• Saturday, July 13, 2024
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Nigerian Millennial who built $2000 crypto-portfolio in one year shares lessons

Nigerian Millennial who built $2000 crypto-portfolio in one year shares lessons

In the next decade many young people who will inherit wealth from the older generations will have to decide where to invest some of their fortune. One 25-year old who started his crypto-investing journey a year ago with just $40 tips Cryptocurrencies for good returns.

Edward (not real name), our millennial crypto-enthusiast, made his first investment in EOS and it grew nine-folds in two months. Since that time, he has put money into other types of crytpos with Bitcoin, Zedcash, Ethereum, and Litecoin as his largest holdings although Wanchain is his personal favourite cash-spinner for now.

If all these names are flying at you do not panic because the very first step to becoming successful at investing in Cryptocurrencies is researching.

Education first, invest in knowledge

Edward says hundreds of hours spent reading books on Cryptocurrencies, watching Youtube videos and discussing with people who have a “skin in the game” is a good first step.

“Warren Buffet advises against investing in businesses you do not understand,” Edward said. “Even if you’d have someone manage your investment, understand the market yourself.”

The 25-year old investor listens frequently to Cryptolak and Michael Novogratz and has Chris Ani, C.E.O. CryptoHub, and Gaius Chibueze, C.E.O, abitttrade, as mentors.

Read also: How Libra, regulation could push cryptocurrency market into maturity in 2020

No Quick Money-buy for belief not money

Design-thinking, which is a mental picture of you want to do and a long-term strategy, is the next thing you should work on according to Edwards.

“You should not invest in Cryptos for the money,” he says. “Invest in the technology and the potential. Invest in your belief.”

According to Edward, investing for money would make one jumpy. It would set one up to lose out on the long-term benefit of investing in Cryptos, which in the future would have greater acceptability, and its underlying technology-Blockchain-which is a revolutionary technology with positive future prospects.

Invest in coins that solve problems

Similar to the previous point, the $2000 crypto-rich investor says the choice of the cryptocurrency is important because some coins do not have long-term value while others are strategically positioned for long-term value delivery.

“Different coins that play different roles in market,” Edward said. “Bitcoin, Altcoins and Tokens have distinctions that can be useful when you are investing.”

Edward however says one should not put all of one’s eggs in a basket-of course, after studying tokens that do well.

Bloody market is good entry

Don’t go into the market when it is all green. You just may get burnt if you join the market just because it is gaining, Edward warns. “The market might just be at its peak.”

Instead, investors should enter when the market is declining especially when you are sure it is close to its bottom (i.e won’t decline further).

Like other assets, you should buy low and sell high to make profit, he said.

Don’t be overly optimistic-stop loss

That you’re investing in Cryptos shows you have a higher risk-tolerance than someone investing in many other asset classes but you should always set a limit for the loss you can tolerate rather than let your portfolio enter a free-fall mode in a bear market.

A stop-loss is an order you place for a certain price below which you would sell-off a poorly performing asset.

You can count on Cryptos

In Nigeria the stock market has been disappointing year-long. With the recent decline in treasury bills rate, restriction from high-yielding OMO bills, and lower bonds yields, alternative investments and asset-classes are options being explored by investors.

Bitcoin, the most popular cryptocurrency, has jumped about 47 percent-even though it has been coasting down since its June year-high of almost $13,000.