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Surrounded by the Buzz of Bitcoin.

Posted on by Rand Preston

Bitcoin is the catch-all buzzword when it comes to most people talking about digital assets, and perhaps it deserves to be. It was the first one out of the gate to make huge headway in a new asset class. However, just as a copy is a copy and Xerox is a company that makes copy machines, though many people say, “make a Xerox,” we need to separate Bitcoin from being the all-encompassing digital asset.

Entry into this era of digital assets is a matter of timing, and that timing is left to you, the individual investor. My style of investing prefers to wait until investment vehicles, security, and regulatory actions are in place or close to becoming in place. It is a game of wait and see, hopefully having intelligently deduced what the final result will be that satisfies my objective.

I have been watching the regulatory environment, filed any crypto holdings or trades I had with my tax returns (because the IRS requires it), and heard from my bank that they “do not typically release funds to Coinbase.” Though they do eventually release the funds.

The average investor that wants to get in the digital asset market before the possible onslaught of major banking firms open the doors can look inside the United States.

For starters, Coinbase (San Francisco, CA), Uphold (Headquartered in Charleston, SC), Evercoin (Silicon Valley), and Bittrex (Seattle, WA) are US based firms that provide different investment vehicles and options for the digital asset investor.

Coinbase

A major digital currency exchange that allows for the deposit of $USD (fiat) from your bank account to a USD account within the Coinbase platform, or directly purchase Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), and Litecoin (LTC). The platform has been in the news recently as the Securities and Exchange Commission (SEC) and Wall Street have been gearing up for the digital asset revolution.

Uphold (Welcome to Uphold. The Internet of Money)

Feels more like a brick and mortar institution, in my opinion, for the digital currency space. To me, that is comforting. Here, you can buy and sell over 30 different assets that you can hold, exchange, or sell around the world. Currencies available for bank transfers include: US Dollar ($), Euro (€), British Pound (£), and Chinese Yuan (¥).
Uphold has also achieved the distinction of supplying a Cryptionary (like a dictionary) for users to facilitate an understanding of the language and buzzwords in the digital asset environment. This is an excellent tool and I suggest that you look at it to better familiarize yourself with the industry.

Evercoin

An exchange. Here, you can exchange currencies from one to another. For example, you want to exchange Litecoin from your Coinbase account to XRP that you hold in a digital or hard wallet, you can do it through Evercoin. Select the amount of one coin that you want to exchange for another and the application automatically sets the amount of the other coin you will receive. The exchange rate already includes all fees, so what you see is what you get. Very easy to use.

Bittrex

Has the look and feel of a professional trading platform and may be a bit scary for newcomers to the digital asset investment world. They are based in Seattle, WA and was founded by previous Microsoft security professionals. They host a massive number of cryptocurrencies with over 190 available.

Wallets: Hot and Cold

Hot wallets store your crypto on an internet enabled device. You also have the option of storing your assets directly on the exchange you are using, and should research the level of security, past breaches, and insurance coverage provided should a hack occur.
Cold wallets store your crypto offline. Currently, this is arguably the most secure way to store your digital assets. There are different manufactures of these devices and each device may NOT store the different digital assets that you are interested in purchasing. DO YOUR RESEARCH to learn which cold wallet will perform for your investment needs.

Examples:
Think of it like this:

HOT WALLET= connected to the internet (MultiBit, Armory (desktop wallets) MyCelium, CoPay (mobile wallets)
COLD WALLET= NOT connected to the internet (Trezor, Keepkey, Ledger Nano S)

All of the examples above; the exchanges, platforms, apps, and wallets have different user features, fees and account set up requirements. Be prepared to offer your personal identifying information in order the financial and banking regulatory rules be adhered to. These verifications vary from a copy of your driver’s license, to possibly more if you are a big investor. Do your own research and understand the risks associated, the assets you are interested in, and other details such as purchase and withdraw limits.

This post is meant to wrap your head around entering the digital asset investing world. There are many questions and regulations that need to be ironed out, and time will establish the system. My point is this; I believe that the digital asset is here to stay and where it took Amazon 20 years to reach its share price, the digital asset world will move more quickly. Technology and the digital world has become not only comfortable and familiar, but necessary. This is the next extension of the digital evolution.
I am not a financial advisor and you should perform your own research, due diligence, and obey tax and regulatory laws.

Best,

Rand

NOTE: As the domain name of this site suggests, the content my blog posts are opinion and not investment advice of any kind. Do your own research before making any decisions to invest (or not to invest). I am not a financial advisor. I am simply sharing information I gather from across the web, news, and media outlets and drawing my own possible conclusions.

In the Bit-ginning…

Posted on by Rand Preston
Photo by Moose Photos from Pexels

When I first heard about cryptocurrency, I had a gut feeling that it would somehow become something big. The problem was, I was uncertain about how to get possession of it in late 2010, early 2011 when Bitcoin moved to around $1.00.

Fast forward six years when I asked a good friend of mine who works in the tech industry what he thought about Bitcoin, and he said, “I looked into it about 3-4 years ago, but never ended buying into it.” In late December of 2016 when this conversation was had, Bitcoin was around $800.

Even more of a stinger, when I finally learned how to set up for proper investing in the cryptocurrency market, Bitcoin had just touched $17,900…per coin. Hindsight being 20/20, it is the risk-reward scenario that both entices investors and leaves others sitting on the sidelines. The other aspect of sitting on the sidelines is lack of information.

Those that got on board early enough to realize a price swing of $17K in under ten years are the exception. The rest of the investor community can decide to educate themselves and develop an investment strategy early, get into the game late, or not at all. I say set realistic expectations, educate yourself, know your limits, and if you decided to get in the game, go long.

The fact is, in 2011, very few people knew how to enter the digital asset market. It was the wild-west of investing and it went square in the face of the regulated banking industry. Investment platforms were unknown, untested, and uncertain in the level of security they provided . Realistically, that was the perfect timing for a decentralized monetary system to come into the picture. Banks, big business, and governments across the world were sinking and when Bitcoin went live in 2008, it was making a statement in a huge way. A decentralized, peer-to-peer currency system. The belief in the banking system was at an all-time low and an opportunity to capitalize on the system’s failure was to be exploited.

We are ten years from the “Great Recession,” and have watched the stock markets rally to all-time highs. When the “whales” decide that they want to take their profits, the house of cards will fall swiftly. We have seen this with the meteoric rise and fall of crypto prices through 2017.

Simultaneously, we are witnessing the dawn of a new asset class: digital.
Remember how I said the early years of cryptocurrency were the wild-west and the digital asset community was standing square in the face of regulated banking? A decade later, we see a concerted effort to bring the digital asset community into the same system of regulation that fails at least once in a generation, if not more. That’s just how it goes. The US government is in play when it comes to the digital currency market with regulations, tax law, and policies. Many in the cryptocurrency world believe that a decentralized approach is best. Other minds see the regulating authorities as the appropriate method to bring economic stability

Fortunately, we are at the very beginning of instituting this new class of investment vehicles, and that can have long-term benefits. We may or may not see the hyper price increase that was seen with Bitcoin over the past ten years. Many would state that the prices were wildly manipulated to achieve such highs. Others, however, believe that we are just at the beginning and the coin market will see a “flippening” where Bitcoin (BTC) loses its current spot as the number one token. I suggest reading the following thoughts on the possibility of a Bitcoin ETF as the SEC prepares to approve or deny its listing in the next couple of months.

Best,

Rand

 

NOTE: As the domain name of this site suggests, the content my blog posts are opinion and not investment advice of any kind. Do your own research before making any decisions to invest (or not to invest). I am not a financial advisor. I am simply sharing information I gather from across the web, news, and media outlets and drawing my own possible conclusions.