Part 1: How to get started with Cryptocurrency? | Mindset and Goals

I’ve always been asked this one question since I started posting about cryptocurrencies again. The question always starts with “How to get started with Cryptocurrency?”. I really don’t know why it’s always that phrase but yeah, we’ll answer it today.

Disclaimer: I’m not a financial advisor, this is just more about sharing personal opinions and experiences. So invest carefully at your own risk.

From the mindset to the actual process. I know these people I know wouldn’t bother reading this at all but I hope those who really wanted to learn would read through. Because I’ll share my real experience and not just the same stuff you can find from people who wanted to hook you into crypto. Although I admit that I’m not an expert, still I wanted to share this so you’ll have an idea and can build your own path.

Mindset matters on Crypto

I think this applies to anywhere and any aspect of life. When you get into something you should not be swayed by your emotions or else you’ll lose the game.

Before you even get started with crypto here are the things you should be aware of:

1. Not everything in crypto goes all the way up. A lot of people get interested with cryptocurrencies simply because someone is sharing their huge returns on social media like TikTok and Facebook. Or someone is predicting that a specific coin will double or give you 100x returns. LOL. Definitely that’s possible but without caution it can go the other way around.
2. Your investment can go up and down in a matter of seconds. And yes you can lose it all in minutes if you’re emotional enough to get swayed by the movements of the market. This happens when there are bad news happen and a lot of people are selling because of fear however if you sell with them you just lost your profits and capital. Well it still depends but I never sell at a lower price than my buying price even I had to wait for a long period of time as long as it didn’t go to waste. But of course it’s up to you.
3. You have to stick to a plan that is based with a thorough research. If your research tells you that this is going to be great in a long run even a huge free fall shouldn’t shock you. A lot of movements in the market is shaky but if you know what you’re doing even -60% won’t flinch you.
   

I didn’t have the mindset 5-7 years ago, I had a -90% negative portfolio due to liquidation and some platforms that shut down. That’s why I decided to stop. Even my blogs about crypto have stopped for a long time due to that heartbreaking moment. However, if that wasn’t sold or if I didn’t mishandle it then it could’ve been a great profit for me.

Anyway, I just got my bitcoins in the past from bitcoin faucets actually until today I still visit faucets even they give only a few satoshis nowadays because I learned one simple lesson from my husband and that is to value even the smallest amount of money.

This is one of my oldest addresses from CoinsPH(they have changed it around 2017/18 so it’s different now) that was used for claiming on Bitcoin faucets. I had different addresses when CoinsPh doesn’t exist yet and imagine how much I’ve lost due to a lack of knowledge and mindset. These were all accumulated from free claims on bitcoin faucets.

If I knew about Nexo in 2018 and had that Bitcoin it could’ve been 0.3211 BTC(738K+ PHP in current exchange) now from earning savings interest. If I didn’t stop even just claiming from the bitcoin faucets I used it could’ve been more.

Bitcoin hits its 2017 all-time high at around 1M PHP and it dropped in 2018 at 100K to 200k PHP if I’m not mistaken. If I studied further about it I would’ve bought those crashes, but I didn’t. So always keep this in mind! MAKE YOUR OWN RESEARCH before getting eaten by fear.

Get ready for the crash

This is the most devastating view for many. But honestly, this always makes me feel excited for some reason. I always have a feeling that these huge dips happen because a lot of crypto whales are simply taking profits to get prepared for a new cycle of trades. Or some liquidated positions for Futures traders. Well, that’s not usually the case but that always comes to my mind.

This is considered as a SALE of the crypto market by many hodlers(people who buy and hold). So don’t always get too excited about joining the hype as these huge dips can happen anytime and if you entered the rally before it crash then you might have missed the opportunity to buy on sale.

A lot of beginners do that and there’s really nothing wrong with it. But if you’re investing bit by bit let’s say you’re just starting out, joining hypes can be risky. You shouldn’t leave your eyes on the chart for that. I normally don’t do that because it’s stressful to stick an eye on a chart and that could affect your decision-making and possibly could lose you on track. Remember to stick to a plan that is backed by knowledge and thorough research.

I always suggest buying stablecoins (BUSD or USDT) if the market is too high to have ready funds for buying dips rather than joining hypes or pump and dumps. It is because if you’re too late you’ll end up buying at a high price and selling at a low price which leads to negative returns or sometimes no returns at all.

So having stablecoins on your account makes it easier to make the purchase because depositing may take some time and you don’t want to miss the perfect timing for your buy.

Identify your goals before starting out

To my knowledge, there are 3 types of crypto investors. Well if not investors just name it or add something else.

1. HODLers – HODL comes from the Greek word HOD, just kidding it’s an abbreviation for the phrase “Hold on dear life”. These are the people who buys and hold like no other else. They usually aim for a long-term investment and they consider their crypto as assets not just currency. Currency is used for payments right? While assets can be for payments, earnings, collateral and all that. Soon I’ll share more ways to hodl and earn passively, so follow us on social media or subscribe so you won’t miss it.
   
   
2. Traders – There are many types of traders too. There we have day traders or scalpers and swing traders. I believe there are more types than those mentioned but these people are the ones who are in to taking profits. Some new traders tend to forget the term “TAKE PROFITS”, because they’re waiting for more. But sophisticated traders sets their goals ahead of time and take profits and minimizes their risk to potential losses. These are intended for short-term to long-term goals.
   
   
3. Mixed of 1 and 2 – I think I fall in to this category but I’m 80% HODLer and just 20% trader. So most of the posts you’ll see in this blog is more about hodling. There are tokens that I collect and used for collateral to borrow and the money I borrowed are traded to profits and most of the profits goes back to my on-hold tokens. You’ll also learn about this soon. But these types of people are aiming for long-term goals but taking advantage of their assets to take profits as well.
   

To compare these types of investors, the traders take more profit if they’re good but they do a lot of work. Since crypto markets are more sentimental than technical based on how I see them. Traders do lots of research and follow the news all the time aside from checking charts.

HODLing can be less stressful that’s why I love it but the returns could possibly be seen only after long periods of time.

For me these are the types of investors in crypto, there may be others but this is what I know and have done so far. So if you’re getting started what would you be in these categories?

Don’t be too greedy

This is one thing I learned from the olden days of cryptocurrency trading. I used to be very greedy and always waiting for more. So if you’re going to trade keep that in mind. Being greedy can lead to potential loss or smaller profits.

Sample chart I have taken just now. This is one of the DeFi tokens I want to buy but still thinking about. Recently it has been added to Binance Exchange. As soon as it gets added the price jumped, if you’re too greedy because of the hype you see on the chart you may have held your position until it dropped. But if you stick to your plan that you would take profits then you could’ve taken higher returns during the peak and buy again on the dip if you really think it’s a good investment.

The next question you may have, “When to take profits?”

Well, it’s really up to you but for me, whenever I see that the peak is getting way too high it’s time to exit. Especially if I am trading on a small market cap. I sometimes feel regret whenever the price is pushed up a little higher, but I learned the concept of not being too greedy so for me it’s better to exit with something on my bag rather than exiting with nothing. How could I possibly predict if it gets higher or not? Nobody knows about the future, some would tell you that it’ll go higher but if you listened and it went well then good for you but if it doesn’t then you might be blaming a friend and I don’t want that to happen.

Market cap is the market capitalization of the token or coin. If the market cap is way too high it’s not very easy to shake the price. High market cap tokens are the top cryptocurrencies like Bitcoin and Ethereum. It will only fall when negative news arises and if crypto whales(aka M/Billionaires) made a move or sold for profit-taking.

But for small market caps, the price can easily go up by hyping it on social media or advertising (like being added on an exchange) and the leaders of the hype can just pull out once they reached their target price. That pull-out could cause a crash.

So always do your research to make sure the project is not just a pump and dump scheme.

I remembered the DOGE pump and dump that happened recently due to hype made by Elon Musk. I never joined that hype because I’ve seen the market of Doge since 2013/14 and it has never reached the price that it had now for the last 6 or 7 years. Although it could’ve been profitable if I am on it earlier. Now they’ve been trying so hard to add some adoption to it like staking and savings but I would not buy that due to its supply.

DOGE and ETH are both unlimited in supply but DOGE doesn’t have use cases(at least to my knowledge) that’s why it’s more inflationary in my opinion.

Anyway, if you have done very thorough research, you’ll learn if a token or coin would be good for the long term. Even I say I wouldn’t buy too much DOGE for hodl purposes it doesn’t mean you can’t. I still have a few of them for trading purposes but I don’t expect too much from it. We’ll never know what happens next, maybe in the future, it will have further adoption.

Getting started for real!

We’ll cover a lot more about it in the next part but here’s a tip while you’re also doing your research about which tokens you should invest in and what you can trade.

You don’t have to wait forever to get started, as a matter of fact, you can start creating your exchange account by now.

Here are the 3 exchanges I’ve used:

1. Binance
   
   This platform is the easiest of them all. They have different financial products that you can get started with. Like having a savings account for cryptocurrency and stablecoin. Stablecoin by the way is a token used in crypto that follows the price of USD, so holding one of those stablecoins are just like having USD. They also offer bank deposit on selected banks like UnionBank. Otherwise you can use debit card for purchasing.
   
   
2. Crypto.com
   
   I also find this site as an easy to use platform and aside from trading they also offer staking(locking of crypto assets for earning rewards) but they have higher requirement of assets to stake than Binance. The good part about this platform is that they offer crypto debit cards that you can use for paying online subscriptions in a discounted price.
   
   
3. Poloniex
   
   This is the first exchange I’ve ever used so it’s basically existed before Binance did. Their interface is not as good as Binance but they also have staking features and you can lend your cryptocurrency to earn interests.
   

Creating an account is free and you don’t have to be afraid of opening an account. A lot of the people I know keep on asking how to get started but they don’t open an account and say they’ll do so when they’re ready. But then again there’s nothing to lose when you open an account. At least you get the chance to explore the platform before getting started.

The verification on these platforms is easy as well and usable in the Philippines so feel free to sign up so you can also explore their interfaces.

In my next post, I’ll share some other tools to get started properly with investing in cryptocurrencies.

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