An Experiment in Cryptocurrency Investing: Here’s What Happened.

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Cryptocurrency (crypto) is a digital monetary system designed to make transactions quick and secure. Although the most-popular crypto (Bitcoin) has been around since 2008, I’d consider it a relatively new market.

I’ve been tracking Bitcoin (the first decentralized digital currency) in the news for years, but never made an investment. In August 2017 I started to regret it, but preferred the stock market for my “play money.” I opted for some of the more affordable alternative currencies like Litecoin and Ethereum. On August 5, 2017, after saving money (by skipping countless work lunches), I purchased 0.5 Litecoin and 0.5 Ethereum (screenshots below) using Coinbase.com (please use my referral link).  Coinbase is a US-based, easy-to-use cryptocurrency platform with a fantastic phone app and is probably the most trusted platform right now.

By December 2017, only 4 months passed and I had already easily doubled my initial investment, these returns rivaled or beat even some of the legendary FAANG stocks (Facebook, Apple, Amazon, Netflix, and Google) I had invested in during that same period. I started doing more research and decided it was time to shift essentially all my “play money” (money not used for bills) into cryptocurrencies. To be clear, I accepted that I may lose 100% of this money, but so far I’ve done well :-).

On December 14, 2017, I got serious. I created an account on Binance (referral link) and sold almost all my traditional stocks to focus on cryptocurrencies. Binance is a Chinese-based cryptocurrency exchange that is currently the largest volume exchange in the world. Binance doesn’t work with fiat currencies so they can bypass China’s regulations, and are strict when it comes to adding new tokens to the exchange. You’ll need to buy currency in Coinbase.com with USD and then send Bitcoin, Litecoin, or Ethereum over to Binance.

It’s only been about 2 weeks since I’ve seriously started this “investing journey” into cryptocurrencies and wow I’m glad I made the dive!

Results

Some of my first purchases (latest prices are automatically pulled):

  • Ripple (XRP) at $0.59, now [currencyprice currency1=”xrp”  feature=”prices”]
  • Cardano (ADA) at $0.2, now [currencyprice currency1=”ada”  feature=”prices”]
  • TRON (TRX) at $0.02, now [currencyprice currency1=”trx”  feature=”prices”]

I’ve since made later purchases (latest prices are automatically pulled):

  • Wabi at $1.67, now [currencyprice currency1=”wabi”  feature=”prices”]
  • Substratum at $0.57, now [currencyprice currency1=”sub”  feature=”prices”]

Total Returns (so far):

Without revealing my investment in dollars, I’ve seen about 60% – 80% growth in total. I expect even greater growth through 2018, but I guess time will tell.

Investing Philosophy

I’m not a financial expert, and this space has significant risks! I’m investing because I believe it presents some opportunities, so here is my thought process:

I’m not a financial expert, and this space has significant risks!

  1. Does the technology solve a problem? Does it have utility? For example, Ripple (XRP) claims it’s the fastest and most scalable digital asset, enabling real-time global payments anywhere in the world. Ripple is being used by banks today and has actual applications already. Cardano claims to be third-generation cryptocurrency and aims to solve the technology problems that riddle Bitcoin.  It even challenges Ethereum as only a second-generation solution. However, it’s still largely an academic project and not used in transactions at this time.
  2. How is the team?
    Investing in crypto means also investing in its team. You must assess the team’s technical ability, the leadership vision, and their existing connections to help improve your investment’s feasibility.
  3. How has it performed so far?
    I avoid buying when something is already at it’s peak and always wait for significant dips.
  4. After all this analysis, what’s should be my final sanity check?
    I personally use Wallet Investor since they actually try to tackle the impossible task of forecasting the market with some specificity.Beware of pump and dump schemes and see if the cryptocurrency has some actual investment on Coin Market Cap . The ones with larger market caps are probably a bit safer (which isn’t saying much in a highly volatile market).

Should I invest?

Short Answer: I’m not a financial advisor (and please consult yours before making any decisions), but if you have some cash burning a hole in your pocket, why not throw some money at cryptocurrencies?

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