How to Buy Cryptocurrency Safely
A lot of you have noticed I’ve been getting more serious about bitcoin lately as a long-term investor. We’ve done videos on the channel in the past about quick trading around the price but ever since really analyzing the long-term potential a month ago, I’m seeing how bitcoin and cryptocurrencies NEED to be a part of every investor’s strategy.
We looked at two ways to value bitcoin and found the token could be worth from $94,000 to $190,000 each in the next couple of years. Last week, I showed you why I’m investing in Ethereum and why it could triple in the next year or two.
I’m putting all our cryptocurrency videos in a special playlist on the channel, a step-by-step to investing in cryptocurrencies.
But like most of you, I’ve always been hesitant about buying cryptocurrency because of all the hacking on the platforms, the scams you hear about…just that level of uncertainty around buying crypto.
So I wanted to make a video to help you buy cryptocurrencies safely, a step-by-step on how I invest, which platforms I use and how to earn interest on your cryptocurrencies while you invest. I’ll show you how to find the best cryptocurrency platform, exactly how to invest and how to NOT get scammed!
The video is in partnership with BlockFi, a crypto account for investors where you can earn up to 8.6% interest on your cryptocurrencies. No hidden fees, no minimum balance, just a high rate on your crypto. You also get no fee trading of Bitcoin, Ethereum, Litecoin and Stablecoins and can borrow up to half the value on your account at rates as low as 4.5%.
I opened my account a few weeks ago and am moving my bitcoin and Ethereum there because…well duh, who wouldn’t want to earn that extra return through the high-interest account. I’ll show you how to invest on BlockFi as well as another popular platform in this video. Look for the link in the description below though and you’ll get a bonus of up to $250 when you open an account.
#1 Rule: How to Avoid Scams
First here, and this is probably the most important part of the video, how not to get scammed when you’re buying cryptocurrencies.
Never, EVER transfer your crypto investments to someone you connected with on Whatsapp or outside the process I’ll share later in the video. Nation there is a huge problem on YouTube right now with people creating fake accounts that look like the channel, getting you to connect on Whatsapp and then stealing your money!
I spend half an hour every day deleting these scam comments but they just create new accounts. Use the links I’ll leave in the video description to buy cryptocurrency. Do NOT fall for the scams in the comment section on this channel or any other!
How Much You Need to Invest in Cryptocurrency
Before I show you how to find a crypto platform you can trust, How much should you invest in cryptocurrencies?
I recently got this question in our private Facebook group, Let’s Talk Money Together, someone asking if they should have 40% of their money in crypto and of course it got a wide range of answers, 53 in just the first two days.
The hardcore crypto believers said more, others said less and it’s a smart question we need to cover because with bitcoin jumping 600% in the last year I feel like a lot of investors out there have way too much riding on this.
Nation, you know I’m a believer in the long-term returns here and own crypto myself…but this is still an alternative asset. For every bitcoin bull like Ray Dalio with his price prediction of $85,000 or Scott Minerd that thinks it could go to $600,00 you’ve also got those that say it could be a worthless investment. Warren Buffett has even gone so far as call it rat poison squared!
Now I’m following the research by Ark Invest which believes the price of bitcoin could jump $200,000 just by the companies in the S&P 500 allocating 2.5% of their cash in the crypto, but this is still very much a highly risky and highly uncertain investment.
That means you don’t want to be betting your life’s savings all on bitcoin or other cryptos. Think about it this way, if you have just ten or fifteen-percent of your money in crypto…let’s say you’ve got $10,000 invested. Now if the worst case scenario happens, it falls to zero…then you’re not broken. It would be painful but its something you can move on from.
If on the other hand, the price of bitcoin hits another 600% year…even on that modest investment, you’ve made $60,000 and basically doubled your wealth even if all your other investments do nothing!
Here’s how I’m investing. I have about a fifth of my wealth reserved for higher risk investments like startups, penny stocks and crypto. That’s about 20% split across four types of investments so about 5% of my total wealth in each. With the rest of my money, I’m still earning solid returns in stocks and real estate and with these types of moon-shot investments, I get the chance to boost my returns without getting wiped out if one falls.
Choosing the Right Cryptocurrency Platform
But back to how to buy crypto, the question is how do you choose a cryptocurrency platform to trust?
For finding a platform to buy cryptocurrency, I look for three things; can I trust it, does it have the security in place to protect my money? Is it easy to use, can I set up an account and transfer money without a bunch of hoops to jump through?
One of the big draws to buying cryptocurrency is how easy it is. You don’t need your social security number or answer a lot of questions so any crypto platform that’s asking a bunch of questions…I gotta be skeptical.
Third here is just lower fees. You’ll find crypto platforms that want to charge upwards of 5% and more or they’ll have lots of hidden fees. The cryptocurrency platform I’ll show you next charges just 2% and is super easy to use.
Now I want to take you step-by-step to how I buy cryptocurrency, which platforms I use and how you can get started.
I use two apps to invest in cryptocurrency, Coinbase and BlockFi and will show you how to get started on each. Coinbase just filed to issue shares in an IPO valued at $68 billion and has top-level security so you know it’s absolutely safe. BlockFi is one of the few platforms headquartered in the U.S. and regulated by U.S. authorities and its investors are a who’s who of fintech institutions.
Earn up to $250 instantly when you open an account on BlockFi and invest in cryptocurrencies!
Buying cryptocurrency on Coinbase is surprisingly easy and it’s a great site for learning about crypto with these tutorials. They’ve even got a program where you’ll earn free crypto while you learn about some of the tokens.
Creating an account is actually easier than opening a stock investing account. You put in your name and email here, pick a password and set up your security verification with your phone number.
And that’s a big part of keeping your account safe here is this two-step verification. With this, whenever you go to buy or sell cryptocurrency, you’ll get a text message to your phone to confirm your identity to keep your account safe from hackers.
That’s all there is to setting up your account, no social security number, no other disclosures you would need with an investment account. Then to fund your account and start buying crypto, you just go to your settings and Payment methods.
Here you can link your bank account, make a wire transfer or use your debit card but I highly recommend you use this first option. With your linked bank account, you won’t have the same amount restrictions as with the other methods and the fee is much lower. Using your credit or debit card, the fee comes out to 4% which is way higher than funding from your bank account which is about 1.5 percent.
Coinbase uses Plaid to link to your account which helps make it safer with their encryption and cheaper. You can find your bank here in the drop-down or just enter it in search and I’ve got to tell you, I about fell off my chair when I saw the app recognized my tiny little community bank in Iowa!
Next You put in how much crypto you want to buy and which one, so I’ll do $2,500 in bitcoin as an example here and check the order preview. Coinbase is super-thorough in making sure you see exactly what you’re doing from how much crypto you’re buying and double-checking. I’m also going to buy $2,500 in Ethereum here and you’ll see your account update immediately with those totals.
Two Ways to Hold Your Cryptocurrency
Now there are two ways you can hold your cryptocurrency investments and this is something most investors don’t understand.
Your first option is what’s known as a hot wallet, or holding your crypto in an account online where it stays plugged into that blockchain, and while this is the riskier method I like using the hot wallet better and I’ll show you how to set it up and earn interest on your account but the alternative is called a cold wallet.
A cold wallet is where you have your crypto information stored on a flash drive offline, the user address and private key isn’t found online and so it’s safe from hackers. And so if you decide to store your crypto in a cold wallet, you’ll get one of these…well, not this but a small flash drive with your information. I actually can’t show you a real cold wallet because I don’t use it for my crypto…and it certainly wouldn’t be on a 10-year old piece of tech like my little eight-gig dinosaur here.
What I do is use BlockFi to earn interest on my crypto investments. You set up an account which takes all of half a minute then click deposit. You select the cryptocurrency you want to deposit, and this next part is HUGELY important.
Because cryptocurrencies don’t have your name on them, it’s just an account address, you have to be very careful with how you move your crypto around. You need to make sure you’re depositing the right currency and using the right wallet address.
So we’re going to copy this wallet address for bitcoin on BlockFi and I recommend copying it onto a notepad so you can double-check it. Then you go back to Coinbase and click this Send or Receive button.
And what you can do, you can try a small amount at first to make sure you have the right address before you move more of your crypto to your BlockFi account. So I’ll just move $66 here to test and put in that bitcoin wallet address I copied. Again, this is where you want to double-check that number.
I can name the transaction and review it to make sure everything looks good, and again, Coinbase is super thorough in making sure you know what’s going on…and that’s it, you’ll see your Coinbase account balance change immediately and it will take about half an hour to see the BlockFi transaction go through. Now I’ve got that bitcoin stored on BlockFi where it’s earning interest up to 8.6% annualized every day it’s in the wallet.
Earn interest up to 8.6% on your bitcoin and other cryptocurrency investments. Learn more here!
The whole process between buying cryptocurrency to storing it in your wallet takes less than half an hour. Don’t wait any longer on this, it’s an investment every investor needs as part of their portfolio and can be a big part of your returns!