Crypto Investing – Cryptocurrencies are some of the most complicated assets out there, especially since they are, by and large, quite unregulated and subject to a lot of speculation and conjecture. Not all of the material information about these assets are known by retail and institutional investors. Tether, for instance, up until 2019, claimed that each one of its coins was backed by one dollar in the U.S. Federal Reserve–a claim which turned out to be false and for which it had to backtrack and update it to also include loans to corporate companies.
In addition to this, these are complicated assets, with sophisticated theories and fundamentals underpinning them, so being an educated investor is important here more so than perhaps anywhere else. Below are 6 educational tools for crypto investing.
Newsletters and Research Services
Any time you are learning an asset class it is a good idea to subscribe to leading newsletters and research services. Research services exist for all financial instruments, from stocks to crypto. These are usually weekly updates that contain analysis and picks that are either free or paid. Many people swear by the newsletters and research services they use and have made good money following the advice and pick of the people they subscribe to.
Often this material is put out by investment firms or by individuals that used to head up successful firms who now trade on their own. One thing to keep in mind with these sources of information is that you should always do your own due diligence before taking financial advice from anyone. Even the experts and highly experienced people get things wrong.
White Papers
Every cryptocurrency has a white paper behind it and it is usually the first and most important piece of documentation attached to a new digital asset. White papers are written by the founders and developers of the currency to help sell it and create market interest and they are similar to a prospectus for a debt or equity issuance. White papers are designed not to appeal to investor emotions, but to give people all of the relevant and material details about the currency using graphs, charts, and quotes.
White papers are generally written by technically-minded people for technically-minded investors, which means they are usually quite dense and require a base knowledge of cryptocurrencies and blockchain in order to seriously engage with them. A good white paper should also communicate the market need that a new currency serves either better than or is different from the way in which it is already met by other existing currencies. They can be over 100 pages long and they are necessary reading if you plan on making large purchases.
Forums
If you want to learn the ropes in any niche, investing or otherwise, one of the best things you can do is spend time observing people who are already plugged in and experienced. There are myriad online forums where cryptocurrencies are discussed by people who have been around and on the cutting edge of the industry since before 2010, who have seen the developments and understand where the market is going, the risks involved, and how to navigate the exchanges.
Places like Reddit, for instance, while often filled with a lot of unreliable information, are very often great places to learn, at the very least, how crypto traders and investors talk, what they are talking about, and could be sources of tips and interesting pieces of new information you can apply to your own trading strategies. You will also get different and new perspectives from your own that could help you see a potential investment in a different light or perhaps a flaw in any strategies you are currently pursuing.
Books
If you want to learn about a topic in-depth and at your own pace, your best bet is still to pick up a book. Many books have been written on crypto investing, particularly Bitcoin, over the last decade, and many more will continue to be written. There are different books geared toward different audiences and different types of investors, with varying background knowledge and experience.
If you want to understand cryptocurrencies, a good idea is to start with the largest and most famous of them: Bitcoin. Start reading up on Bitcoin–its history, about blockchain fundamentals–and you will gradually develop the knowledge base required to engage at a deep level with the big questions regarding investing, the markets, the technology, and whether a particular investment is right for you.
Industry Publications
Whether you want to stay on the cutting edge of industry conversations, see what leading thinkers have to say about cryptocurrencies and where the market is heading, or simply want to start immersing yourself in the important conversations and issues, subscribing or regularly reading publications like Bitcoin Magazine, Blockchain News and Coin Sutra should be an important part of your daily crypto education.
A good way to organize your daily crypto reading material is to subscribe to a content aggregator like Feedly, which allows you to make custom reading lists. Simply create a “cryptocurrency” tab and fill it with the publications you would like to stay abreast of and little by little you will build solid crypto knowledge that will help you make better-informed investment decisions.
Mock Trading Accounts
There is a wide range of cryptocurrency trading simulators out there, including the Bitcoin Mining Profit Calculator, Bitcoin Hero, Altcoin Fantasy, eToro, Bitmex, Niffler, Spark Profit bitcoin code, and Coin Market Game. All of these will give you the chance to make simulated investments in real time and observe how the price of the coins fluctuates. Read what industry insiders and experts are saying about these movements and you still start to gain a better understanding of some of the things affecting the prices of these assets and be able to see them actually taking place with “coins” you control.
Conclusion
Crypto investing is one of those things where you have to educate yourself. While some of the major financial designations like the CFA are starting to incorporate more cryptocurrency education into their formal training material and programs, you can’t really go to school to become a crypto trader. Luckily, the self-education options out there (many of them completely free) are numerous and always expanding. Keep the above educational tools for crypto investing in mind and make sure you equip yourself with the knowledge necessary to safely wade into this promising but highly complicated asset class.