Thinking about getting into Bitcoin? 6 tips to take into 2021
Don’t let anyone tell you it is too late to get into Crypto. Even with the massive gains to Bitcoin, Ethereum, and virtually every other Alt Coin, the room for growth is still substantial and potentially life-changing. But no matter, how determined you are to start accumulating Crypto, it can be incredibly intimidating to get started.
Here are 6 simple tips and explanations to help you get started on the right foot!
1. Pick a strong educational resource to better understand the blockchain basics.
Whether that is through books, audiobooks, or educational podcasts, there is a HUGE spectrum of resources available for anyone just now getting started into crypto.
Great Books to get started:
- Cryptoassets — Chris Burniske and Jack Tatar
- The Truth Machine — Paul Vigna
- Blockchain for Everyone — John Hargrave
Great Podcasts to listen to:
- The Unchained Podcast — Laura Shen breaks down Crypto news and updates and interviews top names in the Crypto industry. You can find this both on Spotify and Youtube
- The Pomp Podcast — Anthony Pompliano’s podcast is fantastic and is accompanied by an industry favorite newsletter.
2. Choose your first Crypto Exchange and begin the registration and KYC process
Even if you aren’t planning on purchasing Bitcoin (BTC) or Ethereum (ETH) today, one of the first steps you should take is to research exchanges to register with.
KYC AML (Know your customer — Anti-money laundering) processes can take a few days and if you happen to make a mistake, it can take a few weeks. Most newer entrants into the Crypto market are primarily focused on purchasing BTC and sometimes ETH. The tips I am going to place below will be focused on exchanges that offer the following:
1. Both BTC and ETH
2. Are very easy to sign up and register for
3. Allow for easy direct deposits from most US Banks with ACH and debit card
The key information listed will be for transaction fees as well as transfer fees. As these are often two overlooked concepts for new investors. An important thing to keep in mind is that the average Crypto trader who has been in the space for a decent amount of time is using over 3 different exchanges at any given time. This may be due to coin availability, coin volume, or general liquidity. So it will be very common for you to start with one and gradually start testing out your experience with other exchanges.
What is a transaction fee? This is the maker/taker fee you pay when you use an exchange to purchase crypto with fiat.
What is a transfer fee? This is the network fee the exchange passes on to you in order to withdraw your crypto from the exchange to your personal wallet.
Top Exchanges (for US users) and what you need to know: Keep in mind this information will be relevant for average retail traders who plan on less than $500,000 within a 30-day trading period
Gemini — fees start at .35% for ActiveTrader users.
An important thing to note for Gemini is that as of today (1.15.2021), they are still allowing traders to withdraw their first 10 units of any crypto for free. This can turn into a MASSIVE amount of savings if you are dollar-cost averaging and moving into an interest bearing wallet. So if you are planning on consistently moving your freshly purchased crypto off-exchange, Gemini is a great place to start. Especially if you only plan on purchasing and HODLing BTC and ETH at smaller quantities. The total value of your first 10 BTC would be around $376,397 and your first 10 ETH would be around $12,211.66. Meaning, if you are purchasing your BTC on Gemini, all of your BTC transfers would be free until you exceed $376,397 worth of total BTC transferred.
So if a BTC transfer still costs .0005 BTC (as it does today on Binance.us), 10 BTC withdrawals would save you almost $100 (at the current conversion of .0005 BTC = $18.81). If you don’t plan on hitting these numbers right out the gate, Gemini is one of the best places to start. You can check out the transfer fee schedule here.
https://gemini.com/share/ey797pte
Binance.US — fees start at .1% for verified users and can get as low as .075% if you use their Binance coin (BNB) to pay for your trade fees.
If you are purchasing a few thousand dollars worth of BTC, this can save you a pretty penny in the long term. With 41 different coins set up with USD trading pairs, Binance.US has the most extensive list of Cryptos available with the lowest transaction fees. So if you have an interest in expanding beyond BTC and ETH, Binance.us might be a place for you to check out.
How does that .075% fee stack up compared to Gemini’s .35%? Well in the example of you wanting to make a $10000 BTC purchase, with a .35% fee, you would pay $35 in fees whereas on Binance.us you would pay .1% ($10) if you used BTC or only .75% ($7.5) if you used BNB for that transaction fee. Granted, this can be made irrelevant with the current $20 transfer fee, but it is important to know the difference.
You also have to remember that Binance.us has standard transfer fees for all of their Cryptos, so be prepared for that. If you are planning on buying BTC every week or so and transferring to an interest-bearing account, you will most likely want to wait and build up enough BTC to make their .0005 BTC transfer fee worth it. As of today, that transfer fee would cost you around $19.19. Not exactly worth it for $100 worth of BTC because that would translate to almost 20% of your total purchase.
Another key benefit to using Binance.US is that you are able to stake some select Cryptos directly on the exchange website. Currently, this list only includes QTUM, EOS, ONE, VeChain, XTZ, ATOM, and ALGO but if any of these assets are on your radar, might be worth looking into purchasing them on Binance directly to easily stake as well. For an intro into staking, check out this link from Binance Academy here.
Coinbase Pro — fees start at .5% for PRO users.
While Coinbase Pro has by far the highest fees within the industry, they are also well known to be one of the easiest exchanges for newcomers to get used to. They also have hands down the largest liquidity of all the exchanges listed here, which means if you are trying to make large value or frequent trades, the Coinbase Pro order books will have many more orders to work with. Keeping in mind, this does not matter if Coinbase goes down every time BTC hits all-time highs.
One important distinction to make is between Coinbase’s standard website vs their Coinbase Pro exchange. Coinbase Pro (the artist formerly known as GDAX) is where any serious trader should be making their purchases through Coinbase’s exchange. The fees are lower on the Pro site and transferring between your standard Coinbase account and your Coinbase Pro account is seamless, quick, and free. It also does not cost anything additional to get a Pro account and to learn more about the additional KYC needed to open, check out this link here.
Also, for those that are interested in earning interest on their USDC, Coinbase Pro has one of the easiest and cheapest ways of minting USDC from USD and also is fairly inexpensive to transfer out large amounts. You can also stake select Cryptos directly on the standard Coinbase site but that list is currently limited to USDC, ATOM, XTZ, and DAI.
One especially cool feature of the standard Coinbase account is the ability to earn a few dollars worth of select Cryptos by simply learning about them. My initial free $5 worth of Stellar Lumens has more than doubled in value since I first earned them many months ago. I would also check this section of their site frequently because they are always adding new coins that you can earn while you learn about. Just recently they added GRT (The Graph), which you can earn a free $3 on if you pass a quick quiz on.
For a link to earn while you learn about Lumens click here
For a link to earn while you learn about Compound click here
3. Figure out what kind of wallet you want to store your Crypto in!
What is a Crypto wallet? A great definition is from Cointelegraph,
“A crypto wallet is a piece of software that enables you to send and receive cryptocurrencies, such as Bitcoin. They can be used to store multiple tokens and coins at once — however, most wallets will only support a limited number of cryptocurrencies”
Simple enough right? Well, it does get a bit more complicated than that. There are hot wallets and cold wallets.
A hot wallet is one that is connected to the internet. While these are almost always easier to set up, access, and offer a ton of tokens, they are more susceptible to hackers, regulations and rely on whatever 3rd party you are using for that wallet service. So whether you are using Metamask, Trustwallet, Coinbase wallet or even the Cash app, these are all examples of hot wallets.
Comparatively, a cold wallet (often called a hardware wallet) is a wallet that is NOT connected to the internet. While these are typically more secure, they almost always come at a higher price, and as we saw from the Ledger hack are not 100% risk-free. Examples of top cold wallet companies include Trezor and Ledger.
If you’ve been in the Crypto space for any decent amount of time, I’m sure you have heard, “Not your keys, not your Crypto”. While I definitely see the merit within this statement (and agree with it to an extent), I don’t think it necessarily applies to all Crypto holders. Especially newer entrants into the Crypto space. This can be evidently seen by the insane uptick of Paypal users who are buying their BTC in a fashion in which it can ONLY be used within the PayPal ecosystem. Once you have accumulated a large portfolio of BTC or ETH, it is definitely advisable to have the bulk of that within a cold wallet in a secure place. But as you start your Crypto journey, a free interest-bearing hot wallet is more than sufficient.
One important tip is if you are choosing to go with an interest-bearing hot wallet, make sure to do your research into that company to ensure that you have faith in their ability to protect your Crypto, your personal information and they can stay profitable. This is why you will see my top recommendation for an interest-bearing hot wallet will be Celsius Network.
My top recommendation for a cold wallet has to be Trezor. I have used Trezor for a long time and have never had any issues using their system. It is incredibly intuitive and has a lower cost entry point than many of their less secure competitors.
My top recommendation for new investors has to be Celsius Network. Not only are you able to purchase BTC, ETH, and USDC directly in-app (with a .1% fee) they are the industry leaders when it comes to earning interest on your Crypto. I have used Celsius since the beginning of 2020 and can confidently say they have earned my trust. Unlike all of their competitors, their transparent approach helps you make sure you know how the community is growing/performing and what kind of returns the community can be expecting.
Something important to note is that most of these interest-bearing accounts require KYC/AML processes as well, so it is worth getting these started as soon as you are committed.
To learn more about Celsius Network check out their website here.
To learn more about the Celsius Network community, check out the Celsians site here.
Click the link below to earn $20 in BTC when you sign up and have your first transfer of $200 or more!
4. Figure out the easiest way for you to stay up-to-date on news and keep your finger on the pulse of whatever Crypto’s you are investing in.
My current favorite for staying up-to-date on Crypto news is the mobile app “Crypto News”. This is a free app both on the Apple and Android play store that aggregates Crypto news for you from all over the industry. My favorite feature of this is to filter based on what specific Crypto you are staying on top of. So if you are only focused on Bitcoin, you can go ahead and only search through recent and top news pertaining to BTC. The same goes for Ethereum and Altcoins.
A link to the app on the google play store is here
There is also a multitude of educational and informative Crypto youtube channels that can help keep you up-to-date and in the know of all the new releases that happen in the Crypto landscape. One key thing to be aware of is that as the Crypto market continues to boom, so does the increase in scammers who are posing as these folks online. Always make sure to stay diligent in your engagements with people online and NEVER give your private information away.
A few of my personal favorite channels include:
- The Coin Bureau — Guy at the Coinbureau is one of the most informative no-hype educational YouTubers I’ve ever encountered. He makes it a point to discuss good analysis strategies as well as coin fundamentals that often get overlooked by other Youtubers. A great example of this is his consistency in discussion over Tokenomics. Someone definitely worth checking out and subscribing to!
- The Modern Investor (TMI) — I always recommend TMI to my friends who often get a bit too pie in the sky with the latest and greatest Crypto project. He is a no-nonsense news analyst who definitely leans towards Bitcoin maximalism but I much more fondly characterize his Altcoin critiques and comments as healthy and necessary skepticism.
- BitBoy Crypto — If technical analysis (or TA) is something that piques your interest, BitBoy is definitely a YouTube stop you want to check out. Mr. Bit is definitely one of the most energetic and passionate Crypto traders out there and is fast becoming his own brand within the space. If you are curious about what technical analysis is, check this link out here!
- VoskCoin — As a newer BTC miner myself, I have found VoskCoin’s channel invaluable. And also, his co-host, Tales (best Shibu in the mining community) consistently provides top-notch commentary and twitch-clip-worthy moments. If you are falling deep into the rabbit hole and are even started to consider mining BTC on your computer (using Honeyminer or NiceHash), definitely check out his channel to learn even more and see all the different levels of Crypto mining that are available and most importantly, profitable today. To get 1,000 satoshis free when you start mining on Honeyminer, click this link here.
5. Figure out how you are going to track your purchases over your tenure as a Crypto investor!
No matter what Crypto you start investing in, it is important to always remember what your cost basis is for that specific Crypto. If you only ever made one singular BTC purchase and that is the only purchase you ever plan on making, feel free to skip this section. BUT, if you plan on continuing to accumulate, dollar coast average and HODL, a method to keep track of your average purchase price will help you understand your gains/losses and how to approach tax season. For those that are super savvy with Excel, you can definitely create your own spreadsheets but for those (like myself) that cannot, Blockfolio or Coinstats are excellent options for tracking the prices of your purchases for all the different Cryptos moving in and out of your portfolio.
To better understand what dollar-cost averaging (DCA) is check out this link here!
To better understand how to calculate the average purchase price, check out this link here!
6. Talking to your like-minded friends or others within the Crypto landscape!
As one of the first of my friends to enter the Crypto space, I ended up introducing them to some of these ideas and strategies. Fortunately for me, most of my friends enthusiastically started researching, learning, and eventually investing. This gave me a core group of friends to engage with and discuss strategies with.
But it definitely took them a reasonably long time to do their initial research and ramp-up. During that time, I met a ton of great people on Telegram and was able to chat with different crypto fanatics within different communities often built by the Crypto community themselves! Telegram is also the best place for me to get updates on Crypto projects and even direct support from those project’s admins! Swipe (SXP) is a great example of a Crypto project that has very hands-on Telegram admins who help you troubleshoot issues in a safe and friendly manner (Shoutout to Gabi!).
Guy @ Coin Bureau has an Insider’s channel that he sends updates too and Cointelegraph has a great Telegram channel that sends out all of their new articles and updates in the fastest digestible way!
To check out Telegram, visit their website at www.telegram.org
Let me know if I am missing any key tips or if you have any other recommendations I can share with our readers!
