3 Rules for New Bitcoin Buyers
Whether you are a first-time buyer, or a long term trader there are a few tricks of the trade which help individuals make the most of their Bitcoin purchases. I would like to give my thoughts on individuals who are somewhat new to the space and are considering investing in Bitcoin. In the following, I will break down my 3 rules for Buying Bitcoin.
Stop Telling People you are buying Bitcoin
This may sound absolutely ridiculous, but I am a firm believer in privacy and safety and for this reason. STOP telling people you are planning on, or you have invested in Bitcoin. I believe this is a bad idea for a few reasons. Regular non-professional individuals who are looking to buy Bitcoin need to be particularly careful about privacy. This means no social media are posting about Bitcoin or crypto purchase and no blabbing about crypto purchases around the water cooler at work. This isn’t paranoid, the fact is that sophisticated individuals and companies are being hacked and millions of dollars worth of crypto are stolen almost every week. You cannot expect to outsmart these hackers, and you need to be extremely paranoid when discussing your crypto and Bitcoin purchases. Social media is a great way to collect personal information, and most people don’t even realize it. With enough data, which is publically available, hackers can brute force attack dormant accounts especially if they have your email address. This sounds crazy but please — don’t be that guy posting about your Coinbase purchase on Facebook. Eventually, the wrong people will take notice.
Always Buy with a U.S Exchange
Always purchase crypto from a U.S based Exchange. If you are looking to buy Bitcoin or other cryptos for the first time using USD, please use Coinbase, Gemini, or Abra. These are companies which are run by professionals and will handle your crypto storage and purchase in a highly responsible manner. Put simply there are only a few USD gateways to crypto, use the US-based exchanges, most other exchanges either do not accept USD or are not safe to send USD to. Also, don’t outsmart the IRS — buying your crypto from people on craigslist is an easy way to lose your cash and potentially land in hot water later. Coinbase and Gemini offer tax and accounting information to control your buys better and sells, save yourself a future headache and use one of these exchanges when buying or selling.
Never Leverage or borrow money for Bitcoin Purchases.
I’ll be extremely clear, stay the hell off of BitMEX. There are tales of fortunes being made on Bitmex by taking advantage of leveraged trades. YOU WILL BE REKT. Some individuals and funds have 30+ years of trading experience betting against you. They will take your money, and you will lose everything. I don’t think I can be more clear, BitMEX can be addictive and be extremely enticing, but please stay the hell off it.
Additionally, I remember in 2017 there were stories of people selling everything they owned for Bitcoin. There were also stories of people taking second mortgages out to buy Bitcoin. These people are fools, and they are likely homeless now. Never, under any circumstance, buy Bitcoin with a Credit Card, or take personal loans out for Bitcoin. This goes back to the fundamental rule that you should never, ever invest more than you are willing to lose, and other no circumstance should you take out loans to finance your positions in crypto!
I hope these three rules help you on your crypto journey, the road will be bumpy, but if you follow these rules, you will have a better chance of having a positive crypto experience.