By now, you must have heard of Bitcoin.
You know, the digital cryptocurrency that is kicking ass and has now become the single most valuable commodity in the world?
Bitcoin and cryptocurrency trading has changed my life and I have a confession to make; I’m not quite so broke anymore.
But the game has changed over the last couple years. The get-rich-quick cryptocurrency investments that made headlines every month back in 2016 are rare in 2021.
Yet the potential has never been greater! The cryptocurrency ecosystem is more robust than ever and for those that get in now (and get in smart), it’s a life-changing opportunity.
I’m sharing here a recommended investment strategy for crypto beginners that leaves you minimally exposed and in the best position to make massive gains on your capital.
What I’m not going to tell you is what the next booming altcoin will be or how to 10x your money in a month. This information is usually out of date almost as soon as I share it so today we’re going to focus on how to build a cryptocurrency portfolio that will place you in the best possible position to grow your capital and step towards financial freedom.
Quick Information on Building a Crypto Portfolio
- Easiest place to buy Bitcoin – Binance
- Easiest place to buy Bitcoin if you’re American – Coinbase
- Best trading platform – Binance
- Best way to protect your portfolio – Ledger Nano X Hard Wallet
- Safest coins to invest in – BTC, ETH, AAVE, XMR, LTC
- Best app for tracking your portfolio – Blockfolio
My Crypto Investing Beginnings
In December 2016, I started trading cryptocurrency online.
The thing is, I didn’t know much about trading. I put in $9000.
- $4000 of this was my life savings;
- $5000 was on credit cards
I then promptly lost a fuck ton of money as I made stupid mistakes and panic-sold on dips. Pretty quickly, my stack was ground down to $5500.
I settled in and over a few weeks I taught myself how to trade cryptocurrency. I want to stress that I am not a veteran, or even a particularly good, trader.
In fact, whilst I have made a huge amount of money over my first year of trading, I would have made even more money if I had just sat on my initial investment of Bitcoin and done nothing.
For a lazy investor, building a Cryptocurrency portfolio is perfect – open an account on Binance, spread your investment across 5 – 10 coins, protect your investment properly (more on that in a moment), and then just sit back and wait a couple of years.
You will probably make 1000% or more on your investment (depending on when you get involved) if you follow the basic rules of cryptocurrency investment…. Here are some of my tops tips on how to invest in cryptocurrency:
Don’t panic – We emotional meat creatures hurt our own investments by reacting to the market. Dips do happen and often these corrections are needed so the market can cool off before it begins another cycle of growth. Nine times out of ten, coins will dip and then bounce back – higher each bounce. Debilitating crashes do occur – but very rarely to the stable coins that you’ll be buying, you smart and savvy investor!
You don’t actually have to trade – I cannot stress this enough. Split your investment across a couple good coins, throw those coins on a hard wallet and wait two to five years. Only invest funds you can afford to not have access to until the time is right to cash in.
Don’t get crazy greedy – If you want to trade more actively rather than just holding, a good rule of thumb is once you have doubled your initial investment take that seed money out of the coin so you are playing just with profit. Honestly though, I highly recommend just choosing solid coins and then waiting rather than getting into daily cryptocurrency trading – it can be stressful.
Focus on minimising risk – It is absolutely crucial that you put your coins on a hard wallet. That’s rule number one. Rule number two is to turn on 2FA for every crypto-related service you use online
How can I get invested into crypto?
Step 1 – Open an Account on an Exchange
You want a piece of the cryptocurrency pie but your USD and EUR are only good for buying real-world pie. There are only a few mainstream exchanges that give you crypto money for your fiat (meaning arbitrarily-defined government-issued monies). The players to know are Binance and Coinbase.
Binance is the best cryptocurrency exchange for investors on the market. The platform serves low fees and is the only exchange you’ll ever need, from your initial investment to your multi-million dollar-value asset pool.
Binance converts your USD, EUR, GBP, AUD, etc. into BTC. You then have Bitcoin to exchange on the platform for any other cryptocurrencies you want – up to 200 of them! But don’t diversify too quickly. More on that later.
Binance also offers lower fees than Coinbase and has an enormous range of features that you should explore as you grow your crypto investment knowledge. Binance really is the king exchange!
Unfortunately for my Red, White and Blue folks, government regulations mean Binance isn’t available in the U.S. (at least, not for buying coins; you can still trade). So what’s the best exchange for U.S. users?
Coinbase is the leading exchange in the U.S. for ease-of-use and low fees compared with other U.S. exchanges. Annoyingly though, there are two versions of the platform. Coinbase is the beginner-friendly version with a simple and clear UI and limited options for managing your portfolio. Coinbase Pro is the intermediate-to-advanced version for traders who aren’t going to lose all their assets by mistyping a decimal on a stop order.
In this investing guide, we’re only using the most basic features of Binance and Coinbase, so don’t touch Coinbase Pro yet.
Get set up on either exchange by signing up (to Binance here, or to Coinbase here) and verifying your personal details. This is necessary for anyone buying crypto with fiat. Attach your payment method then get a hold of your coins!
Step 2 – Purchase safe Investment Coins
This is a pivotal moment in your life.
No, it’s not when you make $100,000 out of a $100 seed investment. This is when you put away a comfortable amount of your inflating fiat currency into an appreciating asset that will swell over 3 to 5 years.
We’re investing, not playing the lottery.
These are the forerunners of the entire crypto industry. They have been and will be the most relevant digital currencies for a while longer. Others are creeping up, but they don’t have near the track record of these two giants.
The absolute simplest way to get started on building your cryptocurrency portfolio is this: On either Binance or Coinbase, create a buy order for BTC. When that enters your wallet, trade half the value of your BTC (or whatever number you decide) for ETH.
Then stop! You’ve done it. You’re invested into crypto!
But wait! Maybe you know that it’s the other coins – the Doge and Sushi and Polkadots of the world – that have potential to pop off and make 100x your investment! Indeed they do, but they also have a higher chance of crashing or going to zero. We’ll cover my top picks for other altcoins to add to your cryptocurrency portfolio later in this post.
Step 3 – HODL
HODL stands for Hold On for Dear Life or is just a cult misspelling of “hold,” depending on who you ask. Either way, it means to keep your crypto close. Don’t respond to changes in the market. As I’ve said before, our monkey brains making monkey choices will bleed wealth rather than grow it.
The value of BTC and ETH will go down. Then they’ll go back up again. Such is the way of the world, crucially though, you just need to look at the sexy 12 month chart for either BTC or ETH to see that whilst there are pullbacks these coins are growing exponentially in value.
It is the core tenet of this investment plan. Don’t sell. Let the assets appreciate on their own.
Some people make loads of money from trading. I did it myself! But to become proficient, you need to be dedicated to it like a full-time job. Plus, it’s stressful as hell and hella dangerous.
Say it with me:
Step 4 – Secure your Coins
A surefire way to lose your investment is to lose access to your crypto wallet.
Set up 2FA on Binance or Coinbase so no one else can access (and drain) your wallet from inside your account.
Yet your money is still exposed to hacks on the exchange.
Crypto is still a new system. Like the beginning of the internet, there are vulnerabilities that will be exploited before they’re patched up. Every year, a few hackers break into exchanges to drain networks of digital wallets within seconds.
With a hard wallet, this can’t happen. Your crypto is in a physical object in your hand, not attached to the internet. You access your money by attaching that wallet to a secure desktop application, then when you’re done your wallet is again offline.
I own and use both hard wallets; and I started with the cheaper version of each with less memory and then had to upgrade because I’ve added lots of different coins into each. I find the Ledger interface and software easier to use and understand (plus, I prefer the look of the Nano X to everything else).
A feature of both wallets is that they come with a seed phrase. This is a string of 24 random words that is the key to backing up your wallet in case the physical device goes missing. Your crypto is only as secure as your seed phrase!
I actually once LOST my cryptocurrency hard wallet. It was terrifying; fortunately, I had the seed phrase. So I bought a new wallet and effectively downloaded all my balances onto this new wallet by duplicating the lost wallet using the seed phrase.
Write your seed on paper and never online. Both devices come with a card where you can record the phrase, so use it. Make a couple of copies. Store these copies in secure locations – a safe, a bank vault, a weatherproof time capsule buried in the permafrost of Siberia. Leave the seed. Forget about it. Pull it out again if something happens to your hard wallet.
Get a hard wallet. Know how it works. Keep your seed safe. Keep it safe somewhere else. (And then keep it safe somewhere else.)
Step 5 – Keep Learning; Slowly Branch Out
You’re already in the game. What you’ve done so far is enough to see return on your initial investment.
But I believe the future of finance is in cryptocurrency and so I want to take a moment to introduce you to some other cryptocurrencies I believe are worth adding to your portfolio.
There’s loads of opportunity as the market evolves and realizes its potential. Organisations are creating blockchains and digital currencies for every purpose, and these systems are gaining more and more traction online.
But here’s where we leave the realm of certainty and begin speculation. I can’t predict which of these projects will be relevant in a year’s time. The market moves dramatically and you need to be up-to-date on the state of crypto at the moment you decide to invest in an altcoin.
If you’re in the game now, do your own research. Learn how decentralised finance works and get familiar with the main 20 or so projects.
I can’t tell you what to put your money in next month or even next week, but I’m keeping my eye on about 15 projects I am particularly excited about.
This is why I’ll share with you what I’m invested in right now. Big disclaimer: this does not constitute financial advice, you’ve gotta put in the research on your own to decide the right options for you.
Which coins should be in your Cryptocurrency portfolio?
I have diversified into multiple different coins and my cryptocurrency portfolio is split into several tiers of investment. I have selected which coins to invest in with care and every coin is on this list for a reason. Some of these coins cost thousands of dollars a pop, others are mere cents.
I have built my cryptocurrency portfolio using a risk-reward formula that is acceptable to me. You’ll have to decide how much risk you want to take on and that should influence which coins you invest in.
I recommend keeping at least 70% of your portfolio in safe coins: Bitcoin and Ether.
What are your favourite coins for 2021?
I intend on covering this in much greater depth in the near future but I wanted to give you guys a few crypto trading tips here and now… Coins which I personally have invested in and which I feel could x 10 in 2021 are: Solana, Polkadot, Chainlink, Republic Protocol, Compound, Aave, Monero, Dash, Matic, Celsius, Unicoin, Sushi, Serum. I cover some of these coins in further detail later on in the post – scroll on down to see…
How can I buy more coins?
Buying more coins to expand your cryptocurrency portfolio is a smart idea – the more you diversify, the better your chance of hitting a coin that goes to the moon. I do however recommend keeping at least 70% of your portfolio in relatively safe coins like Bitcoin, Ethereum, Litecoin and Monero.
Most cryptocurrencies can only be bought on trading exchanges and not on Coinbase and some cryptocurrencies are only available on one or two exchanges.
The majority of cryptocurrencies can only be bought with Ethereum or Bitcoin so you have to buy one of those before you can purchase the smaller coins.
To properly expand your portfolio, you will need to join a trading platform – is the largest and most trusted trading platform out there and it lists a wide selection of decent coins.
You will need to first buy your Bitcoin (use this link for an extra $10 of BTC), you will then send your BTC to a cryptocurrency trading exchange.
Once you have your BTC in place on Binance or another cryptocurrency exchange, you can then expand your portfolio and buy other coins.
Everybody says Crypto is a bubble…
Is there a risk to investing in cryptocurrency? Hell yes there is. The Cryptocurrency market is still young and volatile.
Frankly though, in my opinion – everybody should throw at least a couple of hundred bucks at crypto to hedge their bets. You may lose your money and if that freaks you out, maybe this isn’t for you. Here’s the thing though, only with risk can one hope to profit – this applies to all aspects of your life.
If this is the future of money and you miss out, you’re screwed.
How can I properly protect my investment?
I am very glad you asked!
Cryptocurrency thefts have occurred numerous times and some folks have lost millions.
There are two ways to securely protect your money…
Firstly, if you are keeping money on Binance or Coinbase, you MUST turn on 2FA. This adds an extra layer of security and makes it harder for hackers to get at your coins.
If you’re holding a large investment, like me, then I strongly recommend getting a hard wallet to protect your crypto portfolio.
I’m using the Ledger Nano X – this is, simply put, the most secure and easy way to protect your coins.
Tell me more about your favourite Cryptocurrencies for 2021
Alright, you asked for it, here’s a VERY BASIC breakdown of some of my top picks for 2021, these are just my opinions, this is not financial advice. Always do your own research. I am not responsible if you lose your house.
Bitcoin | BTC
Almost every crypto-list today starts off with the king – Bitcoin! It was the first cryptocurrency to step blinking into the bright light of the world. Bitcoin has surpassed all expectations and continues to grow in value and popularity – despite recent setbacks and a lot of FUD from trolls and haters (read: traditional banks) online. Will Bitcoin continue to increase in value in 2021? Recent trends say: Yes! In my opinion, any cryptocurrency portfolio should hold some Bitcoin.
Bitcoin (BTC) has been engaged in a predictable up and down pattern where it absolutely crashes in a brutal bear market and then sky-rockets during the next bull period. Bitcoin held steady at around $19,000 in December 2017, and then sure enough – crashed big time to around $3,200 at the end of 2018. At the time of writing, February 2nd, 2021, the price of Bitcoin is relatively stable between $32,000 and $37,000. Bitcoin ran again literally just yesterday thanks to an Elon Musk tweet, gotta late that guy, and personally I predict Bitcoin will hit $200,000 a coin by the end of 2022 – I am aware that number may sound crazy, but that’s what my analysis is telling me.
- Bitcoin is capped at 21 million coins. There will never be more Bitcoin than this.
- Widely accepted, easily sold, bought, and traded for altcoins.
- Already established as an accepted payment method in millions of places.
- Best thought of as a store of value, like gold.
Ether | ETH
Ethereum is an open-source development platform that runs off Ether, which is why it’s exciting for many, and also the reason why it’s probably going to remain at the head of the pack for a very, very long time. It’s the world’s second-biggest cryptocurrency and is used by developers around the world to develop and publish decentralized applications (dapps).
Ethereum’s technology is already being used by super-popular projects around the world, showing great success, and offering a glimpse of a stable crypto future. I love Ether and hold a significant percentage of my portfolio in Ether.
- Central currency for the Ethereum network and is easily traded for other ERC-20 tokens
- Dapps made with Ethereum almost never crash and can’t be shut-down
- Proven corruption-free because it’s impossible to censor
- Smart contracts can be used for fundraising easily – Ether was popular with ICOs
- No limit in Megabytes
Monero | XMR
While Ethereum focuses on dapps and BTC is best thought of a store of value, Monero brings something new to the party – privacy! This technology actually uses cryptography to protect all incoming and outgoing addresses, as well as the transmitted amounts. Monero is an all-in-one solution for all privacy enthusiasts, and as such, it holds tremendous potential for great success in the crypto world.
- Privacy at its best – no one can see your balance, anywhere
- Irreversible cryptographic technology is the security chief for Monero transactions
- Its coins cannot be traced in any way, shape or form, due to its encryption
Litecoin | LTC
Created by Charlie Lee, a former Google engineer, Litecoin is an open-source payment network that operates on a global scale. It is not controlled by any centralized power, and it uses the “scrypt” as proof-of-work. It is similar to Bitcoin but has the advantage of offering a faster rate of generation and therefore faster transactions. This is one of the main reasons why its enthusiasts continue to invest or hold onto the coin even after finding out that its founder sold his stack.
- Visible founder, Charlie Lee, fully invested in promoting Litecoin
- Implemented the SegWit technology before BTC, offering greater capacity and faster transactions and lower transaction fees
- Shows potential to become ‘the next Bitcoin’ in terms of rising in value exponentially
Cardano | ADA
Cardano is a fully open-source, decentralized, public blockchain and tradable cryptocurrency. Cardano is very similar to Ethereum, and the team wants to build on that. Cardano aims to operate a global smart-contract platform which will deliver much more advanced features compared to its competitors. Loads of existing investors are excited because Cardano is the first blockchain founded on scientific philosophy, and also the very first provably secure proof of stake algorithm.
- Cardano can be updated WITHOUT hard forks
- Plans to offer negligible fees (even for smart-contracts) in comparison to Bitcoin and Ethereum, hence offer a far better (and faster) service
- Plans to make wallets and smart contracts incredibly user-friendly, unlike Ethereum’s platform
- Its developers claim to own world’s first proof-of-stake mining algorithm that’s mathematically 100% secure.
Aave | AAVE
Aave is an exciting newbie to the space and has already increased in value 600% over the last 6 months. Aave offers a platform for lending and borrowing other cryptocurrencies built on a decentralised network and is completely trustless, meaning it requires no human input to run. It’s positioned as a market-changing DeFi application, so we fully expect the Aave-native asset (AAVE) to grow massively over the coming years.
- Good asset to grow your crypto skills beyond just holding.
- No verification required to buy and use.
Polkadot | DOT
Polkadot isn’t trying to reinvent the wheel. It’s trying to stick four wheels together to build a Tesla! What I mean is, they’re not trying to be Bitcoin or Ethereum. Rather, Polkadot is bridging the blockchains of both to build one giant, cohesive cryptocurrency network.
Polkadot is the best attempt yet at making one big crypto economy. Expect DOT to swell over the next year.
This one’s tricky for US users to get hold of, but everyone else can buy through Binance.
- DOT’s use in validating network transactions drives the value up over time
Solana | $SOL
Solana is designed to reinvent the wheel. Cryptocurrencies are positioned to overtake the standard (legacy) finance system that runs the global economy today. One problem though – crypto systems aren’t yet able to handle the volume of trades and transactions that the real-world finance giants can (think Visa and Paypal).
Solana is building a lightning-fast, high-bandwidth network that can scale to hold the world’s transactions. Will they get there? I’m not the most qualified to speculate. But I’m pretty sure SOL has a big run ahead of it.
- Empowers ultra-fast trading
- High SOL balances can be staked to earn rewards
Matic | MATIC
Matic is an Ethereum application that is attacking the issue of scalability from another angle. They tout a commitment to user experience – making the process of decentralised finance (DeFi) easier for the masses.
They’re motivated to scale big on the Ethereum network and then branch out to other blockchain networks. As this happens, you’ll see MATIC (the coin) reach the moon! If you buy in, hodl like your portfolio depends on it. MATIC is currently just cents a coin 😉
- High trading volume puts pressure on the coin to grow in value.
ChainLink | LINK
Link is an exciting project that I expect to get lots of airtime in the next couple years. It can be used to power a lot of online applications and transactions, even outside of finance.
I won’t get into the details (of which, truthfully, I’m not 100% clear myself) but the overwhelming number of practical use cases indicates that LINK (the coin that powers ChainLink) is a valuable asset that hasn’t reached its market peak.
- Growing network of use cases means the asset will appreciate.
- Traded and stored almost everywhere that handles ETH
Please note that I have a RUDIMENTARY understanding of some elements of trading cryptocurrency… I’m a blogger, not a financial expert. Always do your own research and draw your own conclusions.
How I Passively Grow my Crypto Investment
Having a healthy lump of money in crypto is the first step. The next step is to grow your crypto assets.
If you’ve read this far, you know I’m not a huge fan of trading. Day trading is a bad option for most people because of likelihood of human error plus the anxiety of watching those candles rise and fall.
That’s why I grow my portfolio passively using a cryptocurrency trading bot, the renowned Notorious Bot. Having a bot that trades for me, without emotion, using an advanced algorithm, allows me to grow my portfolio in the background without it cutting into my time or stressing me out.
You can grow your portfolio the same at ProCryptoBots.com.
Cryptocurrency Investing FAQ
What is the best cryptocurrency exchange?
Binance is the best cryptocurrency exchange because it’s beginner-friendly and versatile. It will stick with you from your crypto infancy through to the end. Unfortunately, Binance isn’t available for U.S. users, so…
What’s the best crypto exchange in the U.S.?
Coinbase is the best option for dipping your first toe in the water. Coinbase Pro is the more versatile option with a slightly higher learning curve.
Is cryptocurrency a good investment?
BTC and ETH are good investments for many, but not all. Every investor must do their own research and assess opinions from multiple sources to decide if crypto is a good investment for themself.
Can I invest $100 into Bitcoin?
Yes, you can and should buy fractions of a Bitcoin and other cryptocurrency. You can invest any amount into the main coins.
Disclaimer: I am not a professional (or even a veteran) trader. I am an intermediate trader with a passion for cryptocurrency. I am disclosing my own ventures in crypto because cryptocurrency trading does make up a chunk of my online income and I want to be 100% transparent with you when it comes to making money online. Investing in cryptocurrencies carries a risk – you may lose some or all of your investment. Always do your own research and draw your own conclusions. Again – this article is aimed purely at advising; draw your own conclusions on whether cryptocurrency trading is right for you.
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