Cryptocurrency is the hot topic at the moment and what everyone wants to know is “should it be in my portfolio and how can I get my hands on them?”. I had a Q&A with one of my good friends and a young investor I admire, Olamide. I asked the questions and he gave me his very honest answers.
[PS, If you haven’t read my Introduction to Cryptocurrency Part 1, you can do so here.]
It was quite enlightening and I hope you enjoy!
1. What is your knowledge of cryptocurrency – how did you first hear about it and why did you think/ are you thinking to invest in it?
I would say I have a more than basic but less than expert knowledge of cryptocurrency. I first heard about it in June of 2017 through an American mentor I was speaking with about markets at the time.Back then I had very limited knowledge and invested quite a bit of money into Ripple, only to withdraw it all only the next day because of anxiety and constantly looking at the chart.
2. You’ve seen all that happened towards the end of last year to Bitcoin and the sudden interest in it, does that scare or overwhelm you as an investor? If so why, if not, why not?
It doesn’t scare me at all, and definitely does not overwhelm me. It brings a lot of volume into this scene which is both good and bad. Bad in many ways including the temporary shutdown, and a permanent slowdown of transfers and verification processes, of many exchanges (like Binance) due to overwhelming demand meaning a lot of missed opportunities. Good, however, in the sense that speculation pumps prices up even further.
3. Why do you think other investors haven’t endorsed bitcoin?
I think people are either scared of the high price, so are only expecting it to come down. Or they think that they’ve come to the party too late and won’t benefit too much as it’s shot up a lot already.
4. In your opinion, what do you see happening in 2018 to the world of cryptocurrency and how are you looking to take advantage of it?
A lot more coins being created, some being successful but a lot being frauds, and the already established coins going from strength to strength. How I plan to take advantage is to get in on the new cryptos that will have a genuine positive use in society. So joining ICOs [Initial Coin Offerings] through public sales. I’ll also try and keep an eye on the market and trade the popular coins (catch them low, usually when they hit support levels, and ride them back up).
5. What are some of the ways people can invest in cryptocurrency? What are some of the pros and cons you’ve found?
The three ways I’ve found is through fiat currency, through actual cryptocurrency itself and through ICOs.
- Fiat: Fiat means actual money, so depositing your money onto an exchange and buying crypto through that. The most popular exchange for this is Coinbase. [There’s also CEX (UK) or CoinMama]
- Crypto: For the smaller, lesser known, upcoming cryptocurrencies, you would probably need to exchange some Bitcoin, Ethereum or Litecoin to acquire them. To do this, buy one of the three cryptos and move your BTC, ETC or LTC from the exchange you bought it from to the exchange that you want to buy your new crypto through your wallet.
- ICO: This is when a new cryptocurrency that has been created wants to go public and raise funds by selling a certain amount to private and public investors. To involve yourself in this, research upcoming ICOs and do thorough due diligence. I would recommend serious research as some new cryptocurrencies don’t have the potential for growth as they don’t have much real life benefit so will be a waste of time investing.
6. What is one thing you wish you knew before investing in cryptocurrency?
One thing I wish I knew was just about the whole market sooner, so I could have started educating myself sooner. Hindsight is 20/20.
7. Do you keep up to date on what’s going on with cryptocurrency, and if so, what platform do you use and how frequently?
I’m in a few Whatsapp group chats with mass investors and people quite a bit involved in the cryptocurrency market. Aside from that I follow the Reddit threads of the cryptos I’m interested in and read quite a few articles in LinkedIn.
8. Thinking more broadly as a young investor, whats one thing young people need to do before they get started in investing?
Make sure you are comfortable to lose what you put in. If you are not, anything less than what you put in will give you a heart attack. Also come in prepared to be taught lessons, like patience and perseverance.
9. How do you educate yourself about such things?
I believe experience is the best teacher. You learn a lot by going through things yourself.
10. Finally, whats one piece of advice you would give you to a younger you when it comes to investing?
Sometimes just take the risk and trust in your decision. I invested in Ripple in June 2017 but withdrew after less than 24 hours because of fear. If I had kept my money in I would have made 10x the amount in Ripple’s good times and no less than 5x in its bad times after its recent crash.
In general, cryptocurrency is a very volatile market to get into and as Olamide has rightly said, only put in what you can afford to lose. Cliché but very true. Although Bitcoin is the most popular coin right now, there are many alternatives though some are not real and are only here for the hype. Some other interesting ones are Ripple, Ethereum and Litecoin. There are “white papers” you can read to understand what the creators of the coin want to do with it. Here’s an example of the white paper of Bitcoin and Ethereum. When thinking about which crypto to invest in, getting a good understanding of what the coin aims to do is important and should align with your investment goals or subjects that you are passionate about.
Please don’t let FOMO [‘Fear of missing out’] throw you into the deep end of cryptocurrency. Don’t put all your eggs in the same or one basket. Have a good understanding of any coin you choose to buy and keep up to date with them by frequently reading. I’d recommend the Cryptocurrency threads on Medium.com or Reddit.
Invest wisely and monitor your investments regularly. This is not an investment advice and you should consult a financial advisor for more information.
Got questions or comments? Please leave them down below or email firstname.lastname@example.org. For getting at Olamide, find him on LinkedIn at Olamide Dele-Adeniyi or Instagram @olamiday_.
Hope this has been helpful!