If you’ve been curious about investing in cryptocurrency, it’s becoming easier than ever. It used to be you had to have some technical savvy, but new platforms and educational tools are making it easier than ever to start investing in crypto.
In partnership with eToro, we chatted with Kevin Stanley, the CEO of Crypto 101.
Crypto 101 is a podcast and educational site for cryptocurrency traders to talk about getting started with crypto. Kevin is passionate about cryptocurrency and helps listeners not only understand the importance of decentralization but see the overall market opportunity for investing in crypto.
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Why Invest In Crypto?
I think cryptocurrency, in some capacity, is going to be around for a long time. People are nervous to invest in something so new, but imagine having the chance to invest in the infrastructure that built the internet but passed on the opportunity because it was such a nascent concept.
Who Should Invest In Crypto?
That's a great question because the answer is, "Not everyone." The cryptocurrency market is extremely volatile and I only recommend people invest in crypto (for the long term) if they have all their financial ducks in a row.
Crypto investors should have 6-8 months of living expenses saved and liquid, have a good grasp on their debt payments and a secure, stable source of income. If someone checks off each of these boxes, then I think a 15-20% portfolio allocation in crypto makes sense.
There Are So Many Coins! How Do I Know Which One To Buy?
To be totally honest with you, I recommend following trusted crypto investors who have done all the research and have an excellent understanding of the difference in coins.
Actually, eToro is a company I often recommend a new investor try out because their platform has a feature called "CopyTrader" that lets you allocate funds to copying the moves of a top-performing trader. They also have a feature called CopyPortfolio that lets you invest in a managed portfolio.
So Is That What You Do?
Actually, yes! You would think I'm an active crypto investor, but I'm not -- instead, I'm running a business. So I use eToro for this exact reason.
A friend of mine in the industry, Josh Frank, has a CopyPortfolio with his company, The TIE, for investors to copy on their own. It’s called TheTIE-LongOnly. I highly recommend checking out the strategy.
That's Interesting You're Not An Active Investor. What Attracts You To Cryptocurrency Then?
In my opinion, governments make mistakes. They always have and they always will. The world is going through an unprecedented moment today, especially regarding monetary policy.
The Federal Reserve has printed more money than anyone thought possible and at some point, this will affect the value of the dollar. Also, the dollar itself is moving in the direction of being replaced by a digital currency.
For these reasons, I am bullish on cryptocurrency long-term, even if the use case doesn't seem obvious today.
You Mentioned Your Friend Joshua Frank From The Tie, Who We Recently Interviewed. He's A Technical Trader Who Analyzes Social Signals And Buys/Sells Crypto Based On That Strategy. Do You Follow His Portfolio On EToro?
I do. My advice to any new investor is to diversify. I follow The Tie's portfolio because I think crypto is the kind of asset where there aren't underlying profit margins and balance sheets to review -- like there are in stocks.
I also invest in stocks. And bonds. And real estate. In other words, I'm a huge fan of diversification because if there's anything 2020 has taught us, it's that we never know what the future holds.
Any Final Words You'd Like To Share With The College Investor Readers?
Yes! I wish more young people understood that a currency must be scarce in order to really work as a currency. The U.S. dollar today is anything but scarce. Even gold isn't scarce. Bitcoin is a truly scarce asset. And, for that reason, it's important to stay informed.
Sign up for Google alerts or check out our podcast and notice that every day another massive financial institution or sovereign wealth fund or pension fund is allocating money towards crypto. And good luck!
Interesting thoughts and concepts, and I love what Crypto 101 is doing to educate new investors. As Kevin said, it’s not for everyone, but there are strategies that can help.
For example, we love eToro’s CopyTrader™ program, where you can simply follow along with another trader. It’s a great strategy that makes it easy to get started. If you’re ready to dive in, check out eToro!
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Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.