Our Approach to Cryptocurrency Investing
When I wrote my cryptocurrency investing book in September 2018, I presented a simple cryptocurrency investment strategy.
- Start investing with any amount you want (I used $10,000).
- Invest the same amount each month (I used $100).
- Invest in small amounts in Bitcoin, primarily stocks and bonds, either directly or through spot Bitcoin ETFs.
That’s it. Set it and forget it.
The goals are: We make it very easy for average investors to build long-term wealth.while Minimize risk.
I couldn’t find a financial advisor interested in this idea.
I couldn’t get a banker interested in this idea.
Zero interest. Not even “huh.” I felt like a wild-eyed, white-haired prophet shouting from a city square while people were minding their own business.
Slowly but steadily, this strategy has made much more money for investors who believe in it. Believers outperformed non-believers even as old-school financial advisors stood by and watched in disbelief.
Today, the new “financial advisors” are content creators on Reddit and YouTube promoting meme stocks and hyped NFTs.
It’s madness on both sides. Either crazy conservative or crazy dangerous.
At BMJ we preach the “Middle Way”. Our community has been rewarded with slow, steady growth, saving us a lot of money, heartache, and stress while enjoying the benefits of Bitcoin.
The numbers speak for themselves. So why aren’t more bankers jumping on the Bitcoin bandwagon?
Your Banker Is Confused About Bitcoin
My wife and I were at our old bank recently, and the young banker tried to explain to us again about their wealth management services.
“When will I start receiving Bitcoin?” I asked casually.
“That’s right. We don’t do that yet,” said the young banker. He lowered his voice. “Some of us believe cryptocurrencies are the future, but for banks like us, it just takes time.”
“Well, I had some time.” I answered. “Bitcoin was invented in 2008.”
He laughed nervously. “It’s confusing.” he answered. “So you have some Bitcoin, right?”
“this same bank “In 2013, we sent a wire transfer to Belarus to buy Bitcoin,” I said.
“Don’t get him started.” her wife pleaded.
“I wrote a book about it,” I continued.
“That’s great.” The banker answered. “I want to read it.”
“I brought a copy to the bank when the book was published,” I answered.
“Don’t joke.”
“The story is in the first chapter.”
“what.”
“I bookmarked it.”
“You don’t say.”
“The bookmark contained a code to open a Coinbase account and redeem $25 in free cryptocurrency.”
“awesome.”
“Then you could say I paid the bank to read the book.”
“Has anyone read the book?” he asked, fidgeting uncomfortably.
“I think you’re answering that question.”
I understand that it is difficult to receive Bitcoin from large commercial banks. But come on, guys. You should at least have a game plan by now. “Let’s wait and see” is not the game plan.
In ~ Bitcoin Market JournalWe have a game plan.
Reddit experts are idiots
On the other side of the spectrum are Reddit’s experts who continue to pump meme stocks, Dogecoin, and NFTs, among other obscure investments. (This also applies to YouTube, “crypto Twitter” and Discord.)
Remember: “Reddit” rhymes with “idiot.”
Pictured above: Financial advice from Reddit.
Unlike the highly regulated, professionally licensed world of asset managers, anyone with a keyboard and opposable thumbs can post to sites like Reddit, YouTube or SeekingAlpha. An important thing is, You don’t even know who they are. No name needed!
That means you have no one to blame but yourself if you blow all your money on their outrageous fan theories. It also means you never really Find out if they are working for you or secretly working for a hedge fund or cryptocurrency startup. This is McSketchville in a nutshell.
In ~ Bitcoin Market Journal, we are committed to transparency. We use real names. We disclose our investments. And unlike other cryptocurrency sites, We do not accept advertising.
Bankers know nothing. The internet is crazy. This is why we pursue the ‘Middle Way’.
Our General Investment Principles
(Click on the title to learn more about each principle.)
Invest in things that add value. Whether you invest in stocks or cryptocurrencies, look for companies and projects that make human life better, faster, and easier. And find a company that does this well, with good management and great products. Avoid spitcoins and meme stonks.
Invest in education. Get smarter about investing by reading timeless books from our Read and Grow Rich list. If you are unemployed, use the time to learn a new skill. If your productivity drops, work twice as hard on the things you care about. Every recession has its upsides.
Invest in #1 or #2.. Technologies tend to coalesce into one or two big winners: duopolies like Mac and Windows or monopolies like Google. We think of cryptocurrencies as a “sector” that will eventually create a winner-takes-all or winner-takes-all scenario. We always try to invest in future category leaders.
Invest in your productivity. We highlighted Ethereum (ETH), which makes blockchain application development easier, and Uniswap (UNI), which makes token trading faster. These projects increase human and money productivity. Good investments increase productivity.
Think long term. The principle is the same as long-term probability. It’s hard to say what will happen. next weekBut it’s easy to see how things play out. next few years. If we make smart long-term investments and wait patiently, we could be like the investor who bought Bitcoin at $100.
Our Cryptocurrency Investment Principles
(Decide whether to purchase Bitcoin, tokens, or cryptocurrency.)
The hardest part is getting started. The easiest way to get started is to buy some Bitcoin (even just $100) from a reputable site like Coinbase or Binance. I can do it today.
Think of cryptocurrency like a company. This is a core principle. You can think of buying tokens for a good project like buying stock in a good company.. (Note: technically cryptocurrencies are not companies, but we are Invest Just like them.)
Understand the fundamental “business”. For example, we should always know: What on earth does blockchain do?. We should be able to explain it in simple language and (if possible) be able to use the product ourselves. We need to know if it makes money, how it makes money, and where that money goes.
Find token deals at discounted prices. You can also find projects that are likely to be undervalued. “It’s on sale.” One day, you could buy Bitcoin for $60,000. Any other day it’s $30,000. Guess what? same bitcoin. (See the metrics below to see if your token is cheap compared to its price.)
Qualitative, quantitative, price. There are three tests to take before investing in blockchain: qualitative (Basic Business Assessment), quantitative (basic numeric evaluation) and price (Decide whether it is cheaper or more expensive than the other two products) We call this QQP.
Avoid fees. Fees are the silent killer of cryptocurrency assets. Fees and often taxes are charged for each transaction. Cryptocurrency fees are much worse than traditional financial systems. Do not move items unless absolutely necessary.
Earn reasonable (but not unreasonable) interest rates. Earning interest (or “yield”) on your cryptocurrency assets is like earning money in a savings account. Beware of ridiculously high interest rates. If it seems too good to be true, it usually is.. Use our Best Rates section to get good interest rates from quality providers.
Cryptocurrencies should be a piece of the pie. Don’t invest your life savings in Bitcoin. Instead, prefer a sensible investment plan that builds long-term wealth. Getting rich quick is really difficult. It’s much easier to get rich slowly. We want to shout one word from the rooftops: Diversity!
Cryptocurrency Investment Indicators
(Click on the title to see a sample chart. Or, become a premium subscriber to receive the chart.)
Daily active addresses. Our thesis: Blockchain is about people. The number of people using blockchain is the most important driver of value.. because of this, Daily active addresses is a useful metric., shows the “customers” of the cryptocurrency “company”. (Sign up for our premium newsletter to get daily actives delivered to your inbox.)
total revenue. Our Topic: Cryptocurrency “profits” (like transaction fees on Ethereum) are how cryptocurrency “businesses” make money. Smart investors look for projects that generate the most cash.
Total Protocol Revenue. This is money returned to the token holder or the company’s coffers (either paid out to a liquidity provider, like Uniswap, or to an NFT holder, like OpenSea). You can roughly think of it as similar to a stock dividend.
total value locked. TVL indicates how much money is held or “locked” in a company’s smart contracts. Our argument: TVL is roughly equivalent to deposits held by banks and can indicate the strength of a cryptocurrency company.
top layer 1. Our Topic: The underlying blockchain, also known as L1, is like the operating system of Web3. We predict there will be two or three big winners that will dominate the Internet of tomorrow.
Best cryptocurrency exchange. Our topic: Centralized and decentralized crypto exchanges are arguably the most important applications of blockchain. Smart investors look for which exchanges will be #1 and #2 over the long term.
Best Lending Protocol. Our topic: Lending and borrowing is another proven use case for blockchain. Smart investors look for companies that will dominate the lending market over the long term.
Best DeFi Protocol. Our topic: DeFi companies are the fintech giants of the future, disrupting or replacing all of today’s existing payment and banking systems. Beware the winners. (See our DeFi investment guide. chapter 1 and Part 2.)
Best NFT Collection. Our thesis: NFTs constitute a special area of cryptocurrency. This is only suitable if you really enjoy collecting. Nonetheless, try not to exceed 1% of your portfolio. (Please refer to our NFT investment guide.)
All other metrics, including all the crazy ones that cryptocurrency traders use, are largely ignored.
Easy rule of thumb: If the number of real people using a blockchain is booming and they are getting real value from that blockchain, it’s probably a pretty good long-term investment. (Even better if not everyone is rushing to buy it. It’ll probably be cheaper.)
10 Commandments of Cryptocurrency Investment
I’m not a financial advisor, so I can’t tell you what to do. I can tell you what I do in the form of the following 10 guidelines:
- Keep working at your day job
- Invest money automatically every month
- Focus on simple strategies
- Set it and forget it (avoid fees and taxes)
- Find opportunity in crisis
- Say “no” to most investments and “yes” to a few big investments.
- Talk to smart people (preferably in person) to improve your ideas.
- Be confident but humble (have strong beliefs, but they may be wrong)
- Educate yourself to become rich through reading
- Give back both your money and everything you learned.
This is the middle way. Not too conservative, not too cuckoo. It’s a path we can all follow.
TLDR (too long to read)
BMJ has a simple investment approach.
- Buy and hold Bitcoin.
- and a small number of high-quality cryptocurrency assets,
- Long term (5 years or more).
Our mission is We welcome the next 100 million cryptocurrency investors to build a life of financial freedom and independence..
Using cryptocurrency and common sense, we are developing the next generation of great investors.
We focus on long-term value-based cryptocurrency investments. We rigorously analyze and evaluate cryptocurrency assets and approach them with timeless investment techniques.
And we’re transparent about returns that far exceed the stock market.
There is a lot of gambling in this space. Many people try to get rich quick. We want to help you get rich. And make it stick.
We are here to help you develop a long-term winning strategy.: Build a life of health, wealth, and happiness.
Money is not an end in itself. It is a means to an end. The end result is a balanced life full of experiences, meaningful relationships, and meaningful work.
Join our community and let’s get there together.
