Cryptocurrency Starter Kit & Resources
Resources for Investing in the Digital Asset World
People have been asking me to share information on basic resources for investing in cryptocurrency, so here is a break down of some things you should know if you choose to invest. Please remember that while we are moving out of the “Wild West” phase of cryptocurrency, investing in this asset can still be a wild ride at times. For this reason, keep the following rules in mind:
Buying Cryptocurrency
The most reputable exchanges in the United States that I know of to buy cryptocurrency are Coinbase, Gemini, and Swan Bitcoin. I started out using Coinbase, but predominantly use Gemini now. One major pro of Gemini is that they have an “Earn” function in which you can stake your cryptocurrency and receive up to 7.4% APY in rewards. However, I don’t advise leaving too much money on any exchange, but more on that below. One major pro of Coinbase is that it has the Coinbase Pro component. Coinbase Pro is a platform on which you can trade different digital assets. However, if you are new to this world of crypto, I don’t advise becoming an active trader. I barely trade and I have been studying this world for the last three years. I recommend buying some Bitcoin and some Ethereum and holding it through this cycle, if not for the much longer term. These digital assets are building blocks for the Information Age and Web 3.0. (Again, though, please remember that I am not a financial advisor and that this newsletter is for educational purposes only.)
I have also heard a number of good things about Kraken, as well, but I haven’t used it, as we aren’t permitted to in New York State because of the BitLicense, nor have I used Swan Bitcoin, though I do have an account there. Binance is the biggest cryptocurrency trading platform in the world. It used to only be for trading from one cryptocurrency to another, but now you can buy cryptocurrency from fiat currency via the site. This is the U.S. version of Binance, which we aren’t allowed to use in New York due to the fact that New York, once a magnet for money, is looking to keep itself in the dark ages. (Technically, it’s because of this aforementioned BitLicense. Creating this was likely as smart as stopping Amazon from coming here a few years back.) Also, if you live outside of New York, you can use the highly reputable BlockFi as a means to both purchase cryptocurrency and earn yield on it.
You can also purchase “Bitcoin”, “Ethereum” and other crypto assets via platforms like PayPal, Venmo and Robinhood. This might be a good idea for you if you don’t want to self-custody the assets (I will explain more on what this means below), but know that you are buying an “IOU” to the asset, much like the way you are buying an IOU for gold when you purchase a share of stock in gold. These IOUs will likely pay out, but, I believe that the lending business for crypto is just getting started and you cannot lend your crypto for a return when you only own the IOU for it. For this reason, I recommend buying on sites like Gemini or Coinbase.
And if you don’t like any of these options, you can also wait for the Bitcoin ETF (a Bitcoin financial product that will trade on via the stock market) to launch at some point this year. Eight different institutions have applications in to create one of these, and there is a decent likelihood that some sort of ETF will exist before the year is out. Oddly enough, this might come into existence right in time for a massive pump in the price, and then a big decrease in it. Keep in mind that we are in a bull market, and, for the most part, the longer you currently wait to buy Bitcoin (or other cryptocurrencies), the less of it your dollar will buy.
Storing Cryptocurrency
Storing cryptocurrency can be slightly complicated. You don’t want to leave large amounts of it on exchanges like Gemini or Coinbase because if someone gets your password to these sites, they can steal it. Also, if these sites get hacked, the assets can also be stolen. While we have come a long way from the Mt. Gox hack of 2011, and centralized exchanges like Gemini (which is now insured by Lloyd’s of London) and Coinbase are much, much more secure than their predecessors, there is still a small degree of risk in leaving your digital assets on these exchanges. For this reason, you should consider buying a Ledger or a Trezor. These are essentially external hard drives for cryptocurrency. With these, you can take your money offline. This is called keeping your assets in cold storage, where as leaving them on an exchange is termed leaving them in a hot wallet. Cold storage is just about the safest way to go in terms of self-custodying your assets. (Some view a paper wallet as being even more safe, but that seems too extreme for me.)
I have also heard great things about Casa as a way to store you digital assets, but I haven’t used it, and I don’t know anyone who has.
If you would like to learn more about how to store Bitcoin/cryptocurrency, check out this great piece by Dan Held.
Monitoring the Price of Cryptocurrency
Once you buy some cryptocurrency, you’ll likely become addicted to checking the price of it. That will eventually fade away, but you should still know where to most easily monitor the price. Below are the two best sites to do so:
There are apps for your phone for both of these sites, as well.
Podcasts on Cryptocurrency
The Pomp Podcast - Anthony Pompliano, or “Pomp”, is an entrepreneur and an investor. On this podcast, he interviews big personalities in the world of finance, tech, and cryptocurrency.
What Bitcoin Did with Peter McCormack - McCormack is a super pleb, a simple man. He’s a real salt-of-the-Earth kind of guy. He is also a “Bitcoin maxi” or a “Bitcoin maximalist”, someone who only invests in Bitcoin. Don’t expect to learn about other cryptocurrencies on this show.
The Breakdown with NLW - The is a short and punchy daily podcast that features thoughtful takes on happenings in finance and crypto.
We Study Billionaires: The Investors Podcast Network (with Preston Pysh) - There are two different hosts for this show. Pysh is one of them, and he handles all of the crypto interviews on the show. These interviews tend to be a bit longer, but are often incredibly insightful.
The Gentlemen of Crypto - Isaiah Jackson, author of Bitcoin and Black America, is one of the hosts of this show. He brings some much needed Black perspective to a space that is often dominated by white dudes.
Modern Finance - Just started listening to this. They often provides solid takes on “alt coins” (Translation: cryptocurrencies other than Bitcoin).
Books on Cryptocurrency
The Bitcoin Standard: The Decentralized Alternative to Central Banking, by Saifedean Ammous - Ammous holds a PhD in sustainable development from Columbia University and is a professor of economics at the Lebanese American University. He also has a master’s degree in development management from the London School of Economics. This is considered to be one of the definitive books on Bitcoin.
Bitcoin and Black America, by Isaiah Jackson - Jackson was trained as a computer programmer and now works as an independent author and investor. This book is about how African Americans have been excluded from banking and financial systems for generations and how Bitcoin fixes this. Check out what he has to say below.
The Basics of Bitcoins & Blockchains, by Antony Lewis / This book provides a basic overview of Bitcoin/blockchain technology (e.g., public and private keys, hash functions). It also provides a history of money. It also breaks the jargon that surrounds Bitcoin down into layperson’s terms. Good book for beginners.
Layered Money: From Gold and Dollars to Bitcoin and Central Bank Digital Currencies, by Nik Bhatia / Bhatia is a professor of finance and business at USC. This book provides an overview of the evolution of money.
The Price of Tomorrow: Why Deflation is Key to an Abundant Future, by Jeff Booth / Booth has been working in the field of technology for the past 20 years. He has founded companies and has been featured in publications ranging from Forbes to Time.
Bitcoin Billionaires: A True Story of Genius, Betrayal, and Redemption, by Ben Mezrich / This is the story of the Winklevoss twins, the first known people to become billionaires by owning Bitcoin. This book discusses the early days of Bitcoin, as well.
YouTube Channels on Cryptocurrency
You have to be careful when you dive into the world of YouTube for cryptocurrency information. There are tons of scam artists, frauds, and downright maniacs out there. So, please dive down rabbit holes with caution. Maybe start with these few channels below. And, yes, I know that all of these, aside from the Real Vision and Charles Hoskinson channels, feature a really scammy looking colorful clickbait graphic still image to lure you in. This is just part of the game in this world; it doesn’t necessarily invalidate what these YouTubers have to say.
Real Vision - Founded by Raoul Pal, whose opinion I have discussed extensively in previous editions of the newsletter, Real Vision is my favorite source for info on both traditional finance and crypto. If you like what you see on the YouTube channel, I recommend subscribing to Real Vision: Crypto FOR FREE or opting for a paid subscription to Real Vision to learn more about all classes of assets. As I said, this is my favorite resource for financial information. If you have yet to watch the video below, I highly recommend doing so.
Lark Davis - Lark is coming at your from way down under - New Zealand. His videos are usually about 10-minutes long and packed with legit info. He also has a paid newsletter that also offers a ton of good tips and information.
Coin Bureau - Guy, the host, is coming at you from London. His takes are usually quite sober, and he has a lot of good videos, like the one below, on how to keep your psychology in check while navigating the often turbulent cryptocurrency seas.
Crypto Banter - South Africa in full effect here. This show is hosted by a guy named Ran Neuner, and while at times he comes off like an overly energized lunatic, it’s important to keep in mind that he got is MBA from Harvard, is the CEO of an investment firm, and is a multimillionaire. The best parts of this show are when his guests Sheldon and Rudo join Ran to chart certain coins.
Scott Melker (The Wolf of All Streets) - Here’s another guy with an ivy league degree who has left behind a past career (as a DJ) for a career in crypto. Smart guy; dry sense of humor.
Charles Hoskinson - Coming at you from Colorado. He is the founder of Cardano (ADA is the cryptocurrency) and he is doing incredible work in Africa. Very intellectual, very sober. I really want to know what’s in the safe behind him.
Websites for Cryptocurrency News
More here.
Apps to Earn Free Bitcoin
I wrote a piece on these here.
General Rules of Thumb
“HODL” - Buy an asset and hold it. If you dive down cryptocurrency rabbit holes, you might see people reminding each other to “HODL”. It isn’t that these people are semi-illiterate. Years ago, one of the earlier holders of Bitcoin wrote an email in which they misspelled “Hold” (they wrote “HODL”) and it stuck. If you are new to the space, don’t actively trade. Buy some Bitcoin and some Ethereum and just hold it. Take some profits when the price goes up. Buy more when the price comes down. This is the way.
Buy the Dip - We are in a bull market and while prices of digital assets are currently rising, there will be big pull backs and corrections. Inexperienced investors will usually freak out and sell as these points, but experienced investors buy more of these assets during these “dips” in price. Keep in mind the old Warren Buffet maxim: “Be fearful when others are greedy, and be greedy when others are fearful.” We will likely hit a point of irrational exuberance where the prices for these assets skyrocket very quickly. This isn’t the time to buy more of them. This is the time to sell.
You can buy fractions of cryptocurrencies. You do not have to buy an entire Bitcoin or an entire Ethereum. A fraction of a Bitcoin is called a “Sat”, and I don’t know what the fraction of an Ethereum (or technically, an “Ether”) is.
I could go on, but I think this should be a good amount of resources with which to start. I may do a follow up edition of the newsletter in which I provide further resources. If you feel like I missed any very important resources, please feel free to add them in the comments - especially if you are from a country other than the United States.
Also, if you use Twitter (hands down my favorite tool for obtaining up-to-the-minute information on traditional and crypto markets) check out some of the people I follow. I will likely do another piece on good Twitter follows in a future edition of the newsletter.
I will also likely do a piece on all of the argument against Bitcoin and cryptocurrency soon, so that you can get a more full picture of the competing narratives out there.
Lastly, please keep in mind that the words in these newsletters are not gospel truth. They are merely jump off points to help you to do your own research if you choose to invest.
Thanks for reading, and happy (and safe) HODLing!
Best,
Frank
Twitter: @frankcorva
Love these articles Frank!