Last week, we asked you — our Winning Investors — to send us your biggest questions about crypto. And you delivered!
Ian King, our resident crypto expert, wasn’t able to answer all of your questions, but we went through the inbox and saw which ones popped up the most frequently. He’ll tackle those today.
With all that said, let’s jump in!
Our reader Ruth G. asked:
I’m completely new to crypto! How should I get started?
Here’s what Ian recommends:
Hi, Ruth! Welcome to crypto trading.
Investing in cryptocurrencies is a little different than investing in the stock market — mostly because of the way you can self-custody them in your own digital wallet. On top of that, the markets are open 24/7, 365 days a year.
I believe everyone should start with bitcoin and Ethereum. These are the two most important crypto assets and an essential part of every crypto portfolio.
You can start small: Buy $100 in bitcoin to kick you off. That will show you how to do it, and give you a feel for the crypto markets. Then increase your holdings once you’re comfortable moving bitcoin to and from wallets and exchanges.
Next up is Bill R., who wrote:
I’ve heard a lot of talk about crypto wallets. What is that? Do I need one if I want to trade crypto?
Here’s Ian’s response:
Hey, Bill. Thanks for writing in!
It’s pretty simple: You should have a wallet.
Every purchase of any cryptocurrency is held in a wallet.
A wallet is a software program that stores your cryptocurrency.
There are a few kinds:
Desktop wallets — You can download these wallets and install the software directly on your computer.
Exchange wallets — These offer more convenience and user-friendly interfaces. Online wallets, such as Coinbase, can also be accessed through your iPhone, tablet, etc., whenever you want.
Mobile/browser wallets — These are app-based wallets designed for your phone and web browser.
Hardware wallets — These are tiny devices that can be plugged into a laptop to make transactions.
A few examples are the Exodus Wallet, Coinbase, MetaMask and Ledger Nano S.
And our last question comes from James B., who asked:
I’m a long-time stock holder, but with all the buzz around crypto, I’m curious about investing. I’m worried about the risk, though. What kind of risk tolerance does crypto investing take?
Here’s Ian’s response:
Hey, James. That’s a great question, but there’s no easy answer.
For the most part, crypto is one of the riskiest sectors you can invest in. You can see double-digit swings in a day. If you’re a new investor, that can be unnerving.
So, in short, crypto is for the risk tolerant.
But Jeff Bezos, founder of Amazon and one of the richest men in the world, said it best:
“Given a 10% chance of a 100 times payoff, you should take that bet every time. But you’re still going to be wrong 9 times out of 10.”
That might seem crazy, if you’re conservative. But while crypto investing is risky, the possibility of 10X, 50X, 100X gains is more likely.
But that’s why it’s important that you never put more money than you can afford to lose into any single trade.
Learn How to Invest in Crypto Like a Pro
That’s it for this week’s mailbag! If you have another crypto question for us, make sure to email WinningInvestorDaily@BanyanHill.com.
And if you’d like to learn more about crypto investing, I recommend you check out Ian’s Next Million crypto event. He goes over how the markets are setting up for a brand-new bull market, and how you can position yourself now to get ahead.
Check it out here.
And keep reading below for this week’s Winning ideas.
This Week’s Winning Ideas
Trust the Blockchain to Keep Your Data Safe — Blockchain now offers a way to keep your sensitive data out of the wrong hands.
Crypto’s Brutal Winter Is Nearing Its End — It might feel like this crypto winter will go on forever. But there are signs that the bottom is close…
Forget Oil — This Country’s Future Is Crypto — The UAE’s entire economy used to be based around oil. But soon, it could be shifting to crypto. Here’s why.
Crypto Is Unleashing Web 3.0 — There’s a new tech that’s going to keep our data private and our lives secure. And it’s powered by crypto.
Crypto Could Replace the Dollar as the Global Reserve — There are a few reasons a cryptocurrency could be the next global reserve.
Senior Managing Editor, Banyan Hill Publishing