Just in the last few days, when the Bitcoin price was soaring and the press and media were reporting on the increase, dozens of inquiries came to ask, which was the easiest way to buy Bitcoin safely. I describe everything in great detail in my bestseller “Cryptocurrencies simply explained“, which we recently updated to the latest version (https://geni.us/crypto_simple), but I understand that many people just want to use a short and simple guide. This is exactly what I want to give you in this blog post.
A warning first:
unfortunately there are many people and companies, which offer rip-offs and scams around cryptocurrencies and want others to invest their hard earned money into get-rich-quick-schemes. Therefore, always be especially careful when people try to pressure you into an investment or promise seemingly low-risk high-returns.
Step 1: The right capital amount and timing
The question of the appropriate time is just as difficult as the amount of capital one should invest into cryptocurrencies. There is no right or wrong, however each individual must answer these questions for himself. Personally, I think that 1-10% of one’s liquid capital is a good amount to invest. If you have 10,000 USD on your side, 500 USD makes sense, for example. Why? In the unlikely event that everything is gone, you might be angry, but it is not the end of the world. However, if the 500 USD turns into 50.000 USD, you will be very happy. The reality however, will be somewhere in-between the two scenarios.
Nobody knows the right timing to invest either. That’s exactly why I recommend to halve your investment or even divide it into thirds and invest it in two or three tranches – for example 2 × 250 USD over a period. Never get tricked into running after the market, but rather wait a bit before buying until the market goes down – it always does at some point. In the crypto industry we speak of FOMO – Fear of Missing Out.
Step 2: Getting USD onto an exchange
In the second step, we select a suitable exchange, which should be reputable and charge as little fees as possible. Theoretically you have a huge number of options, but I can recommend the following from my own experience:
Coinbase, if you like to pay by credit card: www.bit.ly/exchange_promo
Kraken, if you like a more traditional exchange and pay by bank transfer: https://kraken.com
Cake, if you would like to have an all-in-one platform where you can pay by many different means of payment and also get interest on your bitcoins: https://bit.ly/CakeDeFi_JH
The procedure is always the same: You transfer your fiat money there either by credit card or bank transfer and then you have these USD on your account.
Step 3: Exchange fiat for bitcoins
In most cases, you make a transfer and now have euros on the platform. Now you simply exchange your euros into bitcoins. This works differently depending on the platform, but should be relatively intuitive. I recommend that you buy the first 50% of your capital that you are willing to invest in crypto at the market price.
For the other 50%, I would give myself a period of time when I would reinvest. Either after 1-2 weeks, 1-2 months or when you see that the bitcoin price has dropped a lot.
Step 3.1 (optional): Exchange Bitcoin for altcoins
Altcoins (alternative coins) are all cryptocurrencies that are not Bitcoin. They often have other characteristics and some have very different applications. However, most of them are still at the beginning and it is very uncertain how things will develop.
In 2021, there was an extreme altcoin boom. In some cases they made several 100x within a few weeks or even days. As fast as the rise has come, so has the crash of most altcoins. Some investors are partly today still more than 95% with their capital in the red. That would be with an original $500 investment, only $26 today!
With this I do not want to scare you at all, but only prepare you so that you do not get into FOMO.
I keep my crypto portfolio rather simple with my 3 main coins Bitcoin, Ethereum, and DeFiChain, and even my crypto portfolio is only one part of a larger investment portfolio which also includes stocks, commodities, bonds, etc.
Step 4: Store your cryptocurrencies securely
These exchanges have a huge disadvantage: you don’t control your coins yourself, but you have to trust the platform. If it gets hacked or goes bankrupt, your money is probably gone. This is exactly why I recommend to secure your bitcoins or other cryptocurrencies via a hardwallet and control them yourself.
Step 5: Stay always up-to-date
The crypto market moves incredibly fast and it difficult not to miss any important news among all the noise.
However, my free newsletter makes it easy for you. Just register here and get regular insights into the most important market events and my thoughts on them: https://ceonews.cakedefi.com
With these five simple steps, you should not only be able to buy and hold cryptocurrencies safely, but also sell them at a convenient time. I hope I have given you some important tips.
If you want to know even more about crypto, blockchain & co, just follow me on social media – you can find the links below
Have fun and good investments,
Your Dr. Julian Hosp
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