THE CRYPTOCURRENCY INVESTING MINDSET
Cryptocurrency is thought of as an investment to some, a quick way to be a millionaire to others, and hocus pocus to the rest...
Although, when most people think about investing in Cryptocurrency, the original intention and purpose of creation gets buried a little.
Why Cryptocurrency Started In The First Place
While we could start with Bitgold, Digicash and a few other original Cryptocurrencies, let’s start with the one that truly paved the way…
Bitcoin was founded by Satoshi Nakamoto with the mission of establishing a global decentralized currency.
Now, it wasn’t intended to be a property or piece of value that increasingly moves upwards like it does today, but something that you spend on a coffee, car, or yacht.
That’s what currency is, not something that we hoard hoping to increase in value, but something we actively use.
Yet that’s not what is happening today and it is also not the way that we need to think about it in order to establish the correct mindset to create financial freedom.
Cryptocurrency should be thought as something to use, hold value, exchange value, and subsequently gain financial freedom.
How To Approach A Cryptocurrency Investing Mindset
Start with financial freedom.
Typically when an economy starts by having $1 you aren’t hedging your bets on becoming a millionaire, unless there is a finite resource it is linked to.
In this case, you are investing in only 21 million Bitcoin (or another fixed amount, if you are using another cryptocurrency) and as more people buy into it, the value increases.
Essentially, you get rewarded for being an early adopter, as most people do when something blows up like Apple stock at IPO.
Although, when you peruse the cryptocurrency space, you’ll see people saying “This coin is mooning” or “Get ready to buy Lambo’s.”
This is not how to approach investing in Cryptocurrency.
Not day trading on arbitrage, but investing for the future.
Yes there is opportunity to make quick money and help you get out of debt using something like TA from Node Investor, but be prepared to face typical day trading cons.
You’ll need to spend hours in market research, and then day trading is both stressful and time consuming itself.
On the other hand, following an investment approach like Warren Buffett/Charlie Munger is beneficial to both time and money.
(In the next section we will jump into that.)
For now, realize that Cryptocurrency is a functional investment.
While you can buy it, trade it for arbitrage, and hold it for the long term, you can also use it day to day to purchase common goods.
We don’t want you to activate a scarcity mindset and be scared to touch or use the currency that you are accumulating.
When you go to a foreign country you don’t hold onto their currency in hopes of it increasing, but you use it.
Live today and plan for the future.
Trading And Investing In Cryptocurrency Like Warren Buffet
Well this could be a complete guide to investing in cryptocurrency and truly mastering it, let’s talk about the mindset related to investing.
- Don’t Attach Emotions
- Do Your Research (Or Use The Premium Report here)
- Hold Until It Reaches Your Evaluation
- Be Aware of Fees
- Only Hold Up To 20 Cryptocurrencies
Don’t Attach Emotions To Investing
One of the keys is to not get held up by emotions when investing in numbers.
Follow your gut, but based on emotions don’t sell or buy chasing a pipe dream of hitting 1000x gain on some coin no one has heard about.
It doesn’t pay to sell low and buy high because of the emotional rollercoaster of dopamine caused by the thought of making money.
In fact, it actually decreases how much you have.
That isn’t to say you shouldn’t be excited about the companies you invest it, but you should have a calm, assuredness in what you invest in.
Which leads to the next point...
Do Your Research On Cryptocurrencies
Before just buying a bunch of “popular” cryptocurrencies, alike everything else in life, you need to do your research.
You can’t hop into and profit without knowing a little about the companies that you are actually investing in.
Warren Buffett advises doing more research on these companies than most anything in your life.
The predictive analysis of how big they can grow, numbers they can achieve, how their marketcap, and usability impacts their pricing.
Yes there is a lot that goes into it, but truly taking control of your financial freedom requires a bit of work in order to establish and know that you will make money in the end.
Be Aware Of Fees
Most people end up buying Cryptocurrency and sending it from wallet to exchange to wallet to exchange.
Yet, they don’t realize the amount of fees (especially using BTC) that they are using to do this.
While, for most Cryptocurrencies they are marginal - there are still fees and knowing how much they are/how they affect the required gain to make profit is very wise.
It will set you apart from those who think they are gaining, only to wonder why their account keeps dropping in value.
Don’t Invest In More Than 20 Cryptocurrencies at a Time
While it can feel like collecting all Cryptocurrency is worth it, it isn’t.
Everyone only has so much time and energy to put into research, trading, and investing and by constantly spreading out your attention, won’t help with a singular focus.
A method of most of the wise business men is that by focusing on only a few things, you’ll get the most done and the biggest reward.
Which is exactly why separating focus will likely cause a few missteps that could cost a lot of money.
I’m not saying to accumulate free tokens via airdrops or donations, but anything that you are truly “investing” in needs to be researched.
Thanks for reading,
Need help with investing in the right Cryptocurrenices?
We wanted to help take some of the work off your hands and deliver world news, market trends, top coin investments, and more straight to your inbox each month. We call it our Monthly Premium Report. You can learn more about it here.