Bad Crypto Investing Advice

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Furious
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Bad Crypto Investing Advice

Post by Furious »

I have no idea what I'm doing, so it makes me an expert on the subject.

Jan. 9, 2020 (info subject to change)

1) You don't own the code, you don't own the coin.
Crypto trading/buying platforms don't have insurance guarantees like stock, commodity, and forex platforms. Not yet anyways. This means if you buy crypto and keep it on the trading platform, a digital glitch/malware can wipe out your investments. I strongly suggest you buy a secure crypto wallet (magic usb dongle) to protect your investment, like the Ledger Nano.

2) HODL (Hold On for Dear Life) investing
You see people day trading/swing trading crypto (even people that are making money just trading the options). I don't recommend doing this. I support HODLing. Three reasons.
1- You can't predict the whales. Whales are the millionaires/billionaires that try to manipulate crypto prices for their own benefit. You have no idea if/when they will do this.
b- Taxes. Crypto in the US is subject to capital gains tax, which is up to 17% HIGHER if you hold the coin for less than a year. Why give the Feds more of your money?
%- Fees. Crypto trading and transfer fees are a small punch in the face. When stock/currency platforms allow trading crypto, the competition will force the fees to drop, but for now, they're kind of high.
☃- You need practice. Get a TD Ameritrade/ThinkOrSwim account and do some mock day/swing trading. Not easy, is it? "Less than 4.5 percent of day traders who try will be able to make a living from day trading." - stolen quote from somewhere

3) Where to buy?
You connect a bank account/credit card to a trading platform, wait longer than you want to, then buy your desired crypto. I use Coinbase because I can download the codes to my Ledger Nano, but there are other crypto platforms, money services (Robinhood and Paypal), and ATM networks where you can buy crypto. I won't review them because I only use Coinbase (which is 'meh' but it works) and I think Robinhood and Paypal financial services suck.

4) What to buy? Regardless of what any financial guru says, no investment is guaranteed to make you money. All investments can be considered bubbles or ponzi schemes if you look at them long enough. That said, I have money in three coins at the time, Bitcoin (BTC), Etherium (ETC), and EOS (Google's up-and-coming coin). Other coins I think have potential are Litecoin (LIT) and Polkadot (DOT), and if I didn't mention your favorite coin I haven't researched it or think it's hot garbage.

5)Why are you investing in crypto?
I like money, and I'm comfortable with crypto's risk/reward ratio.
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Maeve
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Re: Bad Crypto Investing Advice

Post by Maeve »

I understood number 5. The rest of it? Those are definitely words.

Also... How much money could one start with? I don’t mind a couple of hundred bucks, but what would that possibly yield me? Pocket change?

I don’t have thousands to invest in much of anything.
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Furious
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Re: Bad Crypto Investing Advice

Post by Furious »

Maeve wrote: Sun Jan 10, 2021 12:06 am I understood number 5. The rest of it? Those are definitely words.
Yes and it's not the same 4 words over and over again and this makes me proud. *proud*

It'll get easier to invest in when more institutions jump on board. And they are.
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Furious
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Re: Bad Crypto Investing Advice

Post by Furious »

Maeve wrote: Sun Jan 10, 2021 12:06 am
Also... How much money could one start with? I don’t mind a couple of hundred bucks, but what would that possibly yield me? Pocket change?

I don’t have thousands to invest in much of anything.
Last week I bought 65 coins of EOS at $2.80 apiece on Coinbase. its $3.82 right now. I admit it just blew up today, but still... 💲
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Maeve
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Re: Bad Crypto Investing Advice

Post by Maeve »

So... do you just keep them, or do you resell them? (yeah, I don’t know much about stocks either)
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Re: Bad Crypto Investing Advice

Post by Maeve »

Also, what’s the point of them? I understand buying stocks in a company, the company does a certain thing/makes a certain product.

Also also, thanks for answering my stoopid questions!
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Re: Bad Crypto Investing Advice

Post by Jeepz »

This is a perfect example of I never would have asked, but since you're putting it out there, I am interested in hearing more. Maeve's questions aren't stupid, I have no idea either and interested to hear more.
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Re: Bad Crypto Investing Advice

Post by Furious »

Maeve wrote: Sun Jan 10, 2021 1:48 am So... do you just keep them, or do you resell them?
Yes.
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Re: Bad Crypto Investing Advice

Post by Furious »

Maeve wrote: Sun Jan 10, 2021 1:51 am Also, what’s the point of them?
They're a store of work, and later value.

Note: I'm saying this crap in my words, the official explanations are a bit vague.

With Bitcoin, there's only going to be 21 million coins that ever exist. These coins are created by computers solving complex math equations that's called "mining". The mining becomes increasingly difficult and between that, industries/nations recognizing their value, and roughly 15%-20% of BTC becoming lost due to stupidity, BTC is becoming more and more desirable and valuable, literally increasing by 10X every 4 years or so.

It's not a smooth curve, though, after hitting THE high in a cycle, BTC drops drastically and slowly builds up to its next high:
download (54).png
download (54).png (66.39 KiB) Viewed 11365 times
Yeah i know it's too small. Google "BTC longterm chart" for more better lines.

Each coin has a different spin on why they're valuable. Some allow unlimited production, some peg themselves to the value of the US Dollar, some try to be the infrastructure for specific businesses/economies, (some are flat out snake oil scams,) etc.. I got punked a couple of times in the past and either didn't make money or lost money (DOGE, UNO, XRP, BAT), so when I see a coin that interests me, I buy a little and see what happens (like EOS right now). If like the returns, I buy a little more, and continue like that.

Most cryptocoins call themselves currencies but I see them more like securities. You can't exactly pay for groceries with gold or a stock certificate but if they're making you money, why would you want to?
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Re: Bad Crypto Investing Advice

Post by Maeve »

So, hypothetically, if I wanted to buy say, $100 of something right now, and expect to keep it for 5 or 6 years, hoping that it might possibly (yes, I know it might possibly not) increase enough for like, a small chunk for a downpayment on a car (say, a couple of thousand dollars) what would I possibly get?

Yes, I am using possibly and probably quite a lot in those sentences, because I know full well that this is advice and conjecture and not you in any way saying “go out and buy this.” I know you’ve made that clear in your first post, I’m just officially stating that I understand that and that if I take your musings and do anything because of it, that it’s only me who’ responsible for that.

Is bitcoin worthwhile investing in, if there are so few left? Also, you’e mentioned getting a security usb, how do you safeguard such a thing? Are they different than the ones I bought at walmart that won’t work anymore? (Probably because they were chucked in a drawer)
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