If you want to start your crypto investing journey, the simplest way to do it is by signing up for a major crypto trading platform. After signing up, you can add funds through wire transfer or Interac e-Transfer. Then, you can buy Bitcoin and start for as little as 50 CAD.
How does crypto investing work?
First, a simple way to start with crypto investing is through a platform. A crypto trading platform is like a huge online marketplace. This is where buyers and sellers trade cryptocurrencies either for a profit or for a loss.
To start, buyers and sellers first have to sign up for a platform. Then they can add their funds so they can buy some Bitcoin. Before they can do that though, they often have to figure out the following:
- How to secure account and funds
- How to fund a crypto trading account via Interac e-Transfer
- How to buy Bitcoin (BTC) with a credit card fast
- How to lower risk and minimize losses
Once they learn that, they’re now more ready to start their crypto investing journey.
To better illustrate how crypto investing works, here’s an example:
- You bought some Bitcoin for 100 CAD
- After a few days, Bitcoin’s dropped to 90 CAD
- You decided to sell to cut your losses (you sold the Bitcoin for 90 CAD)
- You lost 10 CAD
Another scenario is when you made a profit:
- You bought some Bitcoin for 100 CAD
- Bitcoin’s price rose to 110 CAD
- You decided to sell because Bitcoin’s price might go down again
- You sold the Bitcoin for 110 CAD and you gained 10 CAD in profit
Those are simple and quick scenarios. Often though, many investors practice HODL (they hold the Bitcoin they bought for as long as they can). Investors often do this because:
- Bitcoin’s price might increase further (more profits)
- Bitcoin’s price might still recover (instead of settling for losses)
Here are examples where you bought 100 CAD worth of Bitcoin:
- Bitcoin’s price dropped to 90 CAD
- You HODL (hold the Bitcoin) and wait for the price to go back to 100 CAD and beyond
- You sell the Bitcoin once it reaches 100+ CAD and you avoid the losses
- Bitcoin’s price increased to 110 CAD
- You HODL and you hope that the price will go to 120 CAD
- Bitcoin’s price indeed reaches 120 CAD
- You sell the Bitcoin for more profit (20 CAD instead of just 10 CAD)
However, emotions are always at play here. For example, what do you do when Bitcoin’s price suddenly drops by 50% (your investment is now worth just half)? Will, you still HODL and wait for Bitcoin to recover? Or just sell what you have now, cut your losses, and just move on? Fear of loss is at play here.
Also, what will you actually do when Bitcoin’s price suddenly doubles? Will you immediately sell and take your profit, or wait and hope for the price to rise further? Greed plays a huge role here. After all, in investing we want to maximize our profits.
It always happens whether we’re investing in Bitcoin or any other cryptocurrency. Two conflicting emotions are always present (greed and fear of loss). Even experienced investors find it hard to take away their emotions and remain objective whenever their investment’s value changes.
Other cryptocurrencies aside from Bitcoin
Crypto investing always has the same general principles whether you’re buying Bitcoin or other cryptocurrencies such as:
- Ethereum (ETH)
- Aave (AAVE)
- Cardano (ADA)
- Algorand (ALGO)
- Avalanche (AVAX)
- Cosmos (ATOM)
- Dogecoin (DOGE)
- Polkadot (DOT)
- Loopring (LRC)
- THORChain (RUNE)
In fact, you can find thousands of cryptocurrencies today. However, only a few dozens are popular and widely available on crypto trading platforms. It’s good to focus on those popular cryptocurrencies that have a bit long history behind them.
Those cryptocurrencies are powered by blockchain (you’ll often hear about this in your crypto investing journey). It’s a way of storing information and recording transactions. What’s different here is that it’s decentralized and peer to peer. What this means is that there’s no central clearing authority (no middleman) that can interfere with the transaction. It’s all powered by math and cryptography (it’s a trustless mechanism). This is one of the strongest selling points of crypto (being out of the traditional financial system).
However, most of us actually view crypto as a way to make money. Often, we still don’t use Bitcoin to pay for goods and services. We’re only interested in using it as an investment and hopefully making a profit from it (preferably as fast as we can).
Can you make fast money on crypto?
You’ve probably heard about instant millionaires because of crypto. Can you do the same and make fast money on crypto?
There’s no guarantee. It takes an enormous amount of luck for investments to go 10x to 100x. Remember the scenarios earlier about greed and fear of loss? When Bitcoin’s price suddenly goes up, will you sell immediately or wait for the price to go up further? What if the price drops? It’s a tough choice because you don’t know what will happen tomorrow.
Also, beware of confirmation bias. We might only be seeing lucky millionaires and ignore news about the ones that suffered great losses. “We only see what we want to see.” In other words, we favor information that already confirms our pre-existing beliefs.
Making fast money on crypto is hard or nearly impossible. It’s also a goal far from reasonable because investing always carries some risks. Instead, a reasonable goal should be to diversify your investments and minimize your losses.
It also helps to make your crypto investing as easy as possible. This way, you’ll have more time and energy for other pursuits. This also helps in making your start as quick as possible.
You can do that through Coinberry (a major cryptocurrency trading platform with over 220,000 Canadians already signed up). They have made crypto investing as easy as possible through their user-friendly platform.
One of the key things to consider is to make sure you put money into a legitimate exchange and keep it there. Even that doesn’t provide enough assurance because god knows where they are based and which regulations apply to them. Don’t go adventurous and start looking for dodgy quick money making schemes. There are so many stories of people losing all their money as well that don’t just believe in stories people making millions.