How I Became a Crypto Convert

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Well, I’m officially a crypto convert!

I recently purchased a very small portion of Bitcoin, my first ever crypto asset. I had stayed away from Bitcoin and other cryptocurrencies in the past, basically because it was something I just didn’t understand.

This won’t be a post that tells you everything you want to (or should) know about investing in crypto. I’m no where near an expert, and don’t ask me to try to explain cryptocurrencies to you!

If you want to know more specifically about Bitcoin, see this explanation.

I’m not even trying to encourage you to invest in this! This will be more about my journey since I decided to start dipping my toe into the crypto waters, and I want to share that with you!

Why crypto?

So crypto is actually a currency that hasn’t reached a full adoption of being widely accepted as a “real” currency, but it’s getting there. Even though it’s hard to wrap my head around a digital currency, this currency does actually have a value.

Think of gold and silver. They’re not actually money or dollar bills, but they are assets that have a certain value, and could be used as an alternative form of currency. They are also popular assets to have in diversified portfolios as an inflation hedge. You can own these items physically or in digital form, like the ETF’s GLD and SLV.

Crypto is just another asset of value with which to diversify your portfolio.

How I got started investing in crypto

After reading some very detailed information from my friend (which you can read his post here), I decided that including this asset in my portfolio of investments would be beneficial.

My goal will be to get to 1% or 2% of my total portfolio, but I literally started with only a $50 investment and will build from there.

This is personal decision for me and my investments. I am NOT saying you should do exactly what I’ve done, but I hope it will give you something to consider.

Couldn’t you lose all your money?

The value of cryptos can vary so quickly and so wildly because they’re traded 24/7, which can make it nerve wracking. The value of Bitcoin in particular was around $5,000 at its low point in March 2020, and was about $28,000 by year end 2020. That’s a crazy increase!

So I purchased my first $50 worth of Bitcoin around its newest peak (I don’t try to time the market). Two days later, it lost 25% of its value… Oops. So what do you think I did?

I bought another $50 worth and went “Woohoo, discount!”.

My time in the market is better than trying to time the market, regardless of what I’m investing in. I believe in Bitcoin having a store of value that I’m willing to invest in so I’m not making a one-time investment, it will be ongoing.

And, come on, I only invested $50. I’d be okay if it lost all of its value because I can afford to lose $50. Even when I get my holdings up to 1% or 2% of my portfolio, it’ll still be an amount I’ll be okay losing, should that happen. The volatility isn’t going to cause me much stress when I keep that perspective in mind.

How do you buy crypto?

There are many ways to purchase Bitcoin or other cryptocurrencies. There are exchanges where you can purchase it, or you can purchase Bitcoin through CashApp, and I’ve heard the Robinhood brokerage firm allows for purchases. All of these have different fees and/or restrictions so do some research to find out what will work best for your goals.

I used an exchange called Coinbase. I chose this one for its lower fees, reputation for security, and the ability to move your currency into a “wallet” or other account where you can earn interest on your holdings, like you would a normal savings account. Once I have amassed a larger sum, I’ll either move the currency to a “wallet” or savings account.

Closing thoughts

I have to keep referring you to others who are actually more expert and knowledgeable about cryptocurrencies, but I hope you’re encouraged to do some research, like I did. Now that I am invested, even though it’s such a small amount, I find myself researching it more, and paying more attention to news regarding it.

Like with any investment, even if you start out small, you’ll be encouraged to learn more, track it, and you’ll become more knowledgeable, as well!

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