The Cryptocurrency and ICO Rulebook
The coin markets are a strict school – especially when you are new to the topic and just tapping in. There are 1001 ways to get burned quickly, and suddenly you hold more bags than on a shopping tour with your girlfriend. Unfortunately bags of shitcoins instead of lingerie. Cryptocurrencies are soaring, and therefore you will notice a growth of worthless altcoins and scammy ICOs.
In this post we collected the most important learnings for cryptocurrencies and ICOs – use it as a rulebook and you will be more happy with your results!
Investing in Cryptocurrencies
- It is normal to have a massive loss from time to time – on the other hand, you will have sexy 500% gains on other coins over time if you invest time to do your research correctly. It is always about to get more heavy gainers and to weed out out the losers fast.
- Stop investing in hyped coins once they increased already very much. It is likely that you step into it at a peak and end as a bag holder. There are pump and dump groups that are responsible for this short-term growth and merely hop to the next dead coin for a quick profit. Don't just feel that something is right – use your analytical brain to decide where you invest.
- Don't get scared if Bitcoins soars or drops – it affects the altcoin market negative, yes – but this won't last long. What did you buy first when you entered the cryptogame? BTC maybe? And then you took a % and invested it into altcoins, right? You are not alone with that. So don't shit your pants, just sit it out and don't look too often at your portfolio. The money will flood into altcoins again over time.
- Check the projects you invested in twice a week. Follow them on twitter and check if they are active.
- Don't develop an emotion to your coin, don't think this or that is cool and they used a fancy graphic or have a fresh new website. Only the numbers count and the ROI they generate for you, nothing else.
- Check the GitHub of the projects. If there are months without any progress, get out.
- Once a new coin hits the exchange, the time has shown that is usually hitting its all-time high after one year – and many of them never reach these heights again! Keep that in mind and create selling strategy. Don't get too greedy. Have a plan, get in, get out, determine the next project with your research strategy. Get in, get out.
- For most of the coins that are worth it to invest in them, Bittrex is enough. There are exceptions though if you look at WTC for example.
- Get a hardware wallet, once your funds grow. We recommend a Ledger Nano.
- Don't use futures and margin trading as a newbie – crypto is volatile enough for high gains, and the risk is much lower without any leverage.
- Always have some free BTC in your exchange wallet for quick opportunities.
- Never trade outside an exchange, if there is no escrow. Just don't do it.
- Use Twitter, follow all the coin companies to stay ahead with their news and find exciting sell opportunities.
- The young crypto market is driven mostly by the news and by emotions. Check coinmarketcal.com to stay ahead of what is going on.
- Share the knowledge you gain with the community. Be helpful. Get involved and get your rewards. Once you start building your contact base, you probably will get some info.
- Don't ask on internet forums and facebook which coins you shall invest in. Most people are clueless like you but will shill you the coins they hold themselves, due to their wishful thinking. Remember No moon, no lambo, just hodl.
- It is your money – don't use shitty passwords. There are many bad guys much more smart with computers than you. So stay safe, save your passwords non-digital only.
- Mining is not really rewarding anymore in the most cases. Before you stack up tons of graphic cards, do your research like with any investment you would do.
ICOs (Initial Coin Offerings)
- For ICOs: If you as the group of investors can buy only less than 50% of the total amount of tokens – stay away.
- If you missed getting into an ICO, don't worry. Past has shown, that once these coins hit the exchanges, their value will often drop below the ICO price so you will be able to get it even cheaper. This happens especially on big ICOs with massive marketing campaigns. Whenever newbies have to wait months for the release of their tokens, they tend to act emotionally. Once released they urge to transform it back to BTC or ETH somehow and sell it without waiting for the gains.
- If you invest in an ICO, make sure that you have the patience to wait for the results. Just don't sell once they release the tokens and it hits the exchanges. Good projects need time!
- Overly marketed ICOs will often fail – always check the MVP and if it looks trashy to you, don't expect it to better later.
- The most significant ROI is possible with the right ICO picks.
- Don't invest into overhyped ICOs and ICOs that pop up everywhere with ref-codes.
- Watch out for underdogs instead of hype ICOs. See an example in our comparison between Halo and Cobinhood.
- Check the team – each of them. Check the roadmap. Check if the token has a use on its own. Check the MVP.