Step 2: Start small and easy. Passive investing in the ‘blue chip’ coins like BTC and ETH are good to go. This is also called DCA (dollar-cost averaging) and because of the volatility of crypto, you either average up or down. https://test.com/ $50-100/month is a great start here! You can also diversify your portfolio in other investments like ETFs, bonds and the like. You can continue to allocate more once you have a higher earning power. Can be more, it is subjective to one’s life at the moment (I have house renovation payments coming up).
Also since it’s altseason, most altcoins will outperform bitcoin, so throw some money into the ones you believe in and leave it there. Don’t sell if it goes up 25% in one day. Don’t check the prices every 5 minutes, that messes with your emotions. Make goals and stick to them. Write them down.
Looking back I see how much money I lost out on from not holding onto my coins, and instead switching between coins. I was heavy in UNi when it was about $3. I sold around $4 but now it’s at $20. Same with Atom, ALGO, and XTZ. Sure I still made a good return, but I could have made an almost 1000% return if I would have just held it in any one of those (minus XTZ).
Cryptocurrency exchange
First of all: Don’t use Coinbase Basic. The fees on it are exorbitant, and it just goes through the same market under the covers as the (free) Coinbase Pro. You can also swap assets between the two instantly for free at any time, so for the sake of this post I’m considering the best of both options.
Primarily active in the Chinese and other Asian markets, Huobi is one of the largest exchanges by volume. However, there is significant question around if those volume numbers are legitimate, or inflated by wash trading or false reporting, but such things aside, they offer a massive coin selection at competitive rates, fiat trading, and margin/options trading.
Crypto.com is a relatively new player in the scene, but has been rapidly making waves with their aim to blend Centralized Exchanges with DeFi a bit by offering a companion wallet app with free withdrawals from the centralized exchange to the companion wallet. Their companion wallet also supports staking and DeFi liquidity pools, without lockups, directly from the wallet app, though I was unable to determine exactly what coins were supported for the staking options.
Their coin variety listing isn’t stunning, but you can generally get most top 100 coins on Kraken. Passive income wise Kraken offers a double handful of coins for in-house staking at competitive rates without forced lockup times.
While KuCoin technically does not serve US customers on paper, they do not implement any KYC policies and generally have a somewhat openly stated ‘wink wink nudge nudge’ kind of philosophy about servicing places they technically shouldn’t.
Types of cryptocurrency
One type of stablecoin is issued by a financial entity that holds collateral backing for each unit of stablecoin, and the other uses derivative strategies to ensure the crypto asset maintains the value of the underlying government currency.”
Jackson Palmer & Shibetoshi Nakamoto created Dogecoin in 2014. Dogecoin originally started as a joke and rapidly evolved into a top cryptocurrency. The website states, “Dogecoin is the accidental crypto movement that makes people smile!” It’s an open-source, peer-to-peer crypto that uses blockchain technology.
Changpeng Zhao (CZ) launched Binance Coin (BNB) in 2017. It is a cryptocurrency people can trade on Binance, one of the largest crypto exchanges in the world. The Binance blockchain is built on Ethereum and uses BNB as its native token. It was initially created as a token for discounted trading fees but has since expanded into paying transaction fees on Binance.com. Some people also use it for payments, to book travel accommodations, or to exchange for other forms of cryptocurrency.
With additional reporting by Coryanne Hicks This article is not an endorsement of any particular cryptocurrency, broker or exchange nor does it constitute a recommendation of cryptocurrency as an investment class.