I’m “the crypto guy” and the “market guy,” so, naturally when my friends and viewers have questions, they hit me up.
But even after everything that’s happened, I still come across a lot of misconceptions – crypto’s dangerous, it’s just for gangsters, you can only buy and hold it, you have to rely on dumb luck… just a ton of mistaken ideas people are hanging onto right now.
So I gently remind these folks that I not only own crypto for the long haul, but that I trade it just about every week. I’m very protective of my capital, whether it’s going to trade stocks or crypto. When I run the numbers, I like to see an 85% or 90% chance of a win before I commit a single nickel.
And I don’t leave my transaction security to chance, either. When I trade, I have to be able to have complete trust in the platform and the market, otherwise I wouldn’t touch it with a 10-foot pole.
I started mining Bitcoin in my spare bedroom in 2013, and I’ve been trading crypto in front of audiences since 2018 – with a winning track record, too, of 154 double- and triple-digit winners. Just a couple of weeks ago I put $100,000 into Bitcoin (BTC) and Ether (ETH) in front of a huge audience.
In fact, my AICI colleague Nick Black is hosting me this Thursday for another crypto trading event (I’d love it if you could join us), so you know I have to be confident it’s safe and secure.
Before you come, though, I want to share a couple of things I’ve learned about crypto trading and security…
Regulation’s Not a Dirty Word
The “R-word” gets a bad rap in come circles, but when it comes to cryptocurrency, it’s a must.
Now, nothing will ever eliminate all risk – nothing ventured, nothing gained after all. But it’s laws and regulations that help keep that risk where it belongs: strictly in the market.
You want to be able to have complete confidence that the exchange you’re trading on won’t up and take all your money, or put their thumb on the scale. You want to know your counterparty isn’t some criminal. That’s why I always recommend trading on U.S.-banked exchanges – they have to have the same “Know Your Customer” practices as any bank. If you trade on an exchange banked in, say, the Cayman Islands, there’s just no telling.
A lot of the crypto businesses that failed this year did so because they were playing with other people’s money, taking stupid risks with it. Their practices were opaque. I didn’t go anywhere near them, but situations like this wouldn’t happen if there were clear regulations in place. The exchanges that have been successful have been transparent and have taken steps above and beyond what’s currently required by law.
They’re extremely well capitalized, so I feel very safe trading in these venues. The sooner there are comprehensive rules in place, the safer it’ll be. It’s at that point that big institutions like JPMorgan Chase or Bank of America will move even further into crypto than they already are.
Assets are also beginning to be better regulated, which helps slash “external” risk. For example, if a company wants to raise money through an initial coin offer (ICO), they must disclose essential information about the project, its potential risks and who is behind the project.
The Federal Reserve has also established a group to monitor cryptocurrencies and their risks – which is directed at protecting consumers and investors from scams and fraudulent activity. That’s all well and good, but regulators with real teeth, like the SEC and Commodities Futures Trading Commission, are positioning themselves to oversee cryptocurrencies in some of the same ways they regulate stock markets and options exchanges.
There are still big questions to settle – one that came up recently is whether a proof-of-stake cryptocurrency is a security or a commodity – but the fact that these questions are on the table is an encouraging sign that things are moving from good to better.
Good crypto regulations will benefit us all, but that’s only a part of trading safely.
You Can Do a Lot to Keep Your Crypto Safe
Security starts with you. Taking responsibility, and just a few, easy commonsense steps, can help you lock down your crypto and make your trading safer.
A good wallet is essential. I keep most of my crypto in an offline “cold” wallet that’s under my control at all times. Of course, it’s tough to trade that way, so, once I’ve figured out how much I want to trade I take a predetermined portion of my crypto to keep on the exchange – protected by passwords and two-factor authentication (2FA).
When I’m portioning out my crypto for trading or purchases, I always make sure I’m sticking to the same strict position sizing I use when I’m trading stocks. I recommend you do the same, too – never put all your eggs in one basket or “bet the farm” on any one single crypto or trade. Never.
Regulation sets up the playing field for all of us, and choosing the right exchange, keeping your crypto safe, and using sensible position sizes are all things you can control, and you want to make sure you’ve got your bases covered.
Now, each week I share with readers what I’m doing to safely find success in trading and investing in crypto, but this week, is going to be something else.
I’m going to join my AICI colleague Nick Black in a couple of special live sessions to talk to everyone about how to trade cryptocurrency, and then I’m going to name five or six coins I’m looking to trade right now.