How to Invest in Cryptocurrencies

Due to popular demand, I’m taking a break from following the charts and researching the universe of crypto-assets (for about an hour) to post on how to invest in cryptocurrencies. By “how” I mean:

  1. The websites where you could open an account to buy and sell.
  2. Where to research assets you find interesting.
  3. The importance of including technical analysis in your research.

Just a reminder, this is a whole new investment class that is still evolving. Therefore, keep an open mind, it’s going to be slightly different than how your online brokerage works.

Where to Open an Account

There are a number of different exchanges where you could buy and sell crypto assets. Not all the exchanges carry the same assets for trade. Some exchanges cater to different customers. For example, Coinbase.com , only carries three of the most accepted and prominent crypto assets (Bitcoin, Litecoin, and Ethereum). They have a great reputation. My personal read on why they only carry Bitcoin, Litecoin, and Ethereum is that they are targeting a more entry level and “blue chip” investor. They haven’t displayed much of an interest in carrying the much more risky “altcoins”.

For those of you with interest in more altcoin selection, Kraken.com and Bittrex.com are both U.S. based and in tune with the current regulatory environment.

Remember, the crypto assets you hold in these accounts are not stock certificates (showing ownership), they are assets that exist digitally…therefore keeping them secure is key. Read the sections of the exchange websites talking about insurance and security. Both you and the exchange have responsibilities to keep the assets secure.

Where to Research

There are several ways to do this. Here is a starting strategy:

-go to Coinmarketcap.com to see the top crypto assets by size (market capitalization)

-identify the ones you find interesting

-go to the asset’s website and read the description of what they are actually trying to do (i.e. the whitepaper)

-Google search “Reddit *enter asset name*”, Reddit forums are a great resource if you can follow the conversation.

CoinSavage also provides it’s own library of reports on crypto assets that we find interesting.

Why Technical Analysis Is Important

I wrote on this subject a few weeks ago in a post entitled Crypto Chart Analysis 101.

Bottom Line = Behavior is the driver of asset prices. Charts are a “map” of behavior. In a new asset class where fundamental analysis (i.e. balance sheets and cashflows) is a challenge, charts become extremely important to understanding price movement.

Invest Savagely.