✔️ Starting crypto at random is not a good idea. You need to learn the basics first.
✔️ Look back at the market and understand where your opportunities lie.
✔️ Getting into Bitcoin is never too late.
✔️ Altcoins and exploiting their potential.
✔️ How can you tell which coins with low market cap have potential?
✔️ Starting with crypto: this is the time.
When you get started in crypto, it's always an exciting time. What should you expect from it? Am I too late getting in? What should I pay attention to? Questions, questions and more questions.
For starters, it doesn't hurt to read up. And to read this article. It is impossible to just give you all the tools there are in one blog, so occasionally a juggernaut will fall.
Still, this text can go a long way toward helping you avoid pitfalls and seize opportunities.
This will answer the most important question, which is: When should I start investing in crypto?
Those who start crypto at random may have unpleasant experiences investing in cryptocurrency. So read this text carefully and make a plan, and keep your cryptocurrency safe, you will need it!
- A trip to memory lane
- From 10,000 Bitcoins for one pizza to 10,000 pizzas for one Bitcoin
- The size of your starting stack
- Am I too late getting into Bitcoin?
- Getting started with altcoins
- Unknown gems
- When to start with crypto?
- How does crypto buying work at Anycoin Direct?
A trip to memory lane
If you look back on the crypto market you will more often say to yourself, "If only I had invested in this and that year, I would be rich now." Early investors had plenty of opportunities.
Each coin begins its "career" at a price that is quite acceptable. Bitcoin was worth less than ten cents for a long time. Ethereum cost less than a euro. Dogecoin went over the counter for 0.01 cents.
If only you had invested in these coins back then, right? Well, we all think so.
So some people invested in that time and are now actually rich and sitting in the Bahamas enjoying a Margarita or surfing in California.
From 10,000 Bitcoins for one pizza to 10,000 pizzas for one Bitcoin
Almost everyone who has been in the crypto world for a while knows about that legendary purchase of a pizza for 10,000 Bitcoins. OK, it was two pizzas. Then it's all not that bad!
These two pizzas would be worth 250 million euros today, so I hope Laszlo Hanyecz, the buyer, still has them.
Flattening of the curve
Bitcoin is on a heavy rise, but the mutations are becoming flatter. Since 2009, the price of Bitcoin went up several times each year, but this has come to an end since 2018.
If you compare Bitcoin's price to the early days, you obviously get absurd numbers, but if you compare it to the top of the 2018 bull market (€12,000), the increases have become a bit more "normal."
Where before you could achieve x10 or more within a year it is now x6 within 4 years. That's a whole different ballgame! So getting rich quick by buying Bitcoin has become a lot harder.
You also have to be much more patient and play very well, that is, you have to sell fairly precisely at the tops and buy at the bottoms.
Bitcoin is expected to continue to rise because this is embedded in Satoshi Nakamoto's system. Fewer and fewer Bitcoins will be added and many will disappear into never-opened wallets, a lost hardware wallet, crashed hardware and forgotten balances. Moreover, miners want a higher price as life becomes more expensive and they mine fewer coins.
Bitcoin halving example
Since halving is an economic event and it may still be a bit unclear I will give you an example of the dynamics of halving for miners.
First, the halving means that miners will only get half as many Bitcoins per block found after about 4 years. Whereas before they got 6.25 Bitcoins, in the future they will only get 3.125 Bitcoins if they solve the cryptographic puzzle that gives them the right to create a block. Their income will halve as a result.
Suppose a miner has invested 100,000 euros in a miner for Bitcoin. He has to write it off after 4 years because the miner is run down and other miners have become faster, reducing his income.
We will put the price of Bitcoin at an average of 30,000 euros.
He joins a mining pool because he has no chance of mining a block on his own. He gets 1% of all revenue with his equipment, which averages 5 Bitcoins a year. So his income is 150,000 euros.
He also incurs expenses. The depreciation of his mineral costs him 25,000 a year. Power costs €75,000 per year. Net, he makes €50,000 a year (we'll leave out additional costs like taxes for convenience).
After the halving, his income drops from 150,000 to 75,000. His expenses are still 100,000. After halving, he makes a loss of €25,000 per year. There are now two possibilities. The miner stops, because it becomes economically unprofitable to mine. The other possibility is that the price of Bitcoin rises. The latter is still happening every time after the halving. This is what Satoshi Nakamoto, the inventor of Bitcoin, has thought about carefully in his famous white paper.
Should the price stop rising, many miners will quit. This should make the puzzle easier, otherwise miners will not guess the solution often enough and Bitcoin will fall behind its schedule of 2140, when all Bitcoins must have been mined. Should this ever happen, at some point cheaper mining methods may still allow you to get Bitcoin because the expensive equipment is no longer profitable.
The size of your starting stack
It is usually not a good idea to invest your entire stack right away. If you make a mistake, you could lose everything and have to start all over again. There are quite a few pitfalls when trading crypto, so if you still have money behind you then you can still continue your adventure.
Also, split your stack across multiple cryptocurrencies. That way you're not dependent on the results of just 1 coin. It is also not a bad idea to start with very small amounts or to play "dry", as you can on some exchanges or with some brokers: invest with results without betting money. Your results are virtual, but you can't lose anything. You can see how your strategy has worked.
Am I too late getting into Bitcoin?
This is a question that many ask themselves. The answer to this question is that it depends on your expectations. We expect not, but with crypto anything is possible.
You don't have to buy a whole Bitcoin, either. One Bitcoin consists of 100 million units, called satoshis. You can buy Bitcoin in units, so you can also buy 1 euro worth of Bitcoin if you wanted to.
The crypto market has been gaining market capitalization over all these years. Because there is more money in it, over time crypto is becoming more attractive to invest in and also more mature. People are also talking about it more and more.
Because I see a big role for blockchain in the future, I also see a favorable outlook for cryptocurrency. In my view, it has just begun.
Getting started with altcoins
So, Bitcoin has a fairly predictable cycle every four years. Alternative coins move with Bitcoin. An altcoin is any coin other than Bitcoin.
Altcoins tend to rise more than Bitcoin in a bull market. If Bitcoin does x2 an altcoin can do as much as x5. This is something you can take advantage of. You can check this at CoinGecko.
A general guideline for this is that the coin you buy will more than likely still exist four years from now and its price cycle has an example.
By that I mean that a crypto currency has already experienced at least 1 bull market, so you know somewhat where you stand.
Another aspect you should consider is the probability of a coin collapsing. Here a few things are essential. The longer a coin has managed to establish itself in CoinGecko's top 50, the more likely it will still be there in 4 years.
With a coin that is just entering the top 50, you have no comparison material regarding the previous bull market and the coin can disappear from the top 50 in as little as four years. You are left with a bag full of shit that is no longer worth anything, as happened for example with Terra Luna.
If you know the cycle of a coin, then you can start determining your margin. An example is that I buy Litecoin for 50 euros (established coin) and sell it for 300 euros. When I buy, I then already set the selling price and don't look at it any further. It's a nice margin and it's fairly risk-free.
Note: this is a 4-year plan. If you do this twice, then in 8 years you will have x36! Pretty reasonable, right?
You can get an extra margin by crypto staking. This is definitely worthwhile if you are going to invest in a crypto project for several years. For a novice investor, it is a good option if you get extra coins, so that after a few years you get a solid number of new digital coins without having to pay for such a crypto coin.
This way, you can plan a strategy for each established coin and buy the cryptocurrency that you think is going to give the best results and that you have the most confidence in.
By the way: most coins go down because of a bad team (make mistakes, like Augur's split) or a flaw in the cryptocurrency itself (like Terra Luna's algorithm).
I admit, this is more for advanced crypto enthusiasts. Still, it can't hurt to read through it once so you understand how a cryptocurrency is structured.
If you want to discover an unknown gem you really need to make work of your crypto adventure. High cost, high reward. You will then have to start looking at coins that are still completely unknown and can be found on page 3 or lower on CoinGecko. There are thousands of crypto coins out there.
If they are already ranked higher, then the potential might still be nice, but the point is that a coin can do x100 or so. You will have to work hard to find such a coin, but when you find one you can make a lot of money with a relatively small investment.
Okay, but what should you look out for?
- The website. Did a cryptocurrency bother to create a decent, clear or even beautifully designed website or is it something you might have been able to create yourself? Are there spelling mistakes in it? Gross blunders? Untruths or pure bluff? A good cryptocurrency with a good team will always ensure a well-crafted website on all these points.
- The team. You can't build a good cryptocurrency without a good team. A good team almost always consists of experienced people with high education in an applicable field. Professionals who have gained experience at other large companies are preferable to students coming from a mathematics or IT background. If the team is not listed or they are even anonymous, then this is a so-called red flag. Red flags are a sign that it's best to stay away.
- Competition. What does the coin do? Who are the competitors in this field? Are those competitors beatable? What will the coin be worth if they beat the competition or come close? Suppose you are still unknown and you want to knock Ethereum off the throne because you have come up with a wonderful system that handles smart contracts much better. That's great! Is it possible that this coin will then beat Ethereum? Obviously. Is it likely? No. And if so, it might take decades. A coin that wants to compete with a coin that has a much lower market cap is much more likely to succeed and rise quickly, such as between Dogecoin and Shiba Inu.
- Technology. Have they thought well enough about the design of their coin? Is it an understandable technique? Does the world even need this technology? Are there problems waiting around the corner because it's all way too technical? Are many people and companies going to use their technology?
- Marketing. Are they in the news more often? Do they somehow advertise their coin or network? Have they already brought in major players? Do they have a large network or ecosystem? Do they say something about this on their website?
- The price of a coin. Often coins that already cost a lot of money grow less quickly. If you have to pay 25 euros per coin, many people will give up, even if it is one of the better coins. People like to have a lot of coins.
- The amount of coins there are or will be. If there are billions of a coin and many more to come, many people refrain from buying it because it sounds suspiciously like a shitcoin. This is not always true, but it sounds suspicious. Why do there have to be so many on the market? Where do you put them all? How many coins does the team keep for itself?
- The roadmap. If you see a lot of coins being added in the future compared to which ones are already there then this is not a good sign. The coin becomes worth relatively less with each additional coin due to dilution. If a team says that in three months upgrade X comes out and nothing happens, not even a message or oops, sorry, forgot, my tire was flat or whatever, red flag. If there are all kinds of things on the roadmap that make little difference or implausible things then you have to be careful too. You know the coin pretty well by now if you have come to the roadmap. So you can also reasonably determine whether this roadmap means anything or not.
- If all these things have come through your red glasses then it's time to see if coins are popular as well. You can check social media or technical channels like GitHub to see if there is a lot of talk about a coin. The best coins are surely being discussed, just assume that especially on technical websites the people speaking there know more about them than you do. If no one is talking about your "gem," then it's probably tinsel.
- Selling. There comes a time when you have to part even from jewelry because you want to grab the dough. So, can you sell them on a crypto exchange or will no one want your jewels?
When to start with crypto?
The answer is simple: now.
This does not mean that you just start investing right away. It means you start reading and learning about cryptocurrency, blockchain technology and begin the preparations necessary to become a successful trader. Anycoin Direct has more than enough learning material, for example in our Academy and other parts of our crypto course.
Every day you read about crypto you are more advanced, until one day you realize that you know so much about it that you feel confident buying a coin because you know why you should do it at this time.
Then you are ready to start with crypto.
How does crypto buying work at Anycoin Direct?
Investing in Bitcoin, Ethereum or other crypto currencies can be done through a crypto broker like Anycoin Direct. You can buy crypto with us easily, safely and quickly. Simply enter the amount you want to invest and we will make sure the crypto coins are yours within minutes. You can invest as little as €10 via iDEAL, SEPA, Bancontact, Credit Card, Giropay, SOFORT, VISA, and MasterCard. Crypto buying is done in a few easy steps.
Step 1: Create an account
Buy Bitcoin or any other crypto currency today by creating a free account with us.
Step 2: Choose the crypto
Choose your favorite crypto and enter the amount you want to invest.
Step 3: Receive your cryptocurrencies
Receive your crypto coins within minutes. Invite your friends through our affiliate program and earn another nice penny here.