How to Become a Venture Capitalist on a Middle-Class Income: Getting Started in Altcoins

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So It’s Your First Time Trading Cryptocurrencies….

So you decided to invest in cryptocurrencies and start trading. But you don’t want to buy Bitcoin, you’re specifically interested in cheaper altcoins. There’s some psychological basis for wanting to own 10000 ADA instead of 0.5 BTC. I am heavily invested in altcoins myself, and the majority of my portfolio are gains that can be attributed to altcoin picks. If cryptocurrencies were analogous to stocks, then each altcoin is like a company. There’s at least two sides to investing in any company: the fundamentals vs. the technical analysis. We’re going to cover a little bit of both, and learn to think a little bit like a venture capitalist and a little bit like a day trader. It’s my opinion that you should have a little bit of both.

Researching is Your Most Effective Weapon

It is crucial to research before investing.  The very act of getting involved with some cryptocurrency in anyway possible, allows one to engage the community. The fundamentals of cryptocurrency are simple: cryptography, and decentralization. Aside from this, the basic principles of the underlying blockchain technology have massive benefits, but also disadvantages to centralized networks.

Get Involved Slowly

Jump in to cryptocurrency, anyway you can. Grab some free bitcoin, get a wallet, open a coinbase (read our review of Coinbase) account. Just the act of doing any of these expands your knowledge. This opens your mind to what cryptocurrency is, how it functions and what’s required. It’s nothing like a bank account, where one needs to be interviewed by a dude in a suit. Cryptocurrency is the opposite. Get a wallet and an address, there’s no risk involved.

Don’t get started by buying $1000 of Ethereum and thinking you’ll get rich over night. That probably won’t happen.

You Don’t Need to be a Crypto Genius

One can get started and slowly develop the knowledge needed. you may not fully understand. Even after developing a basic understanding of Bitcoin, it is important to realize the risks. Like stocks, and other securities, it’s essentially gambling. BUT, a little strategy and some patience will pay off. The markets are complex and limited, with little regulation. Prices changes in cryptocurrency more than some stocks change in years! Our goal is to minimize gambling and do a little trading to maximize investing. How do you find the winners before they win? Here are some strategies on gambling, trading, and investing in altcoins. But without risk, there will be nothing learned!

Altcoin Trading Fundamentals

The fundamentals of any coin can be summed up in the three things venture capitalists look for when they’re looking to invest in a company: a good product, a good team, and a large market with a large enough potential Return-On-Investment, or ROI.

Not many people are technically adept with cryptocurrency, and that doesn’t matter.

A good product means the coin solves a problem and provides novel use cases that aren’t already being done by existing coins. Decentralization is a key aspect of blockchain technology. Some examples of problems currently being tackled with the help of blockchain technology include smart contract platforms, identity verification, voting, credit scoring, data storage, open access to the Internet, and of course, transfer of value. Good coins can also be good because they improve upon existing coins, such as by improving network speed, increasing transaction capacity, or decreasing transaction costs.

Altcoin Technical Analysis