Cryptocurrency has skyrocketed to great acclaim over the last number of months, especially since the turn of the year. As I am sure is the case for many people, my interest was piqued during the recent social media ‘rebellion’ orchestrated by Reddit’s WallStreetBets which resulted in the dramatic escalation in value of stocks which Wall Street and investors at large previously had a low opinion of, such as GameStop and AMC, but to mention a few. Recent indications evidence that this social media rally appears to have shifted to cryptocurrency. This transition to mainstream has provoked me to get involved in cryptocurrency, albeit at a small level, both as a way of potentially generating some income, but also to educate myself on the virtual currency world, such is the probability of it playing an increasingly significant role in my life as the years go on.
Ideally, this blog will provide some useful insights and information that you can incorporate into your own experience, however, unfortunately that I cannot guarantee. If that does indeed fail however, hopefully I can provide you with some entertainment, albeit at my expense (literally).
Furthermore, one of the main reasonings for dipping my toe in this space was purely down to the fact that being a virtual currency, everything is done online, and thus, considering the fact that we are not exactly spoiled for choice with regards to what we cannot do currently, I feel as though this could be a productive way to occupy myself in these unprecedented times. Finally, having harnessed an interest in this, I soon realised that the internet is laden with webpages that are inundated with complex, crypto jargon, with very little coverage on cryptocurrencies for beginners.
Therefore, this blog post, in tandem with our other entries, is designed to provide information and impart knowledge in a simple, comprehendible manner, and whilst my eventual ROI may prove a deterring factor, hopefully the complexity of this blog, or any of our other posts, for that matter, will not put you off dabbling in the field yourself.
In this blog I will essentially be documenting an amateur cryptocurrency investor’s experience – discussing my starting Cryptocurrency portfolio, the reasons as to why I have opted to invest in these cryptocurrencies, as well as updating the progress/regress on a weekly basis as a form of experiment to see how great a return, if any, I can yield across the next number of months initially. For fear of total capitulation, I will be limiting my opening investment to €50, an amount that I am comfortable with losing, should this rendezvous prove to be a disaster in a few months’ time. I implore you to do likewise if you are a total beginner cryptocurrency investor like myself, such is the volatility of the crypto market, chances are there will be numerous bumps in the road along the way.
Dogecoin
Dogecoin was initially created back in 2013 as a parody cryptocurrency which, as the name suggests, revolves around dogs. Once the crypto went live, it quickly amassed a sizable following within the crypto community due to its low cost and unsurprisingly, its absurdity. Dogecoin has never taken itself seriously and has recently assumed a role as meme culture cryptocurrency, with a plethora of celebrity names backing the cryptocurrency on social media. Unsurprisingly, Snoop Dogg, not one to pass up such a PR opportunity, is one of such high-profile supporters of his namesake cryptocurrency. That said however, Elon Musk with all his influence, has undoubtedly had the most influence over the rise in prominence of this Shiba Inu themed virtual currency beyond the avid cryptocurrency community to the amateur cryptocurrency investor like myself.
What attracted me to Dogecoin? Well aside from it being unconditionally comical and centred around dogs, if Elon Musk tweets positively about it, that must mean something right? We have seen with the recent Wall Street Bets Reddit phenomenon in which companies such as AMC and GameStop, as well as ‘more mainstream’ cryptocurrencies such as Bitcoin increase substantially as a result of social media rallying behind the entities. This being, I cannot help but feel as though this cryptocurrency is primed for further potential explosions in value such is the comical nature of the cryptocurrency.
Bitcoin
As far as I am concerned, a beginner’s cryptocurrency experience could simply not be complete without the addition of Bitcoin to any portfolio. I cannot help but feel as though investing in cryptocurrency and abstaining from jumping on the Bitcoin bandwagon, if you will, is not only disadvantageous, but also fundamentally delusional. From the outside looking in, to me, Bitcoin and cryptocurrency investing cannot be mutually exclusive. Such has been the recent growth of Bitcoin, an astute investor may deem the current market to be an inflated one, but an astute investor I am most certainly not and so such is my fledgling state, I will be investing in the cryptocurrency powerhouse. Time will tell whether this proves a shrewd endeavour.
As has been mentioned in our 'Cryptocurrency for Dummies' 'Cryptocurrency for Dummies' post, Bitcoin is the largest and most popular cryptocurrency out there currently. Whilst knowledge of Bitcoin has become increasingly widespread, in plain terms Bitcoin was created in 2009 and follows the ideas set out in a whitepaper written by the pseudonym, Satoshi Nakamoto, whose identity is still yet unknown. Bitcoin is created, traded, and stored on a decentralised ledger system known as the Blockchain. The value of Bitcoin has recently reached a record high of just over $52,500 per Bitcoin. This overall rise in Bitcoin, now means that the virtual currency’s overall market value is approximately $950 billion!
Recently Tesla, spearheaded by the aforementioned Mr Musk, revealed that they purchased $1.5 billion worth of Bitcoin in January. This further supports the idea that Bitcoin, and cryptocurrency overall, is being incorporated further and further into the mainstream, and it has been suggested that some other firms will follow suit in securing significant quantities of cryptocurrencies, if they have not already done so. All these considered, I, as a cryptocurrency amateur, simply could not omit Bitcoin from my holdings.
XRP
My final inclusion is, admittedly, a bit of a wildcard, and whilst this may be considered ludicrous coming from a beginner but hear me out. XRP is the cryptocurrency created by Ripple, a Silicon Valley cryptocurrency start-up, who are currently engrossed in a lawsuit with the US Securities Exchange Commission (SEC). The suit related to the early distribution of XRP which the Commission believes that the supply and distribution of the cryptocurrency constituted a security offering rather than a virtual currency, whilst, according to opposition also operating an overtly centrally controlled in its founding days, with roughly 61 billion of the 100 billion pre-mined XRP being owned by Ripple personnel. This being, this seems like the perfect time to invest, right?
Well, essentially, from my admittedly limited research on the issue, the jury appears to be out (pardon the awful pun) on whether Ripple will lose the case and so, should the ruling go in the cryptocurrency’s favour, I would potentially expect a rise in its valuation in a rebounding scenario. Moreover, if the ‘Reddit effect’ or social media in general get behind XRP following a successful ruling as another vindication against corporations and institutions such as the SEC, this price could rise even more?
Breakdown of my investment
My initial €50 investment will assume the following breakdown:
Given the fact that Bitcoin seems to be the, dare I say it, ‘safest’ of the three currencies, I have invested a whopping €20 in it.
Investment: €20
Currency Acquired: 0.000512 BTC
As the minimum purchase amount on Binance is €15 for Dogecoin and XRP, I will be limiting my investment in these two currencies to that €15, such is their volatility and therefore, coinciding risk.
Investment: €15
Currency Acquired: 389.70 DOGE
Investment: €15
Currency Acquired: 38.128129 XRP
As was mentioned in 'How to Invest in Cryptocurrency' post, there is a myriad apps and platforms that you can use to invest in cryptocurrencies nowadays, however, I am opting to use Binance as there are minimal fees and they offer a much broader variety of currencies than those offered by competitors. Should you wish to join in on this experiment or conduct a similar one of your own, you can sign up for Binance here.
Conclusion
If, on the off chance, any experienced cryptocurrency investor stumbles upon this blog, firstly, I apologise for putting you through the above and secondly, please feel free to leave any advice, tips, or recommendations in the comment - it would be very much appreciated. Also, include the investments you personally have made down in the comments, so that I can copy your holdings when mine ultimately fail. I will update this blog again at the beginning of next week and will document how I faired in my first week as an amateur cryptocurrency investor.
As mentioned in the introduction to this post, I will initially be conducting this investing experiment hypothetically, i.e. I will not be investing any actual money into any of the cryptocurrencies in week one, as my account is currently pending verification by Binance.
As mentioned in the introduction to this post, and as with anything like this, ensure that you know your limits and are only investing an amount that you are comfortable with losing, and as the saying goes, “when the fun stops, stop”
Until then, wish me luck! See you on the moon!
