Oskar Solberg on The 5 Things You Need To Understand In Order To Successfully Invest In Cryptocurrency
For beginners, the biggest mistake I see is failing to book profits. People need to make some price targets and figure out when to sell. Without a plan, you plan to fail, as they say.
Over the past few years, the Cryptocurrency industry has been making headlines nearly every week. Many people have gotten very wealthy investing or leading the cryptocurrency industry. At the same time, many people have lost a lot investing in the industry. In addition, more people have been scrutinizing the ecological impact of crypto mining, as well as its potential facilitation of illegal activity. What is being done and what can be done to address these concerns?
In this interview series called “5 Things You Need To Understand In Order To Successfully Invest In Cryptocurrency” we are talking to leaders in the cryptocurrency industry, as well as successful investors, who share insights from their experience about how to successfully invest in Cryptocurrency.
As a part of this series, I had the pleasure of interviewing Oskar Solberg.
Oskar Solberg is a Norwegian student of Mathematics with a bachelor’s degree in Philosophy. At 15 years old, he started his first online business. Now, he runs a website about cryptocurrency investing over at solberginvest.com. He is an experienced cryptocurrency investor and has written a book on creating successful crypto investing strategies. Every Sunday, he is broadcasting both technical and fundamental analyses through his free and paid newsletters and his website helps out tens of thousands of people every month.
Thank you so much for doing this with us! Before we dig in, our readers would like to get to know you a bit. Can you tell us a little about your backstory and how you grew up?
I grew up in a small town in the south of Norway. Like most of my friends, I was on the path to become a trade worker. An electrician, to be specific. However, I always had a side hustle. At 13 years old I was buying packs of gum on my way to school and selling them one by one for to turn some profit. Eventually I “hired” a friend who sold the gum for me. The school shut the operation down once I started selling more serious stuff like iPhone cases and fake headsets.
When I was 15 years old, I started my first online business. I emailed Chinese factories and imported flashlights, which I sold online at a website I created myself. It eventually failed, but I learned some valuable lessons.
At 17, I got together with a friend and started another website where we sold suit accessories like ties and belts, imported from a Danish company this time. It was a fun project, but it was never serious.
I’m now running solberginvest.com, where I write articles on cryptocurrency investing and technology. I have newsletters, one free and one paid, where I regularly share technical and fundamental analyses and market updates.
Before starting solberginvest.com, I got a bachelor’s degree in Philosophy. Currently, I’m working on my bachelor’s degree in Mathematics. I’m also helping out in some of the University math classes to assist the new students.
Is there a particular book, film, or podcast that made a significant impact on you? Can you share a story or explain why it resonated with you so much?
I’ve read many books and listened to tons of audiobooks and podcasts. One that crossed my path at 15 years old was “Rich Dad Poor Dad” by Robert T. Kiyosaki. This turned my mindset from “I need money” into “I need assets”, which was a big deal for me. The simple idea of building up more assets than liabilities planted a seed in my 15-year-old brain that is still growing today.
Another book that has impacted me is “Mastery” by Robert Green, which I also read at 15. This book gave me the proper perspective regarding timeframe and what it takes to master/succeed at something. It gave me the patience and discipline necessary to “stick with it” for the long term.
Lastly, “The Bitcoin Standard” by Saifedean Ammous deepened my belief in Bitcoin and convinced me that it might be well suited as the fundament of our financial system. Kind of like the gold standard, but with Bitcoin instead.
Is there a particular story that inspired you to pursue your particular career path? We’d love to hear it.
At 10 years old, my father sat me down and explained the concept of stocks and mutual funds to my older brother and me. I was blown away about the possibility of owning a tiny percentage of my favorite candy store or game publisher. A couple of years later, when I started grasping the power of compounded interest, I was flattened by the possibilities and potential. I started saving every penny I could get my hands on and invested them all in mutual funds. Later on, I discovered cryptocurrencies. It was love at first sight!
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
When I started investing in Cryptocurrencies, I misspelled one of the coins I tried to buy, resulting in me buying the wrong coin. I ended up with the wrong asset! Luckily, this coin performed much better than the one I intended to buy. I learned two things from this mistake: Always double-check everything before investing in cryptocurrencies and no amount of research will ever be enough to know everything. You can spend 100 hours per week researching, but there’s always that coin you never looked into that performed better than yours, and there’s no reason to be bitter about it.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
Growing up, I was given a place where I could fail without being judged. I thank my father for creating this environment and supporting me in whatever I did. He gave me the freedom I needed to experiment and figure stuff out on my own. My mother is a hardworking and disciplined woman who always held my brothers and me accountable for our actions. She gave me a sense of responsibility for my actions and instilled an admiration for hard work and discipline. Lastly, I must mention my uncle. He supported me and helped me a lot when starting my first online business at 15 years old. He also invests in cryptocurrencies and is currently writing a book about it. We regularly discuss cryptocurrency, and he is a constant source of inspiration.
Are you working on any exciting new projects now? How do you think that will help people?
My main focus is creating helpful content on my website and broadcasting insightful analyses to my email subscribers.
At some point, I’ll write a short book on Bitcoin and all the different ways of defining it. Some definitions are rather obvious, like “a medium of exchange”, while others are more abstract, like “a form of speech”. I find this way of looking at Bitcoin extremely interesting and profound. Having a background in Philosophy, I naturally find these ways of defining Bitcoin incredibly insightful and helpful. I wish to explain this way of looking at Bitcoin, and money in general, in a deep and meaningful manner, and I think a book is the right way to go.
To be precise, I’ve already written a book about crypto investing, but this one would be more technical and philosophical.
Ok super. Thank you for all that. Let’s now shift to the main focus of our interview. The cryptocurrency industry seems extremely dynamic right now. What are the 3 things in particular that most excite you about the industry? If you can, please share a story or example for each.
I think that institutional adoption is extremely exciting. I’ll never forget when I first saw Micro Strategy making headlines for buying Bitcoin in the latter part of 2020. Then, after a bunch of others came out, Telsa announced the 1.5 billion USD purchase of Bitcoin. This kickstarted the institutional adoption, which will take Bitcoin to $100,000 and beyond.
The NFT sector is exciting. We’re seeing some of the most famous people in the world using and promoting this blockchain-enabled technology. I love how celebrities and artists have embraced this technology, like Kings of Leon, who published their new album as an NFT, and how Lionel Messi was paid partially in fan tokens (which themselves are NFT based) when PSG bought him. Entrepreneurs like Garry Vee are also big on NFT’s. He thinks that stuff like our marriage records and mortgages will be created/recorded as NFT’s in the future, which I agree with. The potential of metaverses, like Decentraland and The Sandbox, is even more mind-bending, which are built on the NFT technology. In these virtual worlds, you’re able to get a job, earn money, rent out an apartment, advertise for your business, make friends, go to festivals and concerts, etc. It’s incredible and limited only by our imagination…
Another sector in the cryptocurrency market I find interesting is decentralized finance. This is not as new as NFT’s, but it’s just as disruptive. Basically, it is the decentralization of services you can get in a bank, like a loan or a savings account. This is, in most cases, an improvement on the centralized model, and in other cases, the only option. According to Statistica, over 60% of the population in countries like Morocco, Vietnam, Egypt, the Philippines, and Mexico do not have access to traditional financial services. These people need the decentralized and permissionless alternative — DEFI.
What are the 3 things that concern you about the industry? Can you explain? What can be done to address those concerns?
One big problem I’m seeing is tribalism. A lot of forums and Facebook groups turn into wars zones when discussing which cryptocurrencies are best. I’ve seen “fans” of Cardano (ADA) battle “fans” of Ripple (XRP) for hours and hours on trivial things like how cool the name of their tokens are.
In my opinion, we need to focus on cooperation and work together to accelerate the mass adoption of cryptocurrencies. If Ethereum gains mass adoption, it would be a good thing for its competition, as it brings in tons of new people and adoption. Some people almost seem bitter, like they don’t want anyone else to succeed if they don’t as well, which is toxic.
Another thing concerning me is regulators not knowing what they do. I’m afraid that they will regulate the life out of it, and drive the potential business and tax revenue out of our country.
Leverage is another thing that worries me. The fact that some exchanges let you use 100x leverage is insane. It’s not only bad for the people who get burned, but also for the rest of us. When many people are highly leveraged on their long positions, and the market dumps, we see mass liquidations pushing the price way further down than it had to go. Now, this also works the other way around with short squeezes. But still, we need less leverage in this market. It’s volatile enough as it is.
What are the “myths” that you would like to dispel about cryptocurrency? Can you explain what you mean?
The biggest myth is that it’s hard to get started investing in cryptocurrencies. It used to be, but now it’s as easy to buy crypto as purchasing a product on amazon. All you need to do is download an app on your phone, do the KYC, add a card as a payment option, and start buying crypto. Helping friends do it usually takes about 10–20 minutes from start to finish.
How do you think cryptocurrency has the potential to help society in the future?
I think that there are several ways that the cryptocurrency market will help society. For example, DEFI brings finance to all the corners of the world, given access to an internet connection. Unbanked people can gain access to financial services like interest accounts, loans, etc.
Another much deeper way is that Bitcoin aligns the “projected aggregate hierarchy of values” with the actual one.
This is a complex and deep idea, but here’s a simple explanation:
The way you spend money tells the market what your value hierarchy is structured like. For example, if you spend more money on renting movies than on a gym membership, you project the value relationship “movies/entertainment over health/fitness”.
The “aggregated value hierarchy” is the set of values projected from our collective spending habits. The way “we all” spend money decides the values that the free market adopts.
If this is true, then this aggregated value hierarchy sets the prices of goods and services.
The problem arises when central banks manipulate prices via inflation and adjusting the interest rate.
They are twisting the market, and therefore the aggregated value hierarchy, and therefore our individual voices.
In some sense, they’re manipulating the fabric of reality and imposing their set of values on everyone else.
Bitcoin solves this because it is decentralized, un-corruptible, un-inflatable, censorship-resistant, transparent, and ownership is verifiable by everyone.
With Bitcoin, the aggregated value hierarchy we project to the free market is identical to the actual one. This way, Bitcoin gives us free speech.
This is a rather philosophical point and is hard to wrap one’s head around…
Recently, more people have been scrutinizing the ecological impact of crypto mining. From your perspective, can you explain to our readers why the cryptocurrency industry is creating an environmental challenge?
It’s wrong to look at the production cost of Bitcoin in isolation. If Bitcoin saves more energy where it is adopted as an improvement than the production of new Bitcoins cost, its energy usage is justified, if not encouraged! One has to calculate the net effect by taking all the factors into consideration.
Elon Musk, to some degree, and other certain regulators in The U.S and here in Norway, see only one side of this phenomenon…
In some sense, it’s like saying Solar panels are bad because the process of creating them is hurting the environment. You have to consider the implications of using it before judging the “eco-friendliness” of its existence or creation.
From your perspective what can be done to address or correct these concerns?
Educate people about the potential that Bitcoin can be net-positive for the environment.
To be clear, I do think we need to push renewable energy sources on the Bitcoin miners. We must manipulate both sides of the equation to turn the net positive!
Recently, more people have been scrutinizing cryptocurrency’s impact on illegal activity. From your perspective, can you explain to our readers why cryptocurrency, more than fiat currency, is seen as an attractive choice for criminals?
I think this problem is being blown up by regulators while also showed under the carpet by “Bitcoiners”. There is a real problem with ransomware attacks and money laundering, for example. This must be addressed, but not by “banning” Bitcoin or crypto or by regulating the life out of it.
We need to make it likely enough, without sacrificing privacy, that blockchain research firms and investigators can catch bad actors, that it makes criminal activity involving crypto unattractive.
We must do as little as possible, but some things are necessary.
The real bad guy is cash, as it’s totally private and untraceable.
From your perspective what can be done to address or correct these concerns?
As mentioned above, we need to develop more effective ways to tracking bad actors down and catching them. This will remove some of the criminals and scare many others. In other words, the solution is not to ban or over-regulate it, but to develop competent organs that can catch the bad actors.
Ok, fantastic. Here is the main question of our interview. What are “The 5 Things You Need To Understand In Order To Successfully Invest In Cryptocurrency?” (Please share a story or example for each.)
- The cryptocurrency market is cyclical. This is important for long-term investors to know. It goes like this: Bull market, bear market, accumulation phase. We’re currently in the fourth cycle, and the predicted price is at least $100,000. Also, the cycles seem to lengthen, and the returns are diminishing. This means that the next cycle will likely be five or six years long and yield lower returns than this one.
- Don’t chase the pump. Most people get into a coin because it’s up a lot in the recent past. This is called chasing the pump, and it’s a bad strategy. Most of the time, getting in after a coin has pumped is like a one-way ticket down because other people start taking profits from the pump, pushing the price back down. Also, you need to consider the opportunity cost of not investing in what might be the next coin to pump. Generally, you’re better of thinking about what coins will do good over the long term and not think about the short-term pumps and dumps.
- Trading is hard. Almost everyone is better of holding for the long term. If you’re an expert and have traded stocks or something else, you might make it. However, if you’re a beginner, you’ll be eaten alive by the insane volatility. Most people are better off accumulating over time and holding through the ups and downs for a long time. Personally, I swing trade with a long-term perspective. I usually trade with a perspective of 3–6 months, but sometimes up to 3 years.
- The long term (more than one year) is rational, but the short term isn’t. What happens tomorrow, or next week, or even next month is impossible to know. Anything can happen, and there are way too many factors to consider. However, in the long term, things are more rational. A lot of the short-term noise is canceled out, and we can use data science models and historical data to say something meaningful about the future.
- You need to have a plan for when you’re going to sell. If you don’t, you’ll probably let your emotions get the best of you. When the price is high, and you should sell, you’ll get greedy and wait for even higher prices. I learned this one the hard way. I bought XRP in December of 2017 and made a 1000% return in 30 days. With my head in the clouds, I expected it to go even further. I thought I was a genius and that XRP was going to make me rich. But then, in the next 30 days, it plummeted 82.84%, washing away basically all my profits. Generally, I take gradual profits along the way to ensure that I book some profits in case of a dump. For example, if I think Ethereum will hit $10,000 in 2022, I’m not going to wait until it hits $10,000 and sell everything. I will sell some at $7,000 and some at $8500, and then the rest at $10,000. This drastically lowers the risk of not selling at high prices.
What are the most common mistakes you have seen people make when they enter the industry? What can be done to avoid that?
For beginners, the biggest mistake I see is failing to book profits. People need to make some price targets and figure out when to sell. Without a plan, you plan to fail, as they say.
For people beyond the beginner stages, the biggest mistake I see is the inappropriate use of leverage. This is a massive problem in the crypto market and is one of the reasons for its high volatility. Personally, I use conservative leverage only and always have a plan in case I need to add more collateral. The last thing you want is a margin call when all your money is locked up. Trust me, I’ve been there.
Do you have a particular type of cryptocurrency that you are excited about? We’d love to hear why.
I’m really excited about the whole “metaverse” thing. It’s relatively primitive and not as “hot” as DEFI and NFT’s. However, it’s got the potential to swallow both of those markets. The whole metaverse is built on NFT tech, and you can earn money by participating in DEFI apps within the metaverse. It’s crazy once you really start thinking about it. Raoul Pal himself has stated that metaverse technology combined with NFT’s and DEFI might double global GDP in his 1.5 hour-long YouTube video called “Raoul Pal’s Introduction to the Exponential Age”. Projects I’m following within this sector include Decentraland and The Sandbox.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. :-)
There is no shortage of problems out there, and we all feel callings to different ones. Realistically speaking, there’s a limit to what problems we can take on individually. I would love to solve climate change and end all wars, but I’m not the right guy to do that. It is not my calling. I’m focusing on and actively improving to empower individuals to take economic responsibility for themselves, their family, and their community. I want to help people develop their financial literacy and empower them to live better lives and create more value for others. For some, this means setting up a safety net or saving for their pension. For others, who are less fortunate, it means getting access to financial services for the first time in their life and using them to start creating wealth for themselves, their family, and their community. I believe that empowering individuals to take economic responsibility will improve families, communities, countries, and the world in more ways than one. This is my calling, and I’m working every day to fulfill it.
We are very blessed that very prominent leaders read this column. Is there a person in the world, or in the US with whom you would like to have a private breakfast or lunch, and why? He or she might just see this if we tag them :-)
Jordan Peterson is a huge influence, and I would love to have a talk with him. His view on personal responsibility and the divinity of the individual made a significant impact on me. His religious series on YouTube is incredibly dense with mind-bendingly insightful stuff. Specifically, I would love to talk to him about the effects of individuals taking economic responsibility on a large scale and hear his thoughts on this subject.
Thank you so much for these excellent stories and insights. We wish you continued success and good health!
The same to you and thank you for having me on. I appreciate it!
