How to get started with Crypto

“without a lot of jargon, just tell me the basics to get started…”

That’s not the first time someone asked me about how to get into crypto, but I think I never managed to round up a good answer. Mind you, I’m not a crypto expert or even a good trader of any sort. All I’ve ever done is spending some good hours learning and practicing, but I still feel I’m barely scratching the surface. This is my latest attempt to give a better answer than I used to, which means there’s a good chance that this will further evolve from here.

There are 3 key areas:

1. What to trade — Fundamentals: asset class and instruments (coins, ICOs, projects, forks)
2. Where to trade — Platforms: where to trade: wallets and exchanges
3. How to trade — Trading: buying, selling, charting, et al

One can dive as deep as they choose into each of these areas, but it is important to know some basics across all 3 areas before getting into serious transactions.

1. Fundamentals

Be it a life long investment or a bit of a hobby, it is worth knowing what you are getting into. The same rule probably applies across all investments/trades, but especially in cryptocurrency trading, it is important to understand the basic principles beyond the mere hype you encounter in social media.

As Investopedia defines it,

cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology — a distributed ledger enforced by a disparate network of computers.

For a beginner, there are few things to note here:

• there are little or no regulations, so one can lose investments easily. This would vary wildly depending on where you trade, but more on that later.
• transactions are often not reversible.
• particular cryptocurrency may or may not have any underlying value (organization, project or team)

It’s worth getting to know the coin you want to trade. CoinMarketCap & Coindesk are two sources I’d start with, but you will need other, more specific sources for a deeper dive. Most coins/projects will have one (or more) websites detailing their inception, project roadmap and milestones. Traders can subscribe to news and updates, and use such information to trade.

Eg. POWR

Power Ledger coin. You can get to know some basic details about Power Ledger on CoinMarketCap, but their official website has a lot more details about the project.

2. Platforms — wallets and exchanges

If you’ve heard about stock trading, you may know of some well-known exchanges like the ASX (Australian Stock Exchange) and NYSE (New York Stock Exchange). Often, retail traders like myself will go through a ‘broker’, a regulated entity that will act as an intermediary between the trader and the exchange. For instance, you can trade on ASX via the broker CommSec, the online stockbroking firm operated by the Commonwealth Bank of Australia.

When it comes to crypto, you can directly create an account with an exchange and start trading. There are hundreds of crypto exchanges to choose from, and they all will look and function slightly differently to each other. Picking an exchange depends on a number of factors. The main factors to consider are the coins you want to trade and the location.

Which coins — not all coins are traded in all exchanges, to begin with. So if you’re really keen on trading a specific coin, you have to check which exchanges have this coin listed.

Eg. Some of the well known global exchanges that list a lot are:

• Binance
• Coinbase
• Bitfinex
• Huobi
• Kraken

Trading location — the place you trade, physically or virtually, will have tax and regulatory implications.

Eg. If you are in Australia, you can choose a regulated local exchange, such as:

• Coinspot
• BTC Markets
• Independent Reserve

If you are buying crypto to hold long-term, you may choose to keep them in a secure location. Similar to a traditional wallet that holds money, a ‘digital wallet’ is a place to keep your cryptocurrencies.

3. Trading

Even if you do not intend to trade frequently, you will need to know some basic concepts to buy/sell cryptocurrencies on an exchange. Trading concepts are largely similar across different asset classes traded in exchanges, like stocks or forex. So if you are familiar with trading stocks, you will easily understand how to trade in a crypto exchange.

Some basic knowledge on this can help you in buying and selling crypto in minutes. However, there is a lot to learn about technical analysis & charting that would be beneficial if you are a serious trader. The bonus is that once you learn technical analysis in-depth, you will be able to apply these in trading stocks as well. I particularly liked this article on stock trading, which is pretty handy to learn the key trading concepts.

Best of luck with your crypto journey!

Disclaimer: This article is provided for informational or educational purposes only and is not any form of individualized advice. All information is obtained from sources believed to be reliable but cannot be guaranteed for accuracy or completeness. Use this information at your own risk.