How to Feel Confident in Your Crypto Investments

The crypto market crashed pretty hard a few days ago, some coins crashed over 50% of their value. During this time many people panic sold, chances are if you are reading this you were not one of those people. You either held strong, or purchased more coin. I filled up quite a few bags this week very cheap that have almost doubled by now. I think a lot of people learned a very important lesson during this dip, and that is how extremely volatile this market can be. The market has also been crashing a lot recently because of FUD(fear, uncertainty, doubt). This FUD is usually spread by people saying that a government is going to ban bitcoin, or someone prestigious on TV saying that it is a bubble. Even if the government in another country tried to ban bitcoin, the techies would find a way around. Regulation will be put in place, but crypto will not go away unless the world ends.

People spread this FUD intentionally to put people in a panic and drive the price of Bitcoin and altcoins down so they can purchase cheaper. Or because they are dumb. It is very important that you do not let the FUD get to you, and in these times of fear you can feel confident and be the person purchasing at very low prices. Try to always keep a stash of btc to purchase with when the market crashes. This is very interesting and not something we are use to, if the American stock market crashed by 50% it would ruin lives all over the country. In crypto when coins crash by 50% everyone says BTFD!(Buy the f*cking dip)...and it is honestly great advice. If you are invested in solid coins they will recover. I will still give you some helpful tips to prevent loss moving forward.

There are steps I take when purchasing my crypto to become comfortable with my investment in cryptocurrency. First I educated myself on block chain technology. In short, block chain technology takes out the third party from our purchases. So instead of making a purchase through eBay or amazon, you can do it directly with the person you are buying from. It also gives us the opportunity to send money to anyone in the world very quickly and efficiently. In the United States this might not seem like a big deal, but if you look at block chain technology from a global perspective, it is going to change lives all over the globe. Block chain is a very deep and complex technology that I will explain further in another blog post. For now please refer to this diagram I made for an idea of how block chain works. Block chain can also be used for smart contracts and a myriad of other things. It is important to note that blockchain technology is still very much in it’s infancy, so there is still so much room for growth. So when you see Bitcoin crashing, rest assured that you are not only investing in Bitcoin, but you are also investing in one of the biggest industry changing tech since the internet, yes it is bigger than email.

Alice and Carl are on opposite sides of the country, do you see how blockchain makes the transfer of information and money so efficient and effective than ever before!

Having a thorough understanding of blockchain technology will give you more confidence in your investments. Another good way to gain confidence in your investments is to do research on the coins you are purchasing. Alot of people sell out of FUD, because they are uncertain and doubtful. This happens alot when you blindly take recommendations from other people, there is nothing wrong with taking recommendations from others, but you should still do your research before investing. If you have a winning hand you cannot lose. I personally take a few things into consideration when I decide I want to invest.

 1.) Market Cap and Community - These two factors will give you a good idea of how stable the coin is, if it has a high market cap that means there is alot of money invested into it. Alot of money means more people, a bigger community means more holders which means more stability.

2.) Development Team - If you know there is a good team behind your crypto, you know they are going to work and always try to make the product better. Be very careful with this one! The Dev team matters alot.

3.) Usefulness - Whether your coin is a proof of stake, or a proof of work, there has to be a use for it. Even better if it has an active use! Such as bitcoin which can be used to purchase certain goods and move money around the world, or Ethereum which is used to transfer smart contracts.

            Last but not least, when Bitcoin is acting uncanny, you can set a stop loss condition. Most people set this for 10% below their initial cost, I set it for 5% below my initial cost during unstable times in the market. So if I buy into reddcoin for 100 satoshis...I would set my stoploss to 95 satoshis or .00000095, and my sell order for .00000100. This way if your coin takes a drop and hits 95 satoshis, your sell order for 100 satoshis will immediately go into affect and you can repurchase cheaper. People often will set stop-loss for 10% lower because only setting 5% lower will have you selling alot of your coins before they have a chance to go into profit. Charts do naturally go up and down and a five percent drop from your initial investment is not a big deal and you coin will VERY likely recover. It is just an extra layer of protection. Here is a diagram on how to set stop loss on Bittrex. Not all exchanges have this feature! 

Blockchain is the future and it is not going away! So don’t ever sell in loss(unless you are an experienced day trader) and keep your btc stash to BTFD!