Only put in money that you can afford to lose completely. Crypto currencies are relatively new and a simple legislation change could make the price halve in a matter of minutes, an exchange could be hacked, or the exchange owner might disappear with all the assets.
Step 1 – Sign up at an exchange
The below are referral links that might give me a small tip or even both of us free BTC when you get around to depositing.
Binance is the main one that I use, and it is by far the cheapest. Customer service is hard to get hold of if you have a problem.
Coinbase is probably the easiest exchange to use, but has high fees, a poor selection of coins to invest in and the spread (difference between buying and selling) is very wide.
Kucoin is another alternative that has a diverse range of investment options.
Poloniex is a good alternative with a clean look about it.
Step 2 – Provide identification & set up 2FA
It’s all good signing up, and they might even let you deposit, but the exchange might not let you withdraw until you have provided your ID.
Ensure that you set up 2 Factor Authentication, which is usually done using the Google Authenticator application. Make sure you write down your recovery code and keep it somewhere very safe. What you put into your account now might seem like not much, but in 5 years you might be crying if you cannot login.
Step 3 – Deposit using card or Faster Payments
It might be tempting to just go for the easy option of buying crypto with a card, but this simple option comes with a 2% fee.
A Faster Payments deposit is free, perhaps send a smaller amount on your first transfer, and then a spot trade has 0.1% fee.
Step 4 – Use 50% of your deposit to buy the crypto that you are interested in
On the Binance menu, choose Trade > Convert, pick GBP from the top one, use half of what you have put in. Not putting all your eggs in one basket is a good idea. That goes for Exchanges too.
Step 5 – HODL (Hold On for Dear Life)
Waiting can yield some impressive gains, so do it.
Step 6 – BTD (Buy The Dip).
Warning: If it is just your coin that is plummeting you need to question whether this is a dip or a bad investment.
When there is a large dip, it’s time to spend some of that money that you have been holding back. Use 10% of what you have left every time there’s a strong dip. If it keeps going down, wait a week and buy some more! If you run out of money, you are back to step 5.
I have about 50% Bitcoin (BTC), 25% Ethereum (ETH) and then lots of other “gambles” on smaller coins either because I like the prospects, or because there is a current buzz (but get out quick on these).
On my smaller coins, I tend to sell 50% of a coin when the price doubles. I like having the feeling that I’ve effectively got them for free.
After 1 month of my initial investment I was more than 50% down. This lasted a long time and I stopped looking at it. 2 years later my investment was 2x. Another year and it was over 5x (before the crash in 2017). In Feb 2021, I withdrew 3x what I had invested over the years and still have well over 10x what I invested.
https://coinmarketcap.com/ – the best resource for coin information.
https://www.cryptocompare.com/ – a good resource for coin information.
https://www.blockchaincenter.net/bitcoin-rainbow-chart/ – Bitcoin rainbow price chart.
https://alternative.me/crypto/fear-and-greed-index/ – Crypto fear and greed index.