So you started reading this article because you either have little to no clue about crypto overall and want to know what you should do, or you have decent experience and clicked here to see what my opinions are.
I like to divide anything that has to do with this beautiful industry in three levels: “buy and hold”, “trade” and “create”, basically. But before you continue reading, you have to ask yourself the question: “what are my goals? what do I want to make out of this?”. Once that’s answered, you will be able to better understand these three levels.
Layer 1: “buy and hold”
This is the most basic of all levels. In other words, you are not planning to make it in crypto, but you just want to experiment/store some of your money/diversify your portfolio a bit. Your responsibilities here are:
- In first place, to keep track of financial markets in general, and getting some sort of idea of what’s the sentiment in all markets, since crypto is usually not too different from traditional markets (TradFi) in this sense. This will eventually make you not buy in moments of euphoria/sell in moments of fear.
- This leads me to the next point, which is managing risk (since not buying high/selling low may not work). The easiest rule here to respect here probably is: “don’t invest what you can’t afford to lose entirely”. And you rather don’t take this as a joke, as you’re likely one single step away from losing it all.
And sometimes this step can be hidden, the amount of people that have held funds on FTX/Celsius/BlockFi/Voyager (and the list goes on) is really big. Now in hindsight it may be easy to say “yeah don’t lend your funds for a 15% APY” but a year back this was nowhere near obvious.
As a beginner, you may say to me: “but I want to make more money!”. No, your goal at this stage is not to make money, it is to survive. It is to preserve capital as best as you can and learn along the way. This part is for me the most important of the entire article, so I’d suggest you to reread this in the future, as you may learn this the hard way.
- This one is going to be really specific, but please avoid paid groups, signals and whatever leads you to take any uneducated decisions. There’s really a lot of bad advice out there.
- Finally, knowing how to use self-custody services (wallets) and exchanges. Get familiarised with these to move money around.
This is all what concerns your responsibilities. Now I will comment a few lessons that I have picked up since I started my journey:
- At this stage you’re learning market mechanics and trying to make some money on the side. So please don’t mess around with alts. I don’t do it myself because of the, sometimes exclusive, commitment you need to give them.
> And if for some reason you don’t want to follow that rule, make sure you don’t use leverage and don’t marry your bags. In both scenarios you’re likely to go bust, in fact, most of my drawdowns come from bad leverage use.
Do note though I’m not against leverage, but for you as a beginner, I’d rather stay away for now
- Tend to avoid watching your holdings too much. Again, you’re just in the “buy and hold” phase, so just check in once every few weeks or so. There’s no need to watch your bags go up and down every day or you’ll get greedy/fearful at some point.
Layer 2: “trade”
At this level you start to like and understand how markets work and decide to increase your commitment to trading (or whatever you like the most). You’re motivated enough to make some more decent money as opposed to just playing around. Your next steps would be:
- To acquire more knowledge about how markets tend to move: I’d say generally by using TA but can also be fundamentals. Depending on how you want to focus your edge, you will need to use different concepts and tools. It’s clearly not the same thing to trade alts based on narratives/news than to trade BTC on the higher timeframes.
- To network. I’m willing to cover this more in-depth with my own experiences but in short, it’s way harder to grow on Twitter when you don’t have friends on Discord already. So the starting order is first Discord, and then Twitter (you can do both in parallel but that would take you more time).
It’s also important to know well who you’re following. If in Layer 1 you don’t really care about who matters more than who, here choosing properly can make a big difference especially to avoid additional drawdowns in bear
- To increase screen time in whatever you’re specialising in. Let’s say you want to trade the 4h chart on BTC because that suits your personal routine. Then, unlike in stage 1, you want to dedicate all or most of your time to watch the 4h chart. Or let’s say you want to become an on-chain researcher, then use your network in your favour to track as many relevant datapoints.
Don’t forget you’re still in learning phase, you will probably make some money and lose some as well, especially if you’re following this entire process in bear market and not in bull. In bull everything goes faster but the odds you roundtrip your profits are also higher.
Layer 3: “create”
The third and final layer of the crypto space is to give back to this rather small community and build a product or create content. This stage is the most rewarding of them all (in my opinion), but, for the sake of making money some people get here without having the genuine passion to make this flawed industry better. Below are a few tips that have been useful over time to grow my friend group.
- Understand the depths of CT: in the end we’re all humans and we all shitpost and try to be fun. Knowing when to be off-topic and make friends along the way can be sometimes even better than knowing when to be on-topic (although not always).
- Build something with a real use case, don’t call “building” making a plain and simple NFT collection (I may get complains for this one) or selling whatever rug you can think about.
- Don’t sell yourself. We all have a price, just don’t find yours. I mean, if you’re in this phase and you really care about the space, let this be the reality. There’s really no need, as money usually is a byproduct of being successful at whatever you’re doing.
After reading the entirety of this article, you may now know how your average journey in the crypto space looks like, and if you are a complete beginner, you now know where to start.
And by the way, even if bull market looks more exciting, I said before there are higher odds that you donate back everything you made (and maybe even more). So I’d rather go slower but steadier
I also have a video version of this article, which comes with other 9 videos addressed to beginners about the points explained in the first section.
And one last thing: follow me on Medium if you haven’t yet and applaud this story so it can reach a wider audience. Thanks for reading!