Blockchain Investing 101: How to Build Long-Term Crypto Assets

In ~ Bitcoin Market JournalOur investment philosophy is simple. The idea is to buy and hold Bitcoin and a small number of high-quality cryptocurrency assets for the long term (5 years or more).

This simple approach has broken the average stock market returns (paid subscribers can see portfolio performance here).

If you’re new to cryptocurrency investing, here are the ways to get started, ranked from easiest to most difficult.

1) Buy and hold

The easiest way for new investors to participate is to purchase Bitcoin. Services like Coinbase allow you to buy as much Bitcoin as you want, even if it’s just $100, so you can get in on the game. You will learn a lot in the process of buying and holding.

Bitcoin, which accounts for about two-thirds of the market, is still the gold standard for blockchain assets and the U.S. dollar on the blockchain, making it perhaps the safest digital asset. Alternatively, you can buy other digital assets, but if you plan to sell them back for cash, you’ll want to stick to the top 10 assets that have ample liquidity (i.e. buyers and sellers).

• Advantages: Easy, fast and cheap.
• disadvantage: One-time investment; It is not an ongoing strategy.

2) Portfolio construction

Better yet, build a strategic portfolio that combines traditional investments (stocks/bonds). and Blockchain assets (Bitcoin/altcoin/crypto ETF).

Our Blockchain Believer Portfolio provides ready-made templates that you can use to construct your own investment portfolio. Here’s how the “believer” portfolio (crypto investors) compares to the “non-believer” (traditional investor):

The basic rule is to own the entire stock market (about 60-65% of the portfolio), the entire bond market (about 30-35%), and own a small piece of the pie (2-10%) dedicated to Bitcoin and altcoins. no see. %).

Each month, you invest some money into your portfolio, and rebalance twice a year to maintain the same allocation. (Set a repeat schedule for January 1st and July 4th.) This means you may need to sell your high-performing Bitcoin and reinvest in boring old stocks and bonds.

• Advantages: A proven, long-term strategy your financial advisor will approve of.
• disadvantage: It takes time to set up. It requires an investment every month.

3) Invest in Blockstock

You can also invest in companies that are investing in blockchain. These are traditional publicly traded stocks providing “picks and shovels” into the blockchain gold rush. See our articles on Introduction to Blockstocks and Bitcoin Mining Stocks.

Again, you can buy these stocks and hold them (see Strategy #1 above) or use them as part of your overall portfolio (see Strategy #2). This requires a more direct analysis of the underlying company but does not require you to own Bitcoin and cryptocurrencies.

• Advantages: You can easily purchase through existing trading platforms.
• disadvantage: A thorough analysis of each stock is required before purchasing. Individual stocks are not diversified.

4) Cryptocurrency mining

Geeky investors can build custom computers or “mining rigs” to earn cryptocurrency directly. Although it is difficult to make money mining Bitcoin, because there are so many miners competing, there are still many other cryptocurrencies that can make money for miners.

We have a variety of mining content including the best cryptocurrency mining on PC, building a mining business, best Bitcoin miners, cryptocurrency mining on a budget, investing in mining companies, and more.

• Advantages: You can obtain cryptocurrency and tokens with your own computer.
• disadvantage: Hardware costs, electricity costs, and time costs can eat into your profits.

5) Transaction

Trading, the most difficult investment strategy, should be approached like a full-time job. You can make a big fortune before breakfast, but you often lose it during lunch. This is a high-risk, high-reward lifestyle best suited to those with guts of steel and a will of iron.

This means we have expert content from real traders in both traditional and blockchain markets, including articles on the best trading platforms, guides on day trading, high-frequency trading, options trading, margin trading, and popular articles on the best Bitcoin. I’m doing it. Trading bot.

• Advantages: It can be a lucrative full-time job for those with a mind for math and the guts to take a risk.
• disadvantage: High risk and high reward; It takes money to make money.

If we are pioneers in Bitcoin investing, this is the first map of the new frontier. Here are five strategies that have made investors money: If you have any other strategies that we have left off, please contact us. We early settlers must stick together.

Tips for building long-term cryptocurrency assets

1) Do your homework.

Successful investing takes work (there is no free lunch). This means: Before purchasing any cryptocurrency asset, you must analyze it thoroughly.. Just as most stocks will not provide superior returns, most assets will not provide superior returns over the long term. The default answer is “Pass”.

But if you find something that interests you, dig deeper. Research how it is used. Talk to people who use it. Talk to the development team. Explore adoption rates, potential market size, and pricing history. Try our free Investor Scorecard. These will give you confidence about winners and losers, and as we saw earlier, confidence determines price.

Don’t invest in what you can’t explain. Don’t invest until you understand your assets well enough to explain them to your grandmother. This doesn’t mean you need to understand the technical details (you don’t need to understand aerospace engineering to invest in Boeing), but it does mean you need to understand at a high level how it works.

2) Reddit is your enemy.

Reddit is an amazing site for seeing funny GIFs of people falling downstairs, but it’s not the best place to get investment advice. The same goes for other online investment forums. Since there is no entrance exam, anyone can say whatever stupid thing comes into their head. It’s like looking into Mr. Market’s mind.

Successful investors must bet against the market. By definition, she must be right when others are wrong. Reading the “online buzz” about new digital currencies and tokens is like seeing from the air where all the sheep are running, so you can join them. Remember: “Reddit” rhymes with “idiot.”

3) Protect yourself from serious losses.

Never invest more than you are willing to lose. If necessary, be willing to take a 100% loss and consider the tuition you paid to learn valuable lessons.

To protect yourself from risk, it’s best to think of your digital assets as follows: Percentage of total investment portfolio. Keep the majority in traditional investments such as stocks and bonds and allocate a portion (up to 20%) to blockchain opportunities such as Bitcoin, digital assets, and tokenized securities.

You will hear stories of people who placed all-in YOLO bets and won huge. Please ignore this story. You won’t hear about people who go all in and lose. People rarely relive such stories, except to therapists.

4) Get rich slowly.

Let crazy people time the market, trade and buy speculative ICOs. You will hear about the huge profits they have achieved in just a few days. Visualize a force field protecting you from their madness.

Beware of the thought, “I should make 10 times more a month.” This is a gamble. The only people who get rich from gambling are casino owners and the government.

Instead, say, “I’m investing in this digital asset because I really believe in it. I am willing to overcome the inevitable ups and downs.” Think more about marriage than one night stands.

5) Trust your own abilities and judgment.

If you don’t believe in yourself, you fall prey to the whims of Mr. Market. You may begin to believe his predictions of infinite sunlight or his fears of permanent darkness.

You shouldn’t listen to online chat because it represents a hive mind, but must Hear from trusted people with a track record of success. As Ray Dalio advises, “trustworthy people” are:

• Investors who have achieved multiple successes;
• and Here’s a good explanation of how they did it. (They weren’t just lucky.)

But despite this, experts often disagree, so their opinions should be taken with apathy. Instead, find people who will challenge your ideas and polish them like sandpaper on wood. You don’t have to agree with the experts, but you should invite them to poke holes in your thinking. The goal is to find the truth together.

Staying away from amateur opinions will increase your confidence. You can be protected from overconfidence by being challenged by a trusted expert. The sweet spot is in the middle.

6) Remember that the market is never predictable.

Oh, how we wish we had an algorithm to predict the future! We desperately want to believe that AI, technical analytics and elven magic will finally tell us about our best investments before they are made.

You can’t predict how the market will move. If this is true of the traditional stock market, this happens many times. more This is true in the digital asset market. This is like strapping a rocket to a roller coaster.

There is one thing you can control: Yourself.

You can’t control what people say on Reddit, but you can control how they react to it. You can’t control what the news media says about Bitcoin, the future of altcoins, or your specific investments, but you can control what you do about it.

This makes long-term investing as much an internal game as an external one. You need to control your emotions while watching out for the demons inside Mr. Market, FOMO and FUD.

TL;DR (too long to read)

• Do your homework.
• Find great opportunities at reasonable prices.
• When you believe in it, go for it. Hold on boldly.

next stage

If you’ve read all of the above, congratulations! You have an attention span. This already sets you apart from most investors in this space. Now let’s take a closer look.

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