations in play. As with anything, the greater the freedom, the greater the risk. All of the usual scams and deceptions are in play when it comes to crypto, along with several unique to digital assets.
While it may be impossible to anticipate or control every danger, here are a few general tips you probably already know, but which we easily let ourselves overlook when we’re caught up in the moment.
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Let’s take a moment and count the times that a truly great opportunity has come from an unsolicited email or phone call. I don’t know about you, but my math says roughly “zero.” If they have to come looking for investors, it’s probably not a very good investment.
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We’re so accustomed to entering usernames, passwords, and PINS, answering security questions, providing names of family or friends, and identifying those stupid traffic lights in those tiny, tiny little pictures, that we don’t always stop to ask if something smells wrong. Crypto is entirely digital - your codes and information are everything. Always take a moment to double check URLs and pay attention to possible red flags before offering up your information.
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Under no situation is Elon Musk desperate for your help or anxious to share an amazing opportunity. Neither is Mark Zuckerberg, Matt Damon, or Dave Ramsey. Beware of strange men falling in love with you or young women finding you oddly attractive from afar, then suddenly wanting to go into business with you. As to politicians, do we really have to say it?
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This one is not unique to crypto, but it’s a goodie. You receive an email with just enough personal information to get your attention (your real name, maybe your hometown or current employer, etc.). They know what you’ve been looking at online, and they’re shocked! You dirty old thing. They may even have pictures taken by your own computer camera! It would be a shame to send all that to your wife, friends, or dump in on your social media account. Better send us your crypto keys.
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Scammers know that none of us want to admit we’re confused or feel stupid. They take advantage of the rapidly changing world of digital assets to play on this very human characteristics. “Of course you know what’s happening with NFTs at the moment?” “I’m sure you’ve realized that smart contracts, new coin offerings, and non-binary convertible tokens are where the real growth is happening!” That kind of thing. No one legit wants to make you feel stupid, and nothing good comes from decisons made to protect our egos. Until you know what you’re doing, don’t do it. Period.
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Many of the security problems with cryptocurrency involve hackers and manipulation of the system beyond your individual control. There’s always risk involved with crypto, but your ability to manage that risk varies widely. Sometimes the only way to avoid risk altogether is to choose a safer form of investment.
Meet Goalry - A complete financial solution
At Goalry, we offer information and insight about all sorts of things related to your personal or small business finances. We believe in what we call “unified finance.” Getting out of debt is part of investing in your retirement, which is impacted by your access to the best insurance rates, loan terms, or real estate values.
Too many institutions artificially divide the many areas in your world which involve your finances and other resources. This gives us many limited perspectives instead of one, connected understanding. We chase parts of our financial prosperity instead of recognizing that money is money is money - whether we’re spending it on unnecessary streaming services, using it to pay for the things we claim are important to us, or doubling it over time through smart investments. Each financial decision we make impacts all the others - for better or for worse.
We’d like to help with the “better.”
Crypto can be very exciting, and yes - some people are making a lot of money with it right now. We’ll support your decision if you decide to enter that arena as well. In the meantime, don’t forget the many less-turbulent ways we can help you reduce your debt, sharpen your skills, and prepare for your future. Take a look around, and let us know if you have any questions.
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