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In a recent interview, entrepreneur Bill Pulte discussed Bitcoin allocation and its price outlook with host Natalie Brunell. The millionaire explained that it is necessary for families to invest in Bitcoin as,

“Bitcoin buys happiness because it takes people out of third world poverty…Happiness is economic freedom.”

Further explaining how much a family should allocate in its investment basket, he added, 

“As much as they humanly can, within reason.”

He emphasized that people are worried about a “corrupt government that’s devaluing its currency” by printing more money. Therefore, he thought allocation to Bitcoin will instead bring economic power to the people. Apart from a humanitarian standpoint, Pulte thought that the U.S. is battling a sticky inflation crisis.

He emphasized that the inflation level reduces the worth of a dollar and can be tackled by Bitcoin, stating,

“I don’t understand why the Federal Government hasn’t bought Bitcoin.”

Additionally, he declared that he doesn’t buy the “fear porn” that the government will shut Bitcoin down. Instead, he maintained a bullish viewpoint on Bitcoin, predicting,

“I think we could see a million dollars a coin”

In this context, he advised Bitcoin investors to hold on to the asset long term. He isn’t the only industry voice who thinks Bitcoin is going to be very valuable in the future. MicroStrategy’s Michael Saylor had previously emphasized that Bitcoin is the way to store value. He said, 

“Bitcoin is like Manhattan, if you owned it in the 1800s would you ever sell it or short it?… Holding BTC is a business strategy if you want to be rich you need to own a high-quality asset like BTC.”

In the context of family offices, a recent survey by Goldman Sachs also found that about 15% of family offices in the world, including 25% in the Americas, had invested in cryptocurrencies. These families earmarked around 1-3% of their portfolio for digital investment.

Meanwhile, more than half of non-crypto investors might initiate an exposure in the future, the report cited. As per an executive, the change was a result of the holdings being considered a hedge against inflation or a store of value. 

However, while allocating an asset class, the widening wealth inequality can’t be ignored. According to analyst Lark Davis, 

“If you can actually afford to go out and buy 1 Bitcoin today, congratulations. You are rich! Because 1 Bitcoin is worth more than the average annual income of the majority of the world’s citizens.”

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Bitcoin, which made its debut in 2009, is a cryptocurrency — a digital form of money that exists without a central government or bank. Over the last few years, Bitcoin has gone from an obscure method of payment to a mainstream investment option. 

With its rise in popularity and the lure of massive gains, investors who may not have the largest budgets are looking for a way to get in. For some, using a credit card to purchase Bitcoin seems like a savvy way to own the cryptocurrency and use the future gains to pay off the debt and fees. But can you actually buy bitcoin with a credit card? If so, what are the risks? 

you buy bitcoin with a credit card? 

Yes, it's possible to buy bitcoin with a credit card. But it depends on what exchange you're using. Some crypto exchanges do allow you to buy bitcoin with a credit card — but they do come with fees.

Your ability to purchase crypto with a credit card will also depend on the credit card issuer.

"[American Express] specifically prohibits purchasing currency with their card but, for now, allows purchases of cryptocurrency," says Courtney Richardson, Esq., founder of The Ivy Investor. If your chosen exchange and credit card issuer allow you to make the purchase, the process for setting up these transactions is very similar to the process to link and verify your bank account via ACH (automated clearing house). 

Is it a good idea to buy bitcoin with a credit card? 

Using a credit card to buy Bitcoin or any other cryptocurrency is not recommended. "I prefer individuals to purchase bitcoin with cash," says Dr. Hans Boateng, founder of the Investing Tutor. Using a credit card to buy Bitcoin is a highly speculative and expensive proposition in which the drawbacks tend to outnumber benefits. 

Additionally, Bitcoin purchases are usually assessed differently than regular purchases by credit card issuers. "In many cases, purchasing cryptocurrency is considered risky behavior and the credit issuer may close the card or have the credit limit lowered," adds Richardson. 

Here are the main drawbacks of buying bitcoin with a credit card:

Broker fees

Cryptocurrency exchanges make money through transactional fees but for the use of a credit card you may be charged even more. So you may be facing broker fees should you to choose to buy bitcoin with a credit card.

For example, Crypto.com allows credit card purchases and charges 2.99% for credit and debit card fees, but this is waived for the first 30 days. 

Credit card fees

Generally, credit cards treat cryptocurrency purchases like a cash advance which, depending on the card you have, could be between 25% to 27% APR and would begin accrual immediately. 

This is in addition to the fee for using the cash advance from the credit card issuer. In some cases it can be $10 or 3% of the cash advance, whichever is greater. 

Foreign transaction fees  

If an exchange is based outside of the US, your credit card may also add a foreign transaction fee for each purchase. This fee could range between 1%-3% per purchase. 

Credit utilization ratio increase

There are various factors that make up your credit score. One of these factors is credit utilization ratio, which makes up 30% of your credit score. Buying Bitcoin can use up your available credit, potentially lowering your credit score. Even if the value of Bitcoin falls, your credit utilization stays the same.  

Other considerations 

Fees are not the only risk of buying Bitcoin with a credit card — volatility is a big factor, which Bitcoin is known for. "The most significant risk is understanding that Bitcoin is a new technology with a high level of speculation," Dr. Hans says. 

Bitcoin has had large price swings over time, which can negate the perceived advantages of using a credit card to buy crypto — and it may also put the buyer "underwater" if they end up paying more in credit card debt than the asset is worth. This becomes especially dangerous when factoring in interest on the credit card if the balance cannot be paid in full and the price of Bitcoin is falling. 

While using a credit card to buy bitcoin may not be the best idea, there are a few credit cards that can help you earn rewards in Bitcoin for typical day-to-day purchases. Keep in mind that even with a bitcoin rewards card, its benefits may erode if you're paying late fees and interest charges on the balance. 

Here are a few credit cards that offer bitcoin-related rewards: 

The financial takeaway

While it is possible to buy Bitcoin with a credit card, it isn't the most sound financial decision given the risk of the asset and the fees. These fees not only reduce your potential gains, but they can also impact your credit score if your purchase is large. "Use cash to purchase, dollar cost average, and look into other ways to get rewarded for crypto," says Richardson.

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Cryptocurrencies are digital assets that trade on a 24/7 global market. If you're thinking about adding cryptocurrencies like bitcoin, ether, or dogecoin to your investment portfolio, you have several options for doing so. 

"Cryptocurrency is a unit of measure. It is a digital token that can be transferred from one party to another, but not duplicated," explains Charles Allen, chief executive officer of BTCS, Inc. 

Unlike physical fiat currencies (e.g., the US Dollar), cryptocurrencies are decentralized, virtual currencies that are typically used to purchase goods or services. These assets utilize blockchain technology to ensure that transactions between each party are secure.

"If I own a bitcoin, I don't really own anything physical. I just own a key that allows me to move a record or a unit of measure from one person to another, without a trusted third party. And that's really all the cryptocurrency is. So if I own two bitcoins, I can move it from myself to someone else without a trusted third party in the middle. And that transaction would be verified by this decentralized network of computers from nodes and minors."

Here's how to buy cryptocurrency — along with an outline of where you can buy it and the different types of investment vehicles you can use for exposure to it.

1. Choose a broker or cryptocurrency exchange 

If you're interested in buying and selling cryptocurrency, the first step is choosing a platform to do so. Generally, you can choose from a traditional broker or dedicated cryptocurrency exchange.

As you're comparing different platforms, it's wise to consider things like supported cryptocurrencies, security features, fees, storage and withdrawal options, and educational resources.

Cryptocurrency exchanges

A crypto exchange is a platform dedicated to facilitating the trading of cryptocurrency. Each exchange has their own rules when it comes to the buying, selling, and trading of cryptocurrency. 

The best exchange for you depends on your needs, but beginners should look for exchanges that offer simple web and mobile interfaces, educational resources, and readily available customer support.

Depending on the crypto exchange, you can trade one cryptocurrency for another, or exchange fiat money (like the US Dollar) for cryptocurrency, or vice versa. Prices are based on daily market rates. 

It should be noted that not every exchange offers every cryptocurrency. But here are several exchanges and brokerages that do:

Brokerages

Traditional online brokerages that offer cryptocurrencies are few, but more options are becoming available for crypto-oriented traders. 

Online brokerages usually don't offer as many cryptocurrencies as crypto exchanges (nor do they provide interest-earning account perks like staking). If you're looking for a wider range of assets and account options, crypto exchanges might be a more beneficial option to consider.

So why should you choose a broker?

You should choose a broker if you're looking to trade a variety of asset types under the same roof. TradeStation offers cryptocurrencies in addition to its selection of stocks, ETFs, options, bonds, and mutual funds.

Robinhood — another online brokerage — has a smaller investment selection, but you can trade cryptocurrencies commission-free. TradeStation, however, charges up to 0.30% for trades.

As mentioned above, more online brokerages are offering cryptocurrencies. Online brokerages are investment platforms that let you buy assets like stocks, bonds, ETFs, options, and mutual funds. Brokerages also offer accounts like IRAs, 529 college savings plans, and trusts.

2. Fund your account

After you've chosen a crypto exchange or online broker, you'll need to fund your account to begin trading. "Although it differs by platform, most crypto exchanges allow users to purchase crypto using fiat currencies such as the US Dollar or the Euro using their debit or credit cards," says Marie Tatibouet, chief marketing officer at Gate.io.

Tatibouet adds that you can usually either use Visa or Mastercard bank cards to make purchases. 

However, crypto purchases with credit cards are especially risky and some exchanges, such as Coinbase, don't support them. Some credit card companies don't allow crypto transactions either. Cryptocurrencies are highly volatile assets, and it may not be the best idea to risk going into debt — or potentially paying high credit card transaction fees — for certain assets.

Another option platforms typically accept is ACH transfers and wire transfers, but the accepted payment methods and time it takes for deposits or withdrawals differs per platform (and not all exchanges accept credit cards).

Plus, the time it takes for deposits to settle varies for different payment methods. For instance, ACH transfers at Coinbase take three-to-five business days. However, debit card transfers are instant, but wire transfers can take one-to-three days.

Another thing to look out for is fees. You may run into deposit/withdrawal transaction fees in addition to trading fees. And the fees you pay for funding or withdrawing from your account typically depend on your payment method.

For instance, Coinbase charges a 3.99% fee for debit card transactions, and it charges $10 for wire transfers. ACH transfers, however, are free. 

These fees vary per exchange, so you'll want to pay close attention to each platform's prices before you get started.

3. Place an order

You can usually place an order with the click of a button on your broker's or exchange's web or mobile platform. If you're planning to buy cryptocurrencies, you can do so by selecting "buy," choosing the order type, entering the amount of cryptocurrencies you'd like to purchase, and confirming the order. The same process applies to "sell" orders.

But when it comes to transactions, the type of order you select affects the price at which your order is executed. There are generally three types of orders: market orders, limit orders, and stop orders.

In general, you'll basically have all the order options available if you were buying any other asset. 

"The three most popular order types used by global exchanges are spot, margin, and futures trading," says Tatibouet. Spot trading is when users place "buy" or "sell" orders on the open market to be filled as soon as the price hits their specific target.

"Margin trading is where users are able to trade in larger quantities than they can afford to by 'borrowing' funds from others, with many exchanges allowing a multiple of up to 20 times the trader's capital," says Tatibouet. "Finally, futures trading is when two parties agree on a specified price at a specified future date on any supported cryptocurrency."

4. Select a storage method for your assets

After you've purchased your cryptocurrency, you'll need to store it in a safe place to protect it from hacks or theft.

This is where cryptocurrency wallets come in. A crypto wallet is a physical device or online software used to securely store the private keys to your cryptocurrencies. Some exchanges offer built-in wallet services, making it easy for you to store directly though the platform. But all exchanges or brokers don't automatically provide wallet services for you.

There are quite a few wallet providers to choose from, where you'll have the choice between two custody options: 

Other ways to invest in crypto

You'll also have multiple other options to choose from when it comes to buying crypto. In the past year, payment services like PayPal, Cash App, and Venmo all expanded their accepted payment options, allowing you to buy, sell, or hold cryptocurrencies like bitcoin.

In addition, you can throw your hat in the crypto ring by utilizing the following vehicles:

You can buy shares of bitcoin trusts with a regular brokerage account. These vehicles essentially give retail investors crypto access through the stock market. 

Overall, you'll have so many options for exposing your portfolio to crypto assets. The best option for you, however, depends on your goals and risk tolerance.

Is crypto a good investment?

Cryptocurrencies have many advantages. For one, you can buy them 24/7, so you won't be limited to trading during set hours like regular stock exchanges that open from 9:30 a.m. to 4 p.m. ET. Prices also regularly fluctuate by large percentages, opening the door for big returns if that price swing falls in your favor.

But this volatility is also what makes cryptocurrencies a speculative investment. In fact, even more passive crypto tactics like staking aren't completely immune to loss, nor are virtual assets absolutely invulnerable to cybersecurity threats. 

Finally, many exchanges have geographic restrictions, meaning they don't serve residents in certain states because of regulatory reasons. Before you get started, you'll want to make sure your exchange is available in your region. 

The financial takeaway

You'll have a number of options — such as crypto exchanges, online brokerages, and even payment services — when it comes to buying and selling cryptocurrencies. And in most cases, you can fund your account with credit or debit card deposits, ACH transfers, or wire transfers (though many exchanges also accept crypto deposits). 

But it's important to choose the right place to buy your crypto. From online brokerages — like Robinhood, TradeStation, and Webull — to crypto exchanges like Coinbase or Gemini, the list of avenues for purchasing crypto is vast. 

After you've set up and funded your crypto account, be sure to familiarize yourself with the different types of trading orders as these can influence the final price you'll pay for different assets. And although storage for crypto assets isn't mandatory, it can be useful in securing your holdings against cyber attacks or other threats.

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Advertiser Disclosure I Tried (and Failed) to Use an Ethereum DApp. Here’s What Investors Should Know About Them Anyway Ryan Haar Axie/ Illustration/NextAdvisor

I’m a personal finance reporter, but I just spent a whole day trying to play a game where you battle creatures in a digital pet universe. 

For journalism, obviously. I was trying to grasp a better understanding of one of Ethereum’s main use-cases: DApps, or decentralized applications.

Many of the experts I’ve talked to describe the “transformational” nature of Ethereum, the second largest crypto by market capitalization. I’ve heard everything from “It’s the future” to “It’ll change the world as we know it.” When I ask experts why they feel this way, it often comes back to DApps.

DApps can serve different purposes: anything from P2P (peer-to-peer) lending services to fantasy games to social networks. But what are they actually like? How do I use one, and why would I want to? I’ve talked to cryptocurrency experts for months and still felt like the concept was out of reach. 

So I decided to go to the source and figure it out for myself. Experts say Ethereum is one of the only cryptocurrencies new investors should bother with. Since DApps are a big part of that value proposition, I wanted to find out what investors should really know about them. 

Turns out, investors probably don’t need to know that much to benefit from them. Experts say more people buying Ethereum to use DApps can help drive up the value as an investment. Here’s how it works:What Are Decentralized Applications (DApps)?

DApps are programs that perform different activities via smart contracts, independent of any central network or platform. P2P loans are one such example, and allow individuals to get loans without going through a bank. 

Lending DApps are an example of decentralized finance (DeFi), an area of development that many experts are excited about. But there are DApps for a lot of things, like decentralized cryptocurrency exchanges, social media networks, digital artwork, and more. 

Think about DApps like the apps you have on your cellphone. For Apple users, you might think of the Ethereum blockchain like iOS, and DApps like apps you buy in the app store. The same way you must have an iOS product to use Apple apps, you have to access the Ethereum blockchain to use Ethereum-powered DApps. 

[READ MORE]: What Is Ethereum?

Even understanding that analogy, it still felt too nebulous to me. I have a cellphone and can go to the app store for normal apps. But how do I access this future-changing, cutting-edge technology to use DApps?

Turns out, you go to the internet and type in: ethereum.org. Oh. 

Ethereum.org offers instructions:

Get a crypto walletBuy Ethereum (ETH)Find a DApp (through Ethereum.org or other sites like dappradar.com) and go to its website. Depending on which DApp you choose, you’ll likely need to create an account, like when you access a new iOS app.Connect your wallet and gain access by using your ether within the decentralized application. Ethereum-based DApps require both a wallet, which acts as your “login,” and a transaction fee payment in ether, which essentially means you pay to play over the Ethereum network.  

I personally own a very small amount of crypto and hold it in my account with the cryptocurrency exchange where I bought it. But to access DApps, I needed to put my crypto into a wallet, with an address, so that I could connect it to a decentralized application. I knew using a DApp would most likely require me to spend cryptocurrency, which I didn’t necessarily want to do, as experts say it doesn’t really make sense for investors to use crypto to pay for things. But in the name of research, I proceeded.

So I downloaded an online wallet, connected it to the exchange, and purchased some Ethereum (ETH), incurring a fee to transfer out of the exchange and into my wallet. It was time to see what these DApps were all about.Choosing and Using a DApp 

There are thousands of DApps out there, but on an expert recommendation, I decided to start with a gaming DApp.

“Technology often first touches people with games. Think about something like virtual reality. It’ll probably be used for a lot of different things, but it started in games,” says Sid Coelho-Prabhu, group product manager of DeFi & Wallet at Coinbase, a cryptocurrency exchange. “Even with something like blockchain, gaming has the potential to reach hundreds of millions of consumers as one of the first applications.”  

A quick search on DappRadar.com revealed “Axie Infinity” was the top Ethereum game by users, with 24,310 of them. In order to play, you need to buy “Axies” — fantastical creatures that battle, breed, and trade on behalf of the players — with your Ethereum. You can build a collection of these Axies, and can also buy upgrades and extras throughout the game, similar to other non-DApp role-playing video and computer games. 

I went to the “Axie Infinity” website and was immediately discouraged. I’d have to download another wallet to get access to the game. Because of network congestion Axie Infinity users faced last year on Ethereum’s network, its creators made a second, Ethereum-connected blockchain for the game, with its own customized wallet. 

The conundrum I ran into when trying to play Axie Infinity is not uncommon for DApps in general, and is probably a large barrier to entry for most people — and especially those who are just looking to invest in Ethereum rather than go all in on the world of DApps. 

Simply put: it’s complicated. 

Plus, setting up a new wallet would mean incurring more transfer fees and more time to wait before I could play. I decided I didn’t want to be in a “digital pet universe where players battle, raise, and trade fantasy creatures called Axies!” badly enough to keep going. 

Why This Matters for Investors

Whatever crypto investors think about “Axie Infinity” or any other novel DApp, experts say more people buying Ethereum stands to benefit those who are buying in with long-term value growth in mind. 

Every transaction that occurs on the Ethereum blockchain — including those for future “Axie Infinity” players — requires payment, and “this requires that users have to buy and use ether in order to access apps built on the network,” says Coelho-Prabhu. 

This demand in turn can drive up the price of Ethereum, says Michael Angelucci, a CFP and financial advisor at Level Financial Advisors in New York. From DApps to NFTs, “it’s the demand for the coin driving the price up,” Angelucci told us recently.

So even if I won’t be attempting to play “Axie Infinity” again any time soon, Ethereum investors can benefit from those thousands of other users who are playing. This innovation on the Ethereum network is also further support for why the experts we talk to say investors should stick to Ethereum and Bitcoin. 

Whatever you might think of the latest DApp you may or may not have heard of, someone else paying to play or use it is good news for your portfolio.

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Crypto trader Michaël van de Poppe is looking at what’s ahead for Bitcoin (BTC) and the smart contract platform Cardano (ADA).

The analyst tells his 420,000 Twitter followers that the best entry point for Cardano may be gone after the asset bounced off a key support level at $1.86.

“If you want to get into Cardano, this was the region where you would want to get into it, and the higher low that might be created.

So based on the daily timeframe, the best entry might be gone, but you’re still getting a better entry than the ones who have been buying around $2.80.”

Van de Poppe is now looking to see if ADA can turn resistance at the $2.37 level into support.

If the markets correct further, he is keeping an eye on the $2.15 level as a potential buy zone.

“When you’re looking at the four-hour time frame, I think you’re getting the exact same view as what you have right now on Bitcoin and [Ethereum], actually. So you’re going to look for an entry point which is around the fact of $2.15, so anything in this region might be a good entry point if we get a corrective move.”

Looking at the Bitcoin pair, van de Poppe thinks that ADA will most likely consolidate briefly after retesting support at its previous all-time high.

“We can see that we’ve had a beautiful retest of the previous high here too, and therefore some consolidation is most likely going to take place before we’re going to have new impulse waves.

So both the USDT and BTC pair are looking for continuation, and I think that’s just great, and I think that’s just what we want to see with the markets right now.”

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Stack Exchange network consists of 173 Q&A communities including Stack Overflow, the largest, most trusted online community for developers to learn, share their knowledge, and build their careers. I want to buy a full bitcoin at the current price. But coinbase only allows me to buy in $250 increments. Where can I go to purchase an entire bitcoin?I would go to Localbitcoins.com but their fees are usually too high.So what I need is a low fee way of buying an entire bitcoin.ThanksIf you are in the US, you can buy it on coinbase.com or https://exchange.gemini.com/You need to buy some Bitcoins on coinbase, they will automatically increase your limit. I can buy $5000 worth of Bitcoins on Coinbase, and would if I had the money.Fees of Gemini are low, ie .05 cents for $20 in BTC, or 50 cents for a $200 order.Or localbitcoins, if you care about anonymity, but they charge a high markup.Try http://localbitcoins.com. From the website:Buy and sell bitcoins near you Instant. Secure. Private. Trade bitcoins in 14431 cities and 248 countries including United States.It does appear to require an account to be made, but it appears to be free. Thank you for your interest in this question. Because it has attracted low-quality or spam answers that had to be removed, posting an answer now requires 10 reputation on this site (the association bonus does not count). Would you like to answer one of these unanswered questions instead?asked11 months agoviewed 2,798 times active10 months ago site design / logo 2018 Stack Exchange Inc; user contributions licensed under cc by-sa 3.0 with attribution required. rev2018.4.21.29995

Bitcoin is the biggest cryptocurrency by market value and, for now, continues to dwarf its competitors. But the rise of crypto rivals with far more real-life applications means it will be dethroned sooner rather than later, according to financial TikTok influencer Mason Versluis.

21-year old Versluis also goes by the user name Crypto Mason and has almost 500,000 followers on his TikTok account, which he uses to make short videos to educate his viewers about crypto and the markets.

Versluis, who has been trading crypto since he was 15, recently spoke to Insider about his outlook for the market.

"The psychological thing of bitcoin always being number one and king can be gone. So, by 'slaying bitcoin', I mean I want something to pass it and then we'll see what happens after that," Versluis said.

Bitcoin has a market capitalization of just under $800 billion, out of the roughly $1.9 trillion that the entire crypto market is worth, according to CoinMarketCap.

In the last 12 months, it's gained almost 350% in price, but Versluis thinks there's more value to be had elsewhere.

"My dad actually told me about XRP when I was 17, and I've been in ever since, off and on," he said.

"I am one of these people who think XRP is a 'better bitcoin'. And it actually tackles the payments problem better than bitcoin can or ever will," he added. Ripple Lab's XRP token is used in fast-payments systems - an area where bitcoin cannot really compete given how slow its network is in comparison. XRP is one of the larger crypto coins and has kept pace with bitcoin in the last year, rising around 320%.

Ether, the native token of the ethereum network, is the second-largest cryptocurrency and accounts for about 20% of the market. Its blockchain's ability to run decentralized finance applications, smart contacts and other protocols has seen a rush of investor cash into ether this year, which has gained almost 800% in that time.

"It's got to have use cases, meaning: does this token do nothing? Am I just buying this token because I think it's going to go up in value?" Versluis said.

"That is what I am personally invested in, just because of the potential - they actually do something. Ethereum has so many decentralized applications built on it," he added.

When it comes to taking a position in a coin, Versluis says he isn't a day trader.

"That's a lot of stress, you've got to be at your computer watching the markets," he said.

"I'll see an opportunity, put some money in, and I'll basically ride that rocket up until I think it's time to sell. I sell out of it and I put it into a stablecoin, such as USDT or USDC. And then, I just make profits, and then I'll reinvest some of that into my main portfolio. So it's a slow process," he said.

As a relatively young trader who says part of his crypto passion is its decentralized, free nature, the question arises as to what Versluis thinks about regulation in this market. Unlike a lot of crypto fans, he's not against it. But he does believe that any rules need to adapt to the reality of the crypto market and one size does not fit all.

"It's a digital world. And we're only going to get more digital and more virtual," he said.

"They can't just take the old system, laws and slap it on to crypto. It doesn't work. So, what's gonna come out of this is a whole new way of looking at these tokens."

Because we’re talking about cryptocurrencies generally and Cardano (CCC:ADA-USD) specifically, by the time you read this, the paradigm could have changed dramatically. Contrary to some misunderstandings about how the internet publishing industry works, I as an independent freelance contributor do not dictate the publishing schedule of InvestorPlace.

Also as an independent voice, nobody dictates to me what I should or should not write. Again, contrary to misunderstandings, I am not beholden to a hedge fund or to any other influencing agent other than my own genuine opinions. I’m grateful for this leeway because it allows me to present my own thoughts, even if they go against the opinions of others.

What I’m about to say next is controversial but it has to be said if you have any hope at all of growing as an investor and most importantly, as a person: the Cardano craze has proven to us that we must be willing to kill sacred cows.

This is particularly important in the investing realm of the blockchain. Whether we’re talking about Cardano or any other cryptocurrency, we must separate the technology from the speculation. Otherwise, you’re going to end up becoming an unwitting victim of a scatological experiment.

Because I’ll tell you something – excrement has the same putrid odor, whether it’s decentralized or not.

As you might guess, I’m upset but you’re also right to wonder why. On Sept. 8, in my weekly crypto gallery update, I stated the following: “For anyone remotely interested in cryptos, Cardano’s current circumstance is a massive gut check. And for full disclosure, I recently sold a significant amount of ADA-USD as I fear prices may be headed lower.”

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I got out, yes, but so many HODL’d (held on for dear life) for no good reason. And that reason is giving us all a bad name.

Cardano Like Any Crypto Is Speculation

I’m an idiot.

Yes, I embrace that identity because in all bluntness, the one thing that is true in this life is the more you think you know, the less you actually do. That’s why if you get anything out of this article, forget anything I said about Cardano and HODL this truth: beware the expert.

This sounds contradictory because I’ve appeared on international cable news programs as a guest expert. Listen, this is all just part of the marketing game that every business in the world plays. It’s like commercials in football games. It stinks but without those commercials, you’d have to buy $800 tickets to watch the matchups.

But the difference between me and the self-appointed crypto gurus that litter YouTube and other social media platforms is that I don’t believe in my own nonsense. I’m a student of the markets and I’ll be a student forever because no one – and I mean absolutely no one except the Lord himself – is the sole authority of human emotions and speculation.

Back when I was working at Sony (NYSE:SONY), a colleague of mine remarked that with the 4GB flash memory card, someone can store a lifetime of photos. He was correct but only in a defined paradigm where technology never pushes us past 720P resolution.

We’re way beyond that which brings me back to my earlier point: an expert, especially a crypto expert, is like someone trying to sell you a 4GB flash memory card today for a low, low price of only five monthly installments of $99.99.

In other words, experts are only that because they’ve boxed in their paradigm. In the case of Cardano, a paradigm where ADA-USD trades for $10 a pop or whatever is the fancy upside target.

It could happen but here’s the thing: where were the experts warning about the big crash before Sept. 20?

A Sector Gone Mad

So, here’s why I’m upset. As of this writing, I have a clear opportunity to buy Cardano at a 15% discount from the time that I sold a chunk of my position. It’s not jealousy of missing out that drives my anger but rather that the masses give too much credence to woefully unqualified “experts.”

Then again, I guess it is jealousy!

Prior to the recent crash, there weren’t too many people advocating what I was talking about – selling Cardano before its technical posture got too ugly. Instead, the experts were aimlessly reciting the mantras in their isolated silos where cryptos should only be HODL’d, never sold to advantage overbought conditions.

Like I said, I don’t have all the answers. Frankly, I’m in the same boat you are, navigating the madness of the markets. Love me or hate me, I’ll tell you one thing. If I don’t feel comfortable about something, I’m going to let you know.

That way, you too can have your 15% discount and perhaps a shade more respect for those who are genuinely trying to do a good job for our audience.

On the date of publication, Josh Enomoto held a LONG position in ADA and SONY. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

Article printed from InvestorPlace Media, acred-cows/.

©2021 InvestorPlace Media, LLC

In February, Glauber Contessoto, 33, invested all of his savings in dogecoin, a meme-inspired cryptocurrency that surged in value this year. And about two months later, in April, he says he became a dogecoin millionaire on paper.

Now, Contessoto plans to go "all in" on another cryptocurrency, he tells CNBC Make It. His next choice is the Cardano blockchain and its altcoin ADA, which launched in 2017 and recently became the third-largest cryptocurrency by market value, behind bitcoin and ether.

Although he has no plans to sell his dogecoin, "I'm going to start buying up as much Cardano as humanely possible with every bit of money I start making from now on," he says.

Contessoto plans to wait until there is a dip in the price of ADA to begin investing, he says, just as he did with dogecoin.

However, many financial experts would advise against going all in on one investment, especially within the crypto space. Cryptocurrency can be a very risky investment in general, and experts say altcoins can be even more so.

"Risk can be measured in a variety of different ways," Meltem Demirors, CoinShares chief strategy officer, previously told CNBC Make It. But "many of these assets are much more risky than bitcoin and ethereum."

It's possible to lose your entire investment regardless of how careful you are.

Nonetheless, Contessoto is still bullish on both dogecoin and Cardano.

Since Contessoto didn't buy ether, the cryptocurrency native to the Ethereum blockchain, early on, he views Cardano as the "next best bet," he says. Supporters of Cardano, like Contessoto, see it as a competitor to Ethereum since its creator, Charles Hoskinson, is also a co-founder of Ethereum.

Cardano vs. Ethereum

However, critics of Cardano say it has a long way to go before measuring up to Ethereum.

Ethereum is known for its smart contract capabilities, which power DeFi, or decentralized finance, apps and NFTs, or nonfungible tokens, among other things.

Currently, Ethereum operates on a proof of work, or PoW, model, where miners must compete to solve complex puzzles in order to validate transactions. But soon, Ethereum plans to migrate to a proof of stake, or PoS, model, where people can mine or validate transactions according to how many coins they hold. Supporters of PoS say it uses less energy.

Read more about cryptocurrencies from CNBC Pro

Bitcoin just formed a 'golden cross' chart pattern, which has heralded big gains in the past

Cathie Wood sees big gains for stocks, crypto and Tesla: 'If we are right, the returns are enormous'

An investor’s guide to Solana, the Ethereum alternative that's up 300% in the last 30 days

This migration is part of a much-anticipated upgrade to Ethereum that its developers say will improve the blockchain and its efficiency significantly overall.

However, Cardano already operates on a PoS model. Because of this, the Cardano community sees the blockchain as a more environmentally friendly alternative to Ethereum.

But unlike Ethereum, Cardano is still working on its smart contract capabilities, which it plans to release as part of an upgrade later this year.

This is in part why billionaire investor Mark Cuban, for example, thinks that so far, Cardano's use cases fall short. "Are you, personally, able to use [Cardano] for anything? If so, what have you used it for? That's the question I ask about all crypto [before investing]," Cuban tweeted in May. "Do you find yourself using it for anything that you find value in?"

If you're planning to invest, keep in mind that financial experts recommend being very careful when investing in cryptocurrencies overall due to their volatile and speculative nature.

Some experts warn to be especially cautious when investing in altcoins in particular, since many of them lack the scarcity and technological development that bitcoin has, for example. Investors could get burned, and in turn, should only invest what they can afford to lose.

While Contessoto acknowledges that "it's still early on" for Cardano, "I'm going to be the biggest Cardano supporter," he says. "I'm just waiting on a massive dip before buying into it."

As of 10:50 a.m. EST on Thursday, Cardano's ADA is trading at around $2.60, according to CoinMarketCap, and dogecoin is trading at around 27 cents.

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While NFTs have been around since the launch of Bitcoin in 2009, the market has only recently taken off. Non-fungible tokens (NFT) have become one of the biggest crypto crazes of 2020 and 2021. NFT sales totaled $95 million in 2020, and in just the first half of 2021 sales reached nearly $2.5 billion.

Digital artist Mike Winkelman, known as Beeple, recently sold an NFT for $69 million, and soccer great Lionel Messi recently launched his own NFT collection. But you don’t have to be famous to create or trade NFTs. Read on to learn more about the NFT market and how you can use these digital assets.

Related: Popular terms every crypto beginner needs to know

NFTs 101

NFTs are collectible crypto assets, intended to represent a unique digital item that can be bought, sold or traded.

The term “fungible” refers to something that can be interchanged for something else just like it. A dollar bill, for example, is fungible because all dollar bills are more or less the same. Non-fungible tokens, then, are digital items that cannot be duplicated, such as:

ArtworkMusicCollectibles, like trading cardsItems within video games like skins, weapons or avatarsVirtual land

The possibilities are almost endless. Individuals can now create something digital, put a unique stamp on it within the blockchain network, and sell it to someone without needing a third-party intermediary like an art broker or pawn shop.

How to buy NFT tokens

In some ways, trading NFT tokens is similar to trading other kinds of crypto. Before learning how to buy NFT tokens, there are a few things worth considering, such as:

What marketplace do you intend to use?Which cryptocurrency will be needed to fund your crypto wallet and make the purchase?Are the NFTs you’d like to buy only available at a certain time?

Some NFTs are only available on certain platforms. Someone who wants to buy an NBA Top Shot pack of virtual trading cards, for example, must open an account with NBA Top Shot and create a Dapper wallet.

The buyer will then fund their wallet with either the USDC stablecoin or any number of supported fiat currency options. After that, a buyer will have to wait for a card pack drop and buy a pack before they sell out. NFT drops have become a popular method of selling NFTs to eager buyers. Drops like these often require users to sign up and have their accounts funded prior to the drop so they don’t miss their chance to buy once the NFTs drop.

Drops can sell out in a matter of seconds, so being ready ahead of time can be crucial. Of course, there are other NFTs and NFT platforms that don’t utilize drops. The main things to keep in mind when pondering the question, “How to buy NFT tokens?" are what wallet to use, which cryptocurrency you’ll use and what platform to use.

How to create NFT art

What about those who are uninterested in learning how to buy NFT tokens and instead want to create their own? Creating a piece of NFT artwork is fairly straightforward and does not require in-depth knowledge of the crypto industry. Before beginning, a creator will have to figure out which blockchain on which they want to issue their NFTs. Ethereum is the most popular blockchain service for this purpose at this time, but a variety of other blockchains are gaining in popularity, such as:

Cosmos (ATOM)TezosPolkadotTron (TRX)Flow by Dapper LabsBinance Smart Chain

Each blockchain comes with its own unique NFT token standard, marketplaces, and wallet services. If someone were to create NFT tokens on Binance Smart Chain, for example, traders can only use those NFTs on platforms that support Binance Smart Chain assets. So they couldn’t sell them on an NFT marketplace like OpenSea which is based on Ethereum.

Since Ethereum is the most commonly used NFT ecosystem, let’s look at what’s needed to mint a new NFT on the Ethereum blockchain. First, an NFT creator would need an Ethereum wallet that supports ERC-721, Ethereum’s NFT token standard. Some wallets that qualify include Coinbase Wallet, MetaMask, Trust Wallet, Enjin and D’Cent.

An NFT creator will also need about $50 – $100 worth of Ether (ETH) tokens. Those using the Coinbase wallet can buy ETH from Coinbase with US dollars or another fiat currency. Other users will have to purchase ETH from a crypto exchange and send it to the wallet they set up in the previous step.

After creating a wallet and funding it with ETH, it’s time to choose a platform. A variety of NFT-focused platforms allow users to connect their wallets and upload the images or files that they’d like to turn into NFTs.

Some popular NFT marketplaces on Ethereum include:

MintableRaribleOpenSea

These three marketplaces all have a “create” button located in the upper-right corner. Let’s look at how things work in OpenSea. Clicking “create” takes you to a screen that asks to connect to your Ethereum-based wallet. After entering the wallet password as requested, the wallet will connect with the marketplace. You might have to sign a message in their Ethereum wallet to prove they own it.

Next, you would hover over the “create” button and select “my collections.” Then you would click the blue “create” button. A window will pop up that lets you upload the image or file you want to turn into an NFT. Add your name, and write a description. Basically, you’re creating a folder where you can place the NFTs you create.

After assigning an image for the collection, it will appear on the left-hand side of the screen. Then you’ll have to add a banner image by selecting the pencil icon on the top right. At this point, you can start creating NFTs. Click on “Add New Item” and sign a message with your wallet. You’ll then arrive at a new window where you can upload the item you want to turn into an NFT, whether It be audio, an image or a GIF.

On OpenSea and similar platforms, users can also add special attributes to make their NFTs more unique. You can also add special content that can only be opened by the buyer. This could include things like discount codes or passwords that let buyers access particular services.

After finishing, clicking “create” at the bottom of the page and signing another wallet message will confirm that you have created your NFT. The token will then show up in your collection.

How to sell NFTs

Once you’ve purchased an NFT, you’ll need to decide whether you want to HODL it, or sell it. To sell an NFT, you must list the token on a marketplace. To do this, click on the NFT in your collection that you’d like to sell and locate the “sell” button. Clicking on “sell” will bring up a pricing page, allowing you to set the terms of the sale. You can choose either a fixed price or an auction sale. NFTs typically sell for ETH or ERC-20 tokens. Some platforms only let you sell for the native token of their blockchain, however.

NFT creators can also earn royalties for their artwork each time someone sells their tokens to a new person. In OpenSea, you set this up by clicking the “edit” button and making use of the option to program royalties into an NFT. You would receive royalties through a variety of ERC-20 tokens. Once they’ve selected that option, creators earn royalties automatically through smart contracts.

The takeaway

Overall, it’s not that hard to learn how to buy NFT tokens or to create and sell them. Developers have created graphic user interfaces that make the process as painless as possible. Of course, having previous experience with using cryptocurrency wallets will be a big help.

Learn more:

This article originally appeared on SoFi.com and was syndicated by MediaFeed.org.

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Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA  , the SEC  , and the CFPB, have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments.

Bitcoin, Ethereum, Cardano, Filecoin, Litecoin, Orchid, Algorand and Bitcoin Cash are eight cryptocurrencies now available for purchase directly from a FDIC-insured checking account if you are a customer of Vast Bank, N.A. According to the CEO Brad Scrivner, the bank’s move into offering crypto was approved by the OCC, but also included discussions with the Federal Reserve as well. Vast Bank, N.A. is now the first federally chartered bank in the U.S. to offer the ability to buy, sell, and custody cryptocurrencies - directly from a checking account - all under one roof.

“This is great news for the cryptocurrency community. It has historically been difficult for digital asset companies to even get banking services, much less to have a bank that provides digital asset services. I view this as a step in the right direction, and I suspect that we will see more banking/digital asset ventures in the future,” said Judith Rinearson, Partner at K&L Gates, a legal expert who helps navigate many cryptocurrency clients.

Irina Berkon, CFO at Metallicus, a U.S.-based crypto exchange commented, “The application of blockchain technology has been growing, especially in the financial services arena. Proper, thoughtful and progressive regulation is key to promoting legitimate use cases for digital assets. I am so happy to see the Vast Bank opening its doors to the unbanked population of crypto holders, blockchain development companies, innovators and creators who benefit from strong regulations by a financial institution.”

I had the chance to interview Scrivner who shared the journey of Vast Bank in what today is the first OCC regulated bank to allow customers to purchase crypto directly from their bank accounts. He attributes both the rising popularity of crypto and his understanding of the technology that has allowed his organization to be agile enough to shift into the world of crypto custody.

Scrivner asserts that a national bank is the best place to buy and sell cryptocurrency. “We're familiar with regulation, we're going to do the right things, we're going to do things to make sure the financial system is kept safe and sound,” said Scrivner.

As to the types of customers that would come to his bank to purchase cryptocurrency as opposed to off on an exchange, Scrivner declared, “There's lots of different customers out there that may want to control everything and have their own wallet, their own passcodes, and then there are those who are crypto curious and may prefer to work with a bank or an intermediary, just because they don't quite understand.”

Below is my interview with Scrivner of Vast Bank, the first federally chartered bank to both offer custody and exchange of crypto directly from a bank account.

Jason Brett: Welcome. I’m really excited to talk to you today about a huge announcement that was made on the heels of an initial announcement regarding the bank’s successful test in January of a cryptocurrency purchase with U.S. dollars at a bank. Could you tell us a little bit background of what interested your bank to deal with cryptocurrency?

Brad Scrivner: Thanks, Jason. Vast Bank wanted to remain relevant to what we thought were going to be ever changing customer preferences. For context, Vast Bank is a 39 year old family-owned national bank that also believe that technology has enabled the customer in a way that it really hadn't been enabled in the financial services industry previously, and that cryptocurrency was going to be very disruptive in financial services. And so for us, we're family owned and wanted to make a decision to have a platform in place, and also to have the people in place where we could be able to adapt quickly to what customers were asking for.

Brett: What initiated the move to start the process of testing the custody of cryptocurrency at your bank?

The background which led to the cryptocurrency decision was driven by the announcement of the OCC by Mr. Brian Brooks in July of 2020 when he made the announcement that with a National Bank Charter that we were able to custody crypto assets. We got our shareholders and our Board together and went through the business cases. And we decided to go ahead and pivot off of some of the other things that we were doing and to prioritize crypto in our work.

Brett: Was blockchain and cryptocurrency new to you and your bank? Was it on your radar before the announcement from Brian Brooks?

Scrivner: Yes - blockchain was something that I've been familiar with all the way back to 2009. Starting in 2016, we were having discussions with our shareholders about disruption that we felt like was going to be happening and what I felt like was going to be massive consolidation in the financial services space. We spoke with our shareholders about blockchain use cases we thought might exist such as trade finance, cross border payments or foreign exchange for our bank. The time spent understanding the technology enabled us to be agile enough to pivot and to prioritize cryptocurrencies

Brett: You've brought some world class partners to the table like Coinbase, which is the largest US exchange, and also SAP. What can you about those partnerships, and how you brought everyone together to pull this off?

Scrivner: As you can imagine, implementing this technology is not easy for a relatively small bank. SAP is historically at least thought of as one of the largest companies in the world who services the financial services industry. They believed in what we're doing and have been tremendous partners. With Coinbase, that was an introduction from one of our FinTech partners. Coinbase thought it was a really good opportunity for a bank to serve segments of their clients and different types of clients. And they have continued to be a really good partner in terms of referrals in terms of encouraging folks to talk with us about the custody opportunity.

Brett: What type of market research did you do before launching into cryptocurrency?

Scrivner: A Gallup poll, and our own internal surveys, showed us that more than 60 percent of individuals are at least interested in crypto - what I like to describe as ‘crypto curious’. But they're also saying we want to have a bank involved with our custody of cryptocurrency. After our February announcement of our successful test, we had a substantial “whale” in the industry contacted us because they were specifically waiting for a national bank to get involved in it.

And why is that? Well, we're highly regulated, we're going to do the right things. We're going to do our audits, we're going to do the due diligence that is appropriate for a national bank to get involved in. I can get up on my soapbox on this thing, really quickly. This is why the defi world ought to be embracing this and we need to be working together, right? There's lots of different customers out there from sophisticated that may want to control everything and have their own wallet, and pass codes, all the way to those that are ‘crypto curious’ and may prefer to work with a bank or an intermediary, just because they don't quite understand. And we're familiar with regulation, we're going to do the right things, we're going to do things to make sure the financial system safe and sound.

Brett: Can you tell us a little bit about the suite of services that people can now enjoy at your bank?

Scrivner: We have launched crypto services for individuals as a ‘self service’ capability. When customers fund a normal bank account, you have the ability to purchase eight cryptocurrencies, just by signing up for that account. When you ask about custody and exchange, you can buy, you can sell, and you can store those eight crypto currencies by opening a single bank account. Now, technically behind the scenes, each one of those cryptocurrencies is in another account, but it is shown on your mobile device so that you understand what you have in each one of those coins - but it is settling and coming directly out of your bank account. So there's instant settlement into your checking account when you sell the cryptocurrencies or instant settlement to purchase the cryptocurrency as well.

Brett: What are the eight cryptocurrencies that your bank offers?

Scrivner: Bitcoin, Ethereum, Cardano, Filecoin, Litecoin, Orchid, Algorand and Bitcoin Cash.

Brett: If I had Bitcoin that I had purchased already, could I transfer that over and have Vast Bank be the custodian?

Scrivner: Not yet. This is on our roadmap and we are actively working on it. And I promised my team I wouldn't give a timeframe on this - I'd love to give a time frame. But you are a former regulator so you understand - a lot of people don’t get it. We are required to understand the source of funds at a bank. All funds goes through the KYC process and our BSA and AML program making sure we have an understanding of the type of activity to expect in an account. If we think about the Poly network hack that just happened. The part of this that is of most interest to me is that evidently, that person was involved in the KYC process somewhere, right? And because of the nature of the blockchain, all of a sudden there was traceability to be able to identify that person. So that if it was a bad actor, he was forced, let's say to return. There are other instances where the coins have disappeared and things like that. We as a regulated entities are committed to doing the right thing. Part of that is understanding where those coins come from. And in order to do that, we have to have tools in place, and people in place to be able to do the right KYC/ BSA /AML activity. And in order to do that, we have to have the tools in place to analyze the chain. That's the process, we've already got our partners selected, we've got the contracts in place. We are standing up this program, but as you know, there's a a big difference between deciding to do something and operationalizing it and putting it at scale. There are a lot of new high net worth folks and let's face it, some of the early adopters right are walking around and I don't know how they sleep at night, you know, with their wallets, right? It’s the equivalent of, you know, the potential for their house to burn down. And all their money is stored underneath the mattress. You know, that's why there's so much interest in a national bank coming into play. People are tired of burying their money basically in the backyard and are fearful it's gonna get stolen or whatever the case may be.

Disclosure: I hold Bitcoin in my financial portfolio and also serve as an advisor to Metallicus, Inc.

…

Ether, the cryptocurrency a part of the Ethereum blockchain network, had a significant surge on Wednesday with a price of $3,563, according to Bitcoin.com.

Ethereum is currently right behind Bitcoin, with a market capitalization of $434 billion, according to real time data tracked by CoinMarketCap (Note: market capitalization is constantly changing). It experienced a 15% surge within the past seven days.

Bitcoin and Cardano have also recently made moves in the cryptocurrency world. Bitcoin hit over $50,000 for the first time since May last month, while Cardano (ADA) spiked to almost $3, an all-time high for the cryptocurrency.

How to buy Ethereum

Ethereum is available to purchase on Crypto.com, Coinbase, Bitcoin IRA, Kraken and eToro, to name a few.

What is cryptocurrency?

Cryptocurrency is a digital asset designed to be used over the internet, according to Coinbase. It’s decentralized, meaning it isn’t controlled by the government or any other central authority such as a bank.

If you’re interested in investing in other cryptocurrencies such as Bitcoin, Cardano, Dogecoin and Shiba Inu, here are some options to get you started:

IRACoinbaseCrypto.comeToroKrakenGeminiRobinhood

If you want to educate yourself more on cryptocurrency and how it works, you can always enroll in an online course, too. Courses are offered at online platforms Coursera, LinkedIn Learning and Udemy.

RELATED STORIES ABOUT RETAIL AND SHOPPING:

Bitcoin, Cardano (ADA) price surges: How to buy cryptocurrency following market spike

Samsung launches huge Labor Day sale: See the deals on TVs, laptops, phones

How to buy Shiba Inu coin in the U.S.

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Cryptocurrencies have taken off in the past year as investors hoard digital assets while the dollar falls, weakened by waves of fiscal and monetary stimulus in response to the pandemic.

Many who have missed the big run in cryptos like bitcoin (BTC), ether (ETH), and several altcoins but are optimistic about their futures are counting on a pullback, as are crypto bears and skeptics.

But Michael Sikorsky, the founder and CEO of the financial-intelligence platform Copia Wealth Studios, is bursting the bubbles of those waiting for the crypto bubble to burst.

"I would say they're overly volatile," Sikorsky said. "That's not the same thing as being in a bubble. People will say that because they think that they're backed by nothing. It's like there's nothing underpinning their valuation, but I don't believe that to be true."

Unlike stocks, where shareholders are entitled to a share of that company's future profits via dividend payments, cryptocurrencies don't intrinsically generate material value, as Warren Buffett has noted. That doesn't mean they don't have value — it's just much harder to pinpoint.

There are two main groups of people buying cryptocurrencies right now, Sikorski said: those entranced by the idea of getting rich quickly and those who understand cryptos and believe in their uses. Sikorsky said he belongs to the latter category.

"We care more about the platforms," Sikorsky said. "So if you go back and you look at the altcoins that we buy, we allocate probably 10 times more capital when it's a blockchain that can be programmed." He continued, "Anywhere that other people can build apps and there's a platform opportunity, that's the real value."

Cryptos run on blockchains, which are public ledgers that record all interactions on a network. The technology allows for transparent and independent verification of payment transactions without a central authority like a government overseeing and regulating the action.

Blockchains will be the backbone of the next iteration of the internet, Sikorsky said, which proponents call "Web 3." That's why William Noble, the chief technical analyst at crypto-data firm Token Metrics, called altcoins "the future of technology" in a recent interview with Insider.

"Look at the blockchain, look at ethereum, look at solana (SOL), look at all the apps getting created on top of that," Sikorsky said. "It's like burgeoning Web 3.0. That's kind of like saying if you go back to the dot-com bubble, there was a lot of really, really crap things that happened, but there's also the beginning of what actually changed the economy."

Many altcoins "will wash out," Sikorsky warned, adding that crypto bulls must be careful and know what they own. He noted that the biggest coins should be safe no matter what in the long term.

"Bitcoin and ethereum, you don't have to be so conscientious," Sikorsky said. "You can just index those. The altcoins? You should be a conscientious investor."

Sikorsky isn't the only one keeping a close eye on altcoins. Nikolaos Panigirtzoglou, a global market strategist at JPMorgan, recently warned clients that the run-up in altcoins over the past few months could predicate a sudden crash. 

Sikorsky has steadily maintained ambitious price targets of $100,000 and $10,000, respectively, for bitcoin and ether — ethereum's native token — by "no later" than the second half of 2023. He said that he'd be more confident if he had a crystal ball, but added that there's plenty of reason for optimism.

"The supply-of-wallets curve and then the supply-of-coins curve — it automatically makes a pressure to raise the price," Sikorsky said. "Wallet expansion is growing exponential, and the coin supply is going down. You've got classic supply and demand driving the price up."

Deflationary events for both bitcoin and ether will restrict the number of new coins that enter circulation. For bitcoin, a halving event scheduled every few years will steadily make the token harder to mine. Similarly, ether benefits from a protocol called EIP 1559 that slows supply growth and makes the currency relatively more scarce.

Unlike ether, bitcoin's supply is capped at 21 million units, which makes it an inflation hedge, Sikorsky said. That quality could come in handy as the Federal Reserve rapidly expands the US money supply through pandemic-era emergency policies.

Still, Sikorsky is more bullish on ether and said he tries to hold at least twice as much of it as he does bitcoin, adding that the ratio could increase in the future. That's because bitcoin isn't programmable, unlike ethereum and other altcoins he likes. There's no guarantee of success for any cryptos, especially not the smaller ones, but Sikorsky still believes they're a worthy bet.

"Who's going to be the market leader? We don't know," Sikorsky said, a sentiment shared by Craig Kirsner, the president of retirement-planning services firm Stuart Estate Planning Wealth Advisors. "If you don't have an allocation, there's that old Larry Hite quote: 'If you don't bet, you can't win. If you lose all your chips, you can't bet.' So you have to bet some chips on the altcoins because you don't know where they're gonna go and how much they're gonna move."

Below are the top four altcoins that Sikorsky said Copia Wealth Studios is accumulating, along with the symbol, market capitalization, protocol, maximum supply, and Sikorsky's thesis for each.

Symbol: SOL

Market cap: $46.3 billion

Protocol: Proof of stake

Maximum supply: Capped at 500 million

Thesis: "Imagine you could have owned a piece of SMPP of every email that ever gets sent," Sikorsky said, referring to short-message peer-to-peer, the backbone of SMS text messages. "You actually could have owned that in Web 1.0. Instead, those protocols had to be open-source. Now the protocols don't actually have to be open-source, so you can actually own a piece of these blockchains. And so all these future developers building these future smart contracts and apps, that's the thesis."

Symbol: ADA

Market cap: $78.7 billion

Protocol: Proof of stake

Maximum supply: Capped at 45 billion

Thesis: "So, here's why we have ADA and Solana: Who knows who's going to be the next winner?" Sikorsky said. "So you've got ethereum as the market leader right now, but it's shifting to proof of stake. A lot of people hate how much gas fees are on ethereum right now, so there's some issues. Maybe they'll address them and they'll stay the market leader. But you've got ADA coming out with a way better gas formula for transaction fees."

Symbol: SAND

Market cap: $713.7 million

Protocol: Play to earn

Maximum supply: Capped at 3 billion

Thesis: "I like Sand for this reason: I wish I could've been an early investor in Roblox," Sikorsky said, referring to the online-game platform. "Roblox, they crushed it. In Sand, it's like Roblox's platform, but there's also a token inside of that world. So the more that people play in that world, it's kind of like, again, if you're looking at it in like five to 10 years, it can grow exponentially, just like how Roblox's platform did."

Sikorsky added: "I didn't get to own any of Roblox. I didn't get to be a first-rounder investor in Roblox. So Sand, to me, is a way to watch what Roblox did and then see another platform come and get a chance to be early into that next platform. Profit is recognizing an aspect of reality ahead of your peers. The next big thing is always dismissed as a toy."

Symbol: OMI

Market cap: $758.1 million

Protocol: Proof of reputation

Maximum supply: Capped at 775 billion

Thesis: "We think that there's this wave of NFTs and digital-asset collecting, and this makes it really easy to buy and create digital assets," Sikorsky said, referring to nonfungible tokens. "It's like owning a piece of a global retail shop."

Was this article valuable for you? More:FeaturesInvestingEthereum

The venture capital industry is beginning to take a good, hard look at a new financial instrument coming out of the bitcoin community — Initial Coin Offerings, or ICOs. Also known as “token sales,” this new fundraising phenomenon is being fueled by a convergence of blockchain technology, new wealth, clever entrepreneurs, and crypto-investors who are backing blockchain-fueled ideas. ICOs present both benefits and disadvantages, as well as threats and opportunities, to the traditional venture capital business model.

Here’s how an ICO typically works: A new cryptocurrency is created on a protocol such as Counterparty, Ethereum, or Openledger, and a value is arbitrarily determined by the startup team behind the ICO based on what they think the network is worth at its current stage. Then, via price dynamics determined by market supply and demand, the value is settled on by the network of participants, rather than by a central authority or government.

Insight Center

Venture capitalists, who generally have been standoffish to the ICO phenomenon, are now becoming more interested in it for a number of reasons. One is profits — cryptocurrency investors made some massive returns in 2016, with cryptocurrencies from Blockchain startups Monero and NEM both seeing 2,000% increases in value. For example, the cryptocurrency used for the Ethereum network, called Ether, saw its value double in just a few days in March 2017. Yes, in three days, people who invested in Ether doubled their investment. Those investors can opt to cash out to a fiat-backed currency, or wait for the cryptocurrency to continue to rise (or fall). Volatility is a two-way street. While the price of Ether has been rising, Bitcoin has dropped 20% to $1,000 dollars from a record $1,290 on March 3, 2017.

The second reason VCs are becoming more interested in ICOs is because of the liquidity of cryptocurrencies. Rather than tying up vast amounts of funds in a unicorn startup and waiting for the long play — an IPO or an acquisition — investors can see gains more quickly, and can pull profits out more easily, via ICOs. They simply need to convert their cryptocurrency profits into Bitcoin or Ether on any of the cryptocurrency exchanges that carry it, and then it’s easily converted to fiat currency via online services such as Coinsbank or Coinbase.

What traditional investors don’t like about any of this is the regulatory uncertainty; the high valuations and over-capitalization; the lack of control over financials, strategy, and operations; and the lack of business use-cases. And like any industry, the ICO arena has had its fair share of outright scams, pump and dumps, and blatant Ponzi schemes. However, much of the criminal activity is now being mitigated by self-organized, crowdsourced due diligence in the community, as well as by external parties such as Smith and Crown, a research group focused on cryptofinance, and ICO Rating, a ratings agency that issues independent analytical research on blockchain-based companies.

At least one VC firm is moving into cryptocurrencies. Blockchain Capital is set to raise its third fund via a digital token offering in the first-ever liquidity-enhanced venture capital fund (where people can invest without locking their money up for years on end) via a digital token called BCAP.

ICOs are the Wild West of financing — they sit in a grey zone where the U.S. Securities and Exchange Commission (SEC) and many other regulatory bodies are still investigating them. The main problem is, though, that most ICO’s don’t actually offer equity in start-up ventures; instead, they only offer discounts on cryptocurrencies before they hit the exchanges. Therefore, they don’t fit into the current definition of a security, and are technically outside of traditional legal frameworks. Secondly, they are global instruments — not national ones — and they are funded using bitcoin, ether and other cryptocurrencies that are not controlled by any central authority or bank. Anyone can invest, and they can even do so pseudo-anonymously (it’s not impossible to find out who people are, but it’s not easy, either). Currently, there’s no Anti-Money Laundering (AML) law or Know Your Customer (KYC) framework, though some companies are working on that. One example is Tokenmarket, a marketplace for tokens, digital assets and blockchain-based investing, that has teamed up with the Stock Market of Gibraltar to offer KYC- and AML-compliant ICOs.

Detractors of these new funding schemes scream for structure and protection, point out the scams, demand more control, and say that without equity, investors don’t have enough skin in the game. Meanwhile, proponents retort that there’s a real need for freedom to invest outside the accredited system, which sees the wealthy getting wealthier. They argue that the door needs to close on the domination of Sand Hill Road in Silicon Valley and other VCs and investors in the tech industry who have been making massive returns on the backs of entrepreneurs for far too long.

Here are five basic principles underlying the technology.

1. Distributed Database

Each party on a blockchain has access to the entire database and its complete history. No single party controls the data or the information. Every party can verify the records of its transaction partners directly, without an intermediary.

2. Peer-to-Peer Transmission

Communication occurs directly between peers instead of through a central node. Each node stores and forwards information to all other nodes.

3. Transparency with Pseudonymity

Every transaction and its associated value are visible to anyone with access to the system. Each node, or user, on a blockchain has a unique 30-plus-character alphanumeric address that identifies it. Users can choose to remain anonymous or provide proof of their identity to others. Transactions occur between blockchain addresses.

4. Irreversibility of Records

Once a transaction is entered in the database and the accounts are updated, the records cannot be altered, because they’re linked to every transaction record that came before them (hence the term “chain”). Various computational algorithms and approaches are deployed to ensure that the recording on the database is permanent, chronologically ordered, and available to all others on the network.

5. Computational Logic

The digital nature of the ledger means that blockchain transactions can be tied to computational logic and in essence programmed. So users can set up algorithms and rules that automatically trigger transactions between nodes.

For blockchain startups, ICOs are a win-win — they allow startups to raise funds without having equity stakeholders breathing down their necks on spending, prioritizing financial returns over the general good of the product or service itself. And there are many in the blockchain community who feel that ICOs are a long-awaited solution for non-profit foundations that want to build open-source software to raise capital. Non-profits usually hold about 10-20% of the total cryptocurrency they issue; as Ethereum did in their ICO in 2014, with 20% going to the development fund and the remaining going to the Ethereum Foundation. This is so they have a vested interest in building more value, as well as having reserves for growth in the future. (As of March 2017, the market capitalization of the ether token was more than $4 billion.)

The market cap for bitcoin is now close to $20 billion, and half of that is allegedly owned by less than one thousand people, who are called “bitcoin whales.” Many of them are in China, but there are also hedge funds and bitcoin investment funds who hold massive amounts of bitcoin. Most made their money early on by buying or mining bitcoin when it was still under $10 (in the early days of 2011-2013). It’s now worth approximately $1,120 per bitcoin. These “bitcoin whales” are currently the ones who make or break many of the ICOs. Some of the enormous profits they have made in bitcoin are being channeled back into innovation, as many of them seek to diversify holdings, as well as support the ecosystem in general.

More than $270 million has been raised in ICOs since 2013, according to Smith and Crown (not including the $150 million raised in The DAO scandal, which was returned to investors). Since 2013, there’s been about $2 billion invested in blockchain and bitcoin startups from the VC community. ICOs are becoming more and more popular for startups seeking to get out of self-funding, bootstrapping starvation mode and avoid being locked in by venture capitalists, watching their own equity drown in a sea of financing rounds. ICOs are dominating the overall crowdfunding charts in terms of funds raised, with half of the top 20 raises coming from the crypto-community.

In a recent conversation, MIT scientist and author John Clippinger described the vast potential of this new movement to me as such:

One way of thinking about a crypto-asset is as a security in a startup, which begins with a $10 million valuation and becomes a $10 billion dollar entity. Instead of stock splits, the founding crypto-asset gets denominated in smaller and smaller units; in this case 1,000 to one. Here, everyone in the network is an equity holder who has an incentive to increase the value of the network. All of this depends upon how well the initial crypto-asset and its governance contract are designed and protected. In this instance, good governance, e.g. oversight, yields predictability, security, and effectiveness, which in turn creates value for all token holders.

Just as venture capitalists are taking a hard look at this new phenomenon, so should we all. It’s not just about the money that can be made; it’s also about funding blockchain projects and, in the near future, other startups and even networks, as Clippinger noted. We now have a way to easily fund open source software, housed under foundations rather than corporations, that can truly drive faster innovation. Right now, blockchain technology is at the stage where the internet was in 1992, and it’s opening up a wealth of new possibilities that have the promise to add value to numerous industries, including finance, health, education, music, art, government, and more.

GOBankingRates wants to empower women to take control of their finances. According to the latest stats, women hold $72 billion in private wealth — but fewer women than men consider themselves to be in “good” or “excellent” financial shape. Women are less likely to be investing and are more likely to have debt, and women are still being paid less than men overall. Our “Financially Savvy Female” column will explore the reasons behind these inequities and provide solutions to change them. We believe financial equality begins with financial literacy, so we’re providing tools and tips for women, by women to take control of their money and help them live a richer life.

Keep Up With the Latest: Sign Up for The Financially Savvy Female Newsletter

In today’s column, we’re chatting with Christine Brown, chief operating officer at Robinhood Crypto. Before joining the company, Brown had never independently placed a trade because “the market just didn’t feel like it was for me or wanted me.” She has since become one of the original architects of Robinhood’s platform, and now has set her sights on pulling down barriers to entry for everyday investors interested in crypto, especially women. Here, Brown shares how she moved past her own apprehensions about investing, her favorite resources for women crypto investors and why you should consider adding crypto to your own portfolio.

Tell me a little bit about your investing journey.

I feel like my story is actually similar to a lot of our customers. I had never independently placed a trade before starting at Robinhood. To me, it just felt really intimidating. I came out of college, I didn’t have a lot of money and it felt like investing was something that was for people that had this wealth that they needed to figure out what to do with. I was in an entry position. I was earning money but also had to pay things off, and it just felt like there were all these barriers to entry. I wasn’t familiar with the market and didn’t know how to choose stocks. I didn’t know what I should be investing in and so I just didn’t. I think that’s actually a story that we hear a lot — there are so many barriers and it’s so intimidating that people feel left out, and feel like it just isn’t for them. It’s made for people who already have all the knowledge they need.

I remember when I was interviewing at Robinhood I was like, I feel like I should get to know the product. So I downloaded the app. My perception of investing was that opening a brokerage account was what I saw in movies — I would have to go into a physical location, I would have to have all these documents, I would have to meet with a broker. And the experience I had opening up an account and being able to just explore and poke around and create a watch list, so I could see what was going on with no pressure to invest in anything [right away], it was just so easy. It was not what I was expecting.

The first investment I made was one single stock. I paid a little over $100 and that was my first trade. In my mind before that, I thought I would have to have a chunk of money saved up and I would have to allocate it across different investment strategies. I ended up buying a stock of a product that I use every single day. I thought, if I’m using this every day and I find it valuable, why not invest in this company?

Read: Do You Invest Like These Millionaire Stars? Find Out: 25 Money Experts Share the Best Way to Invest $1,000

What advice would you give to women who are wary about investing?

There are two pieces of advice I would give. The first is that investing doesn’t have to be a seismic shift in how you think about your money. You can start really small and build over time. The first trade I made was about $100 and that helped me dip my toe in, and I could see how I felt when the price went up or the price went down. It just opened up a learning moment for me. It doesn’t have to be this huge thing. You can start small.

The second thing is to not be intimidated by what you don’t know. Like a lot of people, I felt, I don’t know about the market. I wasn’t taught this, I didn’t come from a family that actively talked about money at the dinner table. But chances are high that a lot of other people are in the same boat as you with the things that you don’t know. See your lack of context or understanding not as a personal failing, but as a broader state of the world. You can actually see that as an advantage. We’re all a little confused.

This was something I learned on my journey with crypto. I was like, OK, not only is it investing-related, which is intimidating, but it also has a tech component. [It fell in] this intersection of two industries that are typically gated to women: tech and finance. There’s this perception of the “bitcoin bro” culture and that early adopters in the crypto space are heavily skewed male, but I realized, my lack of understanding is just like everyone’s lack of understanding because crypto is new. I thought, if I can turn around and educate myself, then it could be something that could really be advantageous for me.

Find More: 13 Ways To Invest That Don’t Involve the Stock Market

What are some good resources for women who are interested in crypto, but are unsure where to start?

If you don’t know where to start, one thing that’s really helpful is to see representation and to get to know or follow women who are in this space. There are a few women that I admire: Elizabeth Stark, the co-founder and CEO of Lightning Labs; Meltem Demirors, chief strategy officer at CoinShares; Laura Shin, a journalist who started the podcast “Unchained,” which goes into crypto topics; and Hester Peirce, an [SEC] commissioner who has gotten the lovable name “crypto mom.” I think going out and finding people who have a voice that resonates with you, and hearing how they’re thinking about it and what they’re talking about can be a really simple way for you to educate yourself and find what does resonate with you in the industry.

What is a common misconception women have about crypto that you would like to dispel?

It gets backs to [the belief that] if you don’t understand every single thing about every single different cryptocurrency or blockchain that you can’t be an investor. You can start small — you can find one thing that really resonates with you and build from there. Because cryptocurrency is something that is not only in this financial/investing world, but it’s also in the tech world, it has this dual layer of intimidation, and I think that really turns people away at the onset. You don’t need to know every single thing. You don’t need to know exactly how it works to be interested in bitcoin or any other coin out there.

Discover: 19 Areas To Invest In During a Financial Crisis

Why do you believe women should be actively investing in crypto?

Just like having a range of stocks inside your portfolio, having crypto allows you to add variety as well. Crypto also has utility — you can use it to make payments, you can buy different services, you can earn on it. It’s a really versatile investment. It’s easy for women to dip their toes in and see how they like it.

One thing that I’m really proud of and that I’m really excited about is that Robinhood has seven times the number of women crypto traders now compared to last year. We’re seeing growth on our platform of women coming and looking at crypto as a part of their financial strategy. At the end of Q1, 4 out of 10 of our women customers were crypto traders. I’m excited for that number to rise.

Last updated: Sept. 20, 2021

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Despite its relative frequency these days, ICOs remain an esoteric concept for many. So let's take a few moments to try to understand this phenomenon.

Financial authorities worldwide increasingly show interest in ICOs (Initial Coin Offering) during the last couple of years.

If the concept of the ICO is obvious for those who regularly handle crypto-currencies, it is a little more complicated for the rest of the world. Given the importance of this subject in the years to come, with the regulatory impulses of authorities worldwide, we have decided to explain it to you.

In the beginning, it was Ethereum.

The first notable ICO is that of Ethereum in 2014. The organizers sought to finance the development of a new blockchain, different from that of Bitcoin, implementing the famous Smart contracts.

Rather than simply launching a kickstarter or canvassing traditional investors, the team behind Ethereum chose to offer anyone interested in the project to trade bitcoins for Ether, the future cryptocurrency linked to the blockchain of Ethereum. More than 18 million dollars were collected in a few weeks, with an exchange rate at 0.4 dollars per Ether.

In this context, it is possible to define an ICO as the pre-sale of a new cryptocurrency by raising funds in cryptocurrency in the form of a crowdfunding campaign. But this definition does not cover all possible cases.

Smart contracts and The DAO

As a reminder, a smart contract is a small piece of code. It automatically executes a given task when certain pre-planned conditions are met.

To give a very concrete example of their interest, the insurer Axa makes simple use of this function with its Fizzy insurance. If a plane arrives more than two hours late at its destination, the insured must receive compensation. The smart contract then scans a database indicating the time of arrival of the planes and triggers a payment when a sufficient delay occurs.

However, it is possible to push the concept a little further with more complex tools. Thus was born The DAO, the first Decentralized Autonomous Organization to come to life on the Ethereum blockchain. It is, in fact, an autonomous group, without physical reality or legal form, which only exists through its presence on a blockchain.

A DAO can interact with the outside world by sealing smart contracts with third-party providers. If a DAO wants to launch into the production of boards, it suffices to sign a contract with a lumberjack to buy the raw material, a transporter, and a sawmill to transform it.

In three weeks, The DAO (despite its resounding failure afterward) thus raised around $ 150 million through an ICO of another form. This time around, the participants didn't receive cryptocurrency in exchange. But they received a token, giving the right to one vote in the votes organized by the DAO.

These tokens are then assimilated to the shares of a company and can be exchanged via the Ethereum blockchain. The operation as a whole can be seen as a "bastard" form of IPO. Except that here the shares are only tradable through a blockchain.

In Conclusion

ICO is increasingly attracting the curiosity of financial regulators around the world. And for a good reason. Currently, few nations have laid down clear rules for the management of ICOs. It results in a kind of far-west where the very serious is mixed with the most dubious initiatives. Therefore, as an investor, you should absolutely take a look at the ICO calendar, compare and scrutinize the project details before investing. Beware that scammers are not rare in this sector.

The regulatory authorities are now trying to get on the bandwagon. And put a legislative framework that is a little more reassuring for investors. In the meantime, some countries like South Korea have decided to ban this type of operation on their territory.

Cryptocurrency investment has grown substantially over the last five years, with 14% of Americans now holding digital assets in their portfolios, up from a reported 1% in 2016. Some industry leaders have predicted this figure could double by the end of 2021, after 13% of survey participants expressed intentions to purchase crypto over the next few months.

For many new investors joining the market, learning how to get the most out of your crypto assets is essential for reducing risk and maximizing any potential returns. Here are four useful tips to get you started.

1. Diversification

One of the easiest ways to reduce risk and, in some cases, help improve returns is by investing across a range of different crypto assets. This is known in the trading world as diversification, or asset allocation. The idea behind this is to spread your investments to average out losses if the market takes a downturn.

For example, Bob and Alice both invest $1,000 in cryptocurrencies. Bob decides to invest $100 across 10 different cryptocurrencies, while Alice decides to go all in on a single asset. Alice is running the risk that if the market turns bearish, and if the project she invested in takes a heavy hit, she could suffer heavy losses. Bob, on the other hand, has spread his risk and stands a better chance of losing less overall (depending on whether he’s invested wisely or not). This can also work when the market rises.

A common strategy is to select different types of cryptocurrencies to ensure you benefit when one of the many sectors experiences a surge. Conversely, it also spreads risk in case there’s a dip in one or multiple sectors.

Here are just a handful of examples of different cryptocurrency types:

Store of value: bitcoin (BTC)Non-fungible tokens, or NFTs: CryptoPunksSmart contract technology: ether (ETH)DeFi: uniswap (UNI)Payment coins: litecoin (LTC)Privacy coins: monero (XMR)

It is worth noting that although diversification aims to reduce risk or loss, it also has the potential to reduce your return on investment.

2. Copy trading

Copy trading, as the name suggests, is a type of investment trading where you automatically copy the trades of a professional investor. Platforms like eToro, Coinmatics and 3Commas are all examples of platforms that allow you to do this.

The setup is simple:

Select a trader to follow based on factors such as previous performance, number of followers and overall risk score (how risky are the invested assets).Link your account to their movements.When they choose to buy or sell a crypto asset, your portfolio automatically does the same.

This is a completely hands-free way to trade cryptocurrency without needing to study and track the market yourself.

Once you have settled on a trader (or traders), you can determine how much of your portfolio to allocate to each trader. Typically, this is in the form of a percentage of your balance. So if you have a balance of $1,000 to be invested, you could allocate 10% of your portfolio to copy trade one trader and 10% to another. This is another example of diversification and helps to spread out your funds and build a balanced portfolio. After you have finalized your investments, the trades will automatically start happening. Of course, you can always change traders or add more funds if they are doing well.

Just because they’re professional traders doesn’t mean they get it right every time. You cannot predict the success of a trader or the future movements of crypto assets so it is crucial to set up a loss limit. This is an automatic order that automatically stops your copy trading if you lose a predetermined amount or the value of an asset drops.

3. DeFi staking

This is where things start to get a bit more technical.

DeFi staking is a way of locking up your crypto assets in special, autonomous platforms known as “decentralized applications” in order to receive annual interest.

DeFi – or decentralized finance – is a sector of the cryptocurrency industry that takes traditional financial services like loans and insurance and puts them on the blockchain. The main difference being, the decentralized financial applications these services run on are not controlled or maintained by any single company. Instead, they are managed completely by their own communities of users and through automatically executing computer programs known as “smart contracts.”

Check out these articles if you’re unfamiliar with decentralized applications and smart contracts.

DeFi staking is a great way of generating an annual return on your deposited assets if you only plan on buying cryptocurrencies and holding them. The process is similar in nature to depositing money into a savings bank account except instead of earning less than 1% interest, you can typically earn anywhere between 5%-25% and in some cases, higher.

It is worth noting, however, that not all cryptocurrencies can be staked. A full list of supported staking assets can be found here. There are also some other risks to be aware of when dealing with DeFi platforms. These include:

DeFi platforms are not regulated. This means there are no consumer protections in place in the event you lose your capital from theft or fraud.A number of DeFi platforms have not had their computer code audited by a third party to ensure there aren’t any bugs or exploitable flaws. This leaves the platforms vulnerable to hacks and exploits. So far in 2021, $361 million has already been stolen from DeFi applications.

It’s recommended anyone looking to lock away funds in a DeFi staking application should perform his or her own rigorous due diligence beforehand.

4. Learn to hedge crypto tradesWhat is hedging?

Hedging is a type of investment strategy aimed at reducing potential risk and losses incurred during adverse price movements in the market. It involves placing a primary trade in the direction you expect the market to go and then placing a second trade in the opposite direction. The idea here is, if the market goes against you the second backup trade you’ve placed will be in profit and offset the losses of your first trade.

A popular way crypto investors hedge their trades is by going long or short in the futures market. This is where two parties agree to trade a specific asset at a predetermined price and date.

Going long: Where you think the price of an asset will rise so you agree to purchase it at today’s price at a predetermined time in the future.Going short: Where you think the price of an asset will fall so you agree to sell it at today’s price at a predetermined time in the future.

It’s important to know that trading futures is highly risky and should not be attempted by inexperienced traders. While it has unlimited upside potential (meaning there’s no cap on how much you can make), it also has unlimited downside potential. This means in some instances you can end up having to owe an exchange more than you initially invested. Stop-loss orders are advised to reduce risk when trading any asset. These automatically exit you out of a trade when the market price reaches a predetermined level.

Why would you hedge your crypto investments?

The crypto market is renowned for being highly volatile. This means the price of cryptocurrencies can change dramatically over a defined period of time. Bitcoin, for example, rose 125% between Jan. 1 to April 15, 2021, only to fall by 54% a few months later. Since the dip, prices are now up around 59%.

This unpredictability makes it incredibly difficult to know which direction the market will turn at any moment, meaning there’s a good chance the crypto assets you invest in won’t always go the way you want them to. Hedging provides peace of mind that whichever way the markets move, any losses suffered won’t be as severe.

The cryptocurrency space is constantly adapting and growing, providing ample opportunity to maximize your investments. These strategies are just a handful of ways to successfully stretch your funds and give you the greatest potential for a high return on investment based on the level of risk you are willing to tolerate. But it is also key to remember the golden rule for investing: If you are worried about the risk to your position, closing it or reducing its size is a safer option. And remember: Always invest and trade an amount you can afford to lose.

This content is for informational purposes only and should not be construed as investment advice. Nothing mentioned in this article constitutes any type of solicitation, recommendation, offer or endorsement to buy and sell any crypto asset. Trading in any financial market involves risk and can result in loss of funds. Before investing any money, one should always conduct thorough research and seek professional advice.

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