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I know someone who went from $50,000 to $600,000 in 9 months.
I know another who lost six figures.
Both were normal people and new to crypto.
Maybe crypto is new for you — it was for me a year ago.
Since that time, I’ve spent more than 1,000 hours learning about crypto. I’ve listened to hundreds of podcasts, read project documentation, studied the economics, written crypto profiles, and spent way too much time on Twitter.
Currently, I’m blessed that my portfolio is near all-time highs and I’m up 600% from my initial investment.
But it wasn’t always this way. During last year’s crash, my portfolio was thousands of dollars in the red.
Here’s the advice I wish someone told me when I started.
If you want to make money in crypto, you need to understand why crypto is so revolutionary.
If you don’t know why crypto is special, then you risk:
Trust me — you don’t want to be the guy who sold 10,000 bitcoin to purchase two pizzas in 2010. Yikes — that bitcoin is worth $350+ million now!
So, why is crypto revolutionary?
It’s like this:
That’s the summary. To learn more about this revolution, I recommend the following:
TAKEAWAY: You need to understand why crypto is revolutionary: openly and easily send value all around the world. To better understand this societal revolution, start with this video about blockchain technology and then read the whitepapers for Bitcoin, Ethereum, and Terra.
PS — if the whitepapers are too difficult to read, forget it. Try just reading this DeFi Puma profile of Terra. It’s the best 0–1 reading for normal people to understand the value of crypto and Terra’s LUNA token.
“The internet allowed any two entities to exchange data in a frictionless way.. the blockchain [is] simply changing one word: any entity exchanging value with any other entities in a frictionless way”— Ken Seiff, Managing Partner at Blockchange Ventures on The Pomp Podcast
Martin Luther led the Protestant Reformation.
Gandhi led India’s campaign for independence.
George Washington and Benjamin Franklin led the American Revolution.
It’s the same with crypto.
All revolutions needed trusted leaders who help the common man jump onboard.
You need trusted sources to know what’s happening and make money. For better or worse (oh hi, Elon), the primary communication platform for crypto is Twitter (or “Crypto Twitter” as it’s often called).
Here are eleven top people to follow on crypto Twitter (listed alphabetically):
If you’re interested, I’ve put together a longer list of the best sources to follow on crypto Twitter along with their strengths and biases/blindspots.
Takeaway: You can’t know it all. So, find and follow trusted sources on Twitter and be aware of their biases/blindspots.
You need a way to convert your cash into crypto.
Unless you want to go to a Bitcoin ATM (yes, they exist , albeit with terrible fees often north of six percent… 700+ locations in USA!), you’ll need to go to an exchange.
So, what matters when you pick a crypto exchange?
Based on these criteria, the best US crypto exchanges are arguably:
IMPORTANT: make sure you use the pro versions of these exchanges to save 50% or more on fees. For example, Coinbase doesn’t list standard trading fees but a $1,000 of BTC right now would incur a fee of $14.68 (~1.4%). However, Coinbase Pro does list standard fees and the fee for the same trade is currently $6 (or less, depending on trade type & volume). The difference between Kraken Pro fees and Kraken is even larger — 0.2% vs 1.5% instant buys on Kraken!
So, how do you use one of these pro apps?
Here are the links to the pro apps:
All three of these exchanges charge relatively low fees, offer solid options, are US-based, and easy to use.
Finally — it’s worth noting that Coinbase Pro charges higher fees than FTX.us Pro or Kraken Pro. But, the fees are all still between .08–.60% for all crypto deposits and withdrawals. If you’re interested, I’ve posted a full breakdown of the fees.
TLDR: create an account with a major, US-based crypto exchange to securely buy your first crypto. Kraken, Coinbase, and FTX.us are the best options. Use the pro version of the apps for the lowest fees.
Ever visited an amusement park? It’s similar to crypto in that it’s a good idea to start with smoother, less scary rides for three reasons:
Crypto works the same way. Don’t start with some crazy coin that’s solving climate change by decentralizing lithium mining in the Bolivian jungle (I also recommend avoiding universal pet income tokens.)
Instead, start with large, blue-chip assets. Your likelihood of a 90% price drop is far lower — but doubling your money within the next 18 months is still very possible.
More or less in the following order, the top blue-chip crypto assets are:
All of these are:
These assets let you start learning and ease you into crypto’s volatility; without getting you too sick or “rekt.”
TLDR: start with blue-chip assets that are less risky and volatile. You can invest in smaller projects later.
Bonus — if you can’t help yourself and want smaller projects with more possible upside, I’ve found two favorites:
I remember the first time I sent several thousand dollars off Coinbase to my own, self-custodial wallet.
No clunky banking portals, business hours, or three-day wait — just thousands of dollars transferred in seconds.
Magical.
Unfortunately, many people leave their assets in Coinbase and miss this magic. Don’t be like them. Take your crypto off exchanges so you can:
So, how do you take self-custody?
Start with an XDEFI wallet because it supports multiple crypto networks (Bitcoin, Ethereum, Terra, Avalanche, et al.).
Two final notes on self-custody:
That’s it — you’re now free to explore the frontier of internet finance.
Takeaway: get off the exchanges and take self-custody. This lets you invest in projects earlier and better understand crypto as a user. XDEFI & Keplr are great starter wallets; consider using a Ledger hardware wallet if you’re investing $1,000+.
The best way to understand crypto is to start playing with it.
Let’s start with some basic definitions:
If you have questions about these terms or need other terms defined, CoinMarketCap.com keeps an amazing glossary of crypto terms.
Here’s a suggested bucket list to get you started:
NOTE: you can buy BTC instead of ETH to reduce transaction fees. However, BTC transactions take a little longer to settle (5–15 mins per transaction).
Takeaway: You need to use crypto to understand it. A great way to start using crypto is to buy ETH on Kraken Pro, send it to your XDEFI wallet, make a cross-chain swap for LUNA via THORswap, and then start playing in the Terra ecosystem on Luart, Astroport, Anchor Protocol, and Terra Station.
I know several people who collectively lost about $15,000 last year to a scam that occurred during the Aurory Project launch.
I was one of those people and I personally lost about $6,000.
In hindsight, it looked obvious. But, in the moment, I was new to NFTs and distracted by my day job.
Here’s what happened…
For starters, to clarify, Aurory Project is not a scam and the scam was not their fault. Aurory Project is actually an amazing gaming studio that’s building play-to-earn games (similar to Axie Infinity)and NFTs on the Solana blockchain.
However, when the Aurory Project launched, thousands of people were waiting together in a Discord channel. Unfortunately, there were scammers there as well. When the project went live, everyone rushed to buy an NFT before they sold out.
The scammer pounced by…
2. Telling people the Aurory site crashed due to heavy traffic.
3. Directing people to a “mirror site” where he said they could mint the NFTs.
4. Using a nefarious transaction to drain all the assets from user wallets.
It was well-executed: the scam website looked exactly like the real site. And the thief was very successful: the real Aurory Project only raised $1 million in NFT sales. But the scammer? Nearly $12 million!
Here are some takeaways for crypto safety:
Takeaway: Crypto scams are common. I fell for a scam when I was new to NFTs. Make sure any app you use is referred by trusted sources, you’re on the correct website, not keeping lots of money in your everyday wallet, and never give your seed phrases to anyone.
Last May, the crypto markets dipped hard and fast.
In what was later called “The Crashening,” ETH dropped roughly 40% in only a few days. Smaller projects, like LUNA, saw their prices plummet even more.
Unfortunately, many new investors were using leverage — including one of my friends.
My friend was borrowing funds through Anchor Protocol and posted his LUNA as collateral. He wasn’t doing anything crazy risky — or so he thought.
When the crypto markets crashed, so did the price of LUNA. This meant that his loan was no longer sufficiently collateralized and Anchor Protocol liquidated his assets to pay back the loan on his behalf.
The result? He lost all of his 4,000 LUNA.
LUNA’s price has since recovered. After hitting low points under $4 last summer, LUNA recently reached an all-time high of $119. If my friend hadn’t used leverage, his LUNA would be worth about $400,000 right now.
A few key takeaways on leverage:
“If you remain confident [in the markets]… unwind leverage early, cash out tax obligations when incurred, but for the love of god, do not try to time the top.” — Ryan Selkis, CEO of Messari in Crypto Theses for 2022
Takeaway: using leverage is typically riskier & costlier than you think. Make sure you have money set aside for taxes.
Bonus —It’s possible that you, like many other investors, are paying too much in taxes because you aren’t properly discounting your gains with your losses. However, taxes in crypto are a pain. This is not tax advice and you may want to consult with professionals like CryptoTrader.Tax.
Last May, I successfully used MVRV & NUPL ratios to note that ETH was hitting a cautious stage in the bull run. ETH crashed a few days later.
Does this mean we can time the markets?
No, we can’t perfectly time the market. But we can approximate broad market trends.
For example, one of the ratios I use is called Net Unrealized Profit/Loss (NUPL). This metric gives you the average profit/loss ratio of every coin if it was sold right now at the current price. For example, if ETH’s current NUPL ratio is .70, then investors would, on average, realize a 70% profit if they sold their ETH at the current price.
To summarize, NUPL essentially tells us the average profit/loss status across millions of investors in realtime. Historically, a NUPL ratio of 0.75 or higher is is followed by a sizable correction in the following weeks.
So, why do broad market trends and NUPL matter?
Here’s why: if you can approximate the broad market trends, then you can approximate the timing of your buying and selling.
In other word, you can gradually sell into market strength and gradually buy into market weakness.
Speaking on The Pomp Podcast, bitcoin analyst Will Clemente put it like this:
“[The whales] don’t perfectly time the tops or bottoms — they don’t perfectly buy the bottom of the bear market and they don’t perfectly time the top of the bull market. They kind of scale into the bear market and scale out of the bull market.”
Takeaway: you can’t perfectly time the markets but you can approximate broad trends with metrics like NUPL and MVRV. These metrics gauge the current profit-taking pressure on the psyche of investors at-large. It’s best to sell into strength and buy into weakness.
PS — Glassnode is the best place to find tons of charts and on-chain data for BTC, ETH, and other major crypto assets. You can signup here.
Crypto is “rekting” people and minting millionaires. If you’re new to making money in crypto, here are ten steps to get you started:
A little over one year ago, I was new to crypto. Now, I’ve made more money my last annual salary and I absolutely love the crypto revolution.
With that said, exercise caution. As Ryan Sean Adams says at the end of every Bankless show:
“Of course, none of this is financial advice — crypto is risky, you could lose what you invest… it’s not for everyone. But we are headed west.”
Ready to start your journey into the crypto frontier?
Finally — as they say in crypto Twitter: “Welcome fren.”
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