Cryptocurrency Investment Udemy Course
This blogpost contains summary points from a course on Udemy titled ‘Cryptocurrency Investment Course’
Summary Points
- Suppoman has been in crypto space for the last four years
- Crypto terminology
- Private Key
- Public Key
- Market
- Bitcoin - Can be used as store of value
- Mining(Proof of work)
- Moneyflow usually goes from fiat to bitcoin and then it goes to
big/medium/small market cap coins
- https://www.blockchaincenter.net/altcoin-season-index/
- Bitcoin Season
- If 75% of the Top 50 coins performed worse than Bitcoin over the last season (90 days) it is Bitcoin Season
- Altcoin Season
- If 75% of the Top 50 coins performed better than Bitcoin over the last season (90 days) it is Altcoin Season
- Blockchain (Layer 1)
- Gas - Transaction fee, that goes to the miner
- Ethereum allows you to build apps on the ethereum blockchain
- Most of the cryptocurrencies start off on ethereum and then create their own Blockchain
- Smart Contracts
- Fiat Currency
- There is no volatility in stable currencies - Tether
- People park profits in stable currencies
- People trade their cryptocurrencies and put their profits in tether
- Market Cap
- Volatility
- HODL
- Trading - Day trading, short term trading, swing trading
- Technical analysis
- Support, Resistance
- Fundamental analysis - what pain does it solve ? is it really needed in the market ?
- Market cycles - 18 months to 2 years
- Wallets - Hot and Cold
- Hot wallet - Money is readily available
- Cold wallet
- Centralized exchange
- Decentralized exchange - Your wallet interacts with the dex and then keeps track of all token inventory
- IDO - Initial Dex Offering
- Astroswap mentioned in the course has already tanked
- Metaverse - Hottest type of cryptocurrency
- DeFi - Uniswap is a kind of decentralized finance
- Staking - Locking up your tokens on a particular platform. Protecting proof of stake
- Yield farming - Stake your cryto and get an APR
- GameFi - Gaming mixed with decentralized finance
- NFT - Non Fungible tokens - Collectible item
- Meme coins are a joke type of cryptocurrencies
- Go to sites for crypto prices
- Large Caps in Cryto - 10B or more (20 coins)
- Bitcoin
- Ethereum
- Binance Coin
- Tether
- Solana
- XRP
- Cardano
- USD Coin
- Terra
- Avalanche
- Polkadot
- Dogecoin
- SHIBA INU
- Polygon
- Binance USD
- Crypto.com Coin
- Wrapped Bitcoin
- Litecoin
- Uniswap
- HEX
- Mid cap - 250M-10B
- 240 coins
- Low cap - 50M-250M
- 340 coins
- Microcap < 1M-50M
- 1200 coins
- Large Caps in Cryto - 10B or more (20 coins)
- Fiat Onramp feature of exchange - You can use Fiat currency to buy crypto
- Coinmarket and Coingecko - Bluechip for getting overall market data. Nomics is getting there
- Buying Crytocurrencies
- Exchanges
- Spot Exchanges (Centralized)
- Derivatives
- Dex: Buy and sell directly from a web wallet
- Fiat gateways
- Coinbase, Binance, Kraken, Kuocoin
- Centalized exchanges
- Coinbase
- Binance
- Gate
- FTX
- Serves Solana based coins
- gate.io - you can buy newer crypto currencies
- Decentralized exchanges
- Uniswap ( Ethereum based cryptocurrencies)
- Pancakeswap ( Binance smart contract chain based)
- Radium (Solana based)
- Workflow is to use fiat gateways and buy ether. Push the ether to metamask and then use metamask with any of Dex to get tokens
- Metamask allows you to create networks that can be used to buy crypto coins across various blockchains
- Online payment services - Paypal
- Exchanges
- Hard Truth
- Most of the tokens are speculative in nature
- People get REKT in a bear market
- Can crash suddenly for no obvious reason
- Bitcoins does well means it is good for alt coins
- market is ruled by greed and fear
- most people buy high, sell low
- Multipliers
- personal strategy is to look for 100x investments
- what are the low cap coins that can become mid cap coins ?
- what are the micro cap coins that can become low cap coins ?
- lower value, the greater the risk of investment
- Top multipliers of the instructor
- Bitmax(1000 USD) - 326x
- Refinable(1000 USD) - 398 x
- Tronpad(0.001) - 420x
- BNB(0.72) - 958x
- Matic(0.0026) - 1030x
- What effects price ?
- Events/Rumors - launches, updates, listings, partnerships
- FOMO on launch
- listings on dex of cex
- listings can be pump and dump
- Marketing - Is there a marketing team that supports the vision ?
- relevance
- liquidity
- investor confidence
- Market forces - bull/bear market, bitcoin/altcoin season
- Utility/Benefit: Is there a utility to owning the cryptocurrency ?
- Every cryptocurrency has to be marketed as a utility that is designed to give a profit
- Cannot advertise as an investment opportunity
- Narratives
- DeFi, NFT, Scaling, Meme coins
- Infrastructure coins
- Privacy coins was narrative in 2017 and 2018
- Scaling is a narrative in 2020 and 2021
- Technical or charting
- Milestones
- Testnet, Mainet, Listing, product launch
- A coin has to pitch to exchanges for listing
- Influencers - Youtube, twitters - promoting altcoin
- Celebrity endorsements
- Venture capitalists and institutional buyers
- Network effect - integration and adoption
- Scams, lies, delistings, closures, rug pulls
- Events/Rumors - launches, updates, listings, partnerships
- DYOR
- Do your own research - Don’t invest in the space based on what other people are buying
- Be informed - Telegram, news(coindesk, coin telegram),google search, YouTube, Coin analysis, Twitter
- Don’t gamble
- Picking names that sounds good - Bad advice
- If you gamble, most likely your investment will crash
- Do you understand it ? Can you explain it ?
- Does it solve a problem ?
- Can it build value over time ?
- Emotion
- Don’t fall in love with a project that you have invested in
- Avoid FOMO, Greed and fear
- Stick to a plan
- Use markets emotions to maximize profits
- Anticipate the highs and not chase the highs
- Fall from grace 20k to 3k in 2018
- How to spot euphoria stage ?
- Net Unrealized P&L - There are ton of metrics available at glassnode based on on-chain data
- Don’t sell in despair stage
- Bitcoins vs. Altcoins
- Look at the bitcoin season and altcoin season at https://www.blockchaincenter.net/altcoin-season-index/
- Money flow in Crypto
- Fiat to Bitcoin to Large caps to Mid caps to Low caps
- Consolidate profit to bitcoin and then move it to fiat
- Low caps are usually the ones when people gamble
- Bitcoin hits its top – alt coins hits up
- Need to check with data whether this is indeed true that when bitcoin hits the top, there is a movement in to altcoin before everything crashes
- In the bear market, people move the money to tether
- Put everything in one coin
- 20,000 in Voyager Token Chart invested by suppoman
- Do as I say, not as I do
- Smart VCs put in money in Bitmax token
- Low cap investment - look for venture capital funding
- https://www.cypherhunter.com/en/ - lists all the VCs behind the crypto world
- Going all in can be life changing or throw in to poverty
- Best way to make money is to research on crypto currencies
- Start with coingecko or coinmarketcap
- Market Cap to trading vol is atleast 5:1
- https://www.dextools.io/app/ - App that shows stats on market activity in dex markets
- Search through telegram to get to market stats that are not publicly available
- Infrastructure narrative tends to do well in whatever be the kind of markets
- Look for general stats such as circulating tokens, token supply
- See if there is considerable trading volume as compared to market supply
- Go to telegram groups and see if you can cull out stats on circulating tokens
- Explore the narrative of the coin
- DeFi
- Binance smart chain
- NFT
- Infrastructure
- Compare marketcaps of the coin that you want to invest and the market cap of a coin in a similar category
- Go to cypherhunter and check the VC list
- Go to medium and follow the blogs created by crytocurrency issuers
- Themes
- Decentralization
- Infrastructure
- NFT
- DeFi
- Subtrends
- gas fees
- scale network
- celebrity endorsements
- Better to follow VCs
- Thtey don’t gamble
- Network with whale investors
- More informed
- Connections
- Expertise/marketing
- Keep a track of Top VC list - atleast 30 and bucketize them in categories
- Taking profits
- Protection and hedging against volatility
- 3-5x - consider selling initial investment and let the remaining amount remain in the investment
- Sell everything at 20x-100x
- Use people over enthusiasm as a time to sell
- Get out at the right time: Smart money - Institutional money - Public euphoria
- Altcoin crash - Put the money in to USDT
- Take profits - don’t look back
- Relevant Links
- Coin Research Websites:
- Centralised Exchanges:
- Spot exchange index: https://coinmarketcap.com/rankings/exchanges/
- https://www.binance.com/
- https://www.binance.us/ (for US customers)
- https://www.coinbase.com/
- https://www.gate.io/
- https://www.kucoin.com/
- https://ftx.com/
- Decentralised Exchanges
- Ethereum: https://app.uniswap.org/#/swap
- Binance Smart Chain: https://pancakeswap.finance/
- Solana Tokens: https://raydium.io/swap/
- Technical Analysis Chart
- Altcoin Season graph
- Venture Capitalists & Institutional Investors
- Understanding Cryptocurrency, Bitcoin and Alt coins
- Cryptocurrency is digital currency
- Stored on the digital ledger, owned by private key
- All of the digital computers agree on the state of the ledger
- Decentralization of trust - removes 3rd parties
- Mined and Minted supplies
- Asset class and spendable
- Many view the cryptocurrency as an asset class
- Bitcoin
- Bitcoin is the original and the main cryptocurrency
- Called as Digital gold
- Main buying cryptocurrency for alt coins
- Most likely to be adopted by mainstream
- consistent growth vs volatile alt coins
- Ethereum
- Main Alt coin
- Currency of value and buying altcoins
- It is a software platform - DApps
- Smart contracts - runs automatically on its own
- Allow smart contracts to be build
- Crowdfunding platform for ICO’s
- Alt coins
- Any other cryptocurrency other than bitcoin
- Less well known and established
- Can be bought with BTC, ETH, BCH, LTC, USDT
- Potentially higher volatility / multipliers
- Why People love crypto ?
- Multipliers
- Come for the gains, Stay for the technology
- Decentralizatoin of technology
- Why Crypto is not hot ?
- Volatility - significant and fast ups and downs
- Unreliable and unpredictable
- Security infrastructure
- Gambling - perceived speculative value
- Sentiment drives the market a lot
- Two different ways to look at value
- based on dollars
- based on various cryptopairs such as BTC, ETH
- some people care about 2x or 10x based on satoshis and not based on dollar
- most people mark their portfolio based on satoshis
- Coins vs Tokens
- Tokens are utilities. Think of coin used to play a ping pong game. Do not think of these tokens as transfer of value. The dApps use tokens as these tokens are used to run the dApp
- Millionaire calls
- PIVX - 100x
- Ripple - 10x
- Wavecoin - 10x
- Dash - 10x
- XBC - 1000x
- Tried looking at the performance of the above coins in 2021. The returns are 5x on your investment.
| Jan-21 | Dec-21 | Returns | |
|---|---|---|---|
| PIVX | 0.32 | 0.5 | 56% |
| Ripple | 0.2 | 0.88 | 340% |
| Waves | 6.3 | 16 | 154% |
| Dash | 152 | 136 | -11% |
| XBN | 1.47 | 0.35 | -76% |
- Understanding Blockchain
- Blockchain
- Growning list of records linked by hashes
- immutable digital ledger
- financial transactions, software transactions and document
- decentralized
- consensus protocol - speed and security
- SHA256(Secure hash algorithm)
- hashing algo in bitcoin Blockchain
- unique hash for each block
- block contains block number, nonce, data, prev hash and present hash
- miners solve nonce to create current hash
- computational power protects network
- Blockchain
- Let’s get started buying your first cryptocurrency
- Use coinbase to buy crypto using fiat
- Binance has become fiat on ramp exchange
- Fees are less on Binance
- Way more altcoins on Binance
- BNB markets are the markets where you can buy with Binance coin
- Use your first crypto coins to buy and learn about the industry
- Dex is owned by nobody. You are the custodian of the money. No KYC is
needed. Only a wallet is needed. If Dex is hacked, nothing happens to your
money
- Konomi - an example used that has tanked all the way through since the launch date
- Get the official contract address and swap the token
- Confirmation on uniswap means that you will have to spend the gas fee on ethereum network as the dexes usually run on ethereum network
- Need a metamask or some wallet
- Uniswap is a dex based on ethereum tokens
- Pancakeswap is a dex based on binance smart chain tokens
- Launchpads
- Similar to ICO where we have a private sale of coins for various projects
- These projects are usually based on several Blockchains
- Useful for flipping or long term investment
- If you get in to an IDO, then the coin is usually a few cents and you can ride it through the bull run when it hits a cex
- Examples of 1000x returns - POLYGON and SuperFarm
- Many launch pads available
- Polkastarter on Polkadot ecosystem
- BSCPad Binance Smart Chain Pad
- PAID on Ethereum, Binance and Polkdot
- Card Starter on Cardano
- Occam Finance on Cardano
- Polystarter on Polygon
- Kickpad on Binance smart chain
- How to buy in Launchpads ?
- https://cryptorank.io/ - Good site to look at various metrics
- Tiered approach to allocations
- Allocation $ amount that you can buy in IDO
| Coin | Eco | Tokens | Price | Allocation |
|---|---|---|---|---|
| Polkastarter | Polkadot and Ethereum | 250+ | $475 | Lottery |
| Paid | Polkadot/Ethereum/BSC | 1000+ | $700+ | Lottery |
| Occam.Fi | Cardano | 75-150 | $750-1500 | Guaranteed |
| BSCPad | Binance Smart Contact | 1000+ | $1300+ | Guarantted |
- Best coins are launched on polkastarter
- How to use Launchpads?
- Most of the times the price never goes to the launchpad price
- Long term investing
- Spherium has an IDO of $0.195 and is trading at $0.1 now()
- Top IDO performances
- Superfarm - $0.025 (IDO) - $4.74(Launch) - $1.18(today)
- Polylastic - $0.003 (IDO) - $0.9(Launch) - $0.0004(today)
- Ethernity chain - $0.27(IDO) - $74(Launch) - $9.46(today)
- Refinable - $0.03(IDO) - $10(Launch) - $0.2544(today)
- BSCPAD - $0.02(IDO) - $7.45(Launch) - $1.31(today)
- Metaverse
- What is Metaverse ?
- Metaverse tokens by marketcap is 40B as of
- Virtual Reality - users interacting in 3D virtual world
- Puts in touch with other users in 3D world
- Augmented Reality - bridge between physical and virtual world
- Revolutionalize life - jobs/training, social events and gaming at home
- NFTs - Avatars, assets, digital land, characters
- Immersive virtual worlds - sandbox/decentraland
- Why are Metaverse crypto hot ?
- Mass market appeal - gaming, simulations, customisable world
- Bringing life to digital assets - land, avatars, NFTs, crypto money
- Generation Z appeal
- mainstream shift - facebook rebrand to meta
- key narrative for bridging real-life with crypto
- Top 5 Metaverse in 2021
- Metawars - 100x
- Wilder world - 110x
- StarAtlas - 188x
- Gamezone - 220x
- Axie Infinity - 326x
- Why to look for when investing
- VR/AR environment mixed with gaming, DeFi and or NFT integration
- Game = easy game play, crypto money integration, people should understand the way to earn money, addictive, replicates established game
- Easily play and earn
- Low competition and high demand area
- First game in Solana
- simplistic game play
- Ultra low market cap - Get in 50k to 300k,
- Velhalla - IDO
- What is Metaverse ?
- Researching
- https://cryptoinsider.media/
- Basic Attention Token - Blockchain based digital advertising platform
- Founder of firefox
- quite a number of selling point
- Facebook groups
- Steam articles
- Investment Systems
- Coin cap types
- Large cap coin - 10B
- Mid cap - $200M
- Small cap < $200M
- What are the top criteria for investing ?
- Type of cryptocurrency
- What is the pain that this solves ?
- What is the scale of the pain ?
- How unique is the solution ?
- Can this have a first mover advantage?
- Team
- Superstar?
- Well connected ?
- Enough developers for the vision ?
- Technology ?
- What does the tech achieve ?
- What is unique about the tech ?
- What effectiveness does it have over existing tech ?
- Does the team have experience/skills to achieve ?
- Is there a MVP/Github and test results ?
- How to get profits for investment ?
- What is the roadmap ?
- How regular are updates/items?
- How significant are updates?
- Are they likely to release regular value ?
- Min 1 update per quarter
- When are they likely to list on a cex?
- Token Metrics
- Emotion and Data drive the crypto value
- Is cryptocurrency undervalued ?
- Market cap analysis - much cheaper than competition ?
- Coin supply vs potential demand
- Does it meet my coin supply sweet spot ? - 500 million coins in circulation
- What is the multiplier that gets a coin to become a biggie?
- Token rewards ?
- What rewards do you have by being a member of the platform ?
- What makes people to hold the tokens?
- Do they offer master node/staking rewards ?
- Does number of tokens lead to power?
- Can you earn rewards for actions ?
- Community
- Size of social media presence - TG/FB/Twitter/YT
- High team interaction - Telegram. slack, discord
- Quality - Engagd, holders
- Forums - Reddit
- Hype level
- Coin cap types
- Main buying strategies
- Pump and Dump
- Long term investing
- Look carefully at the community
- Think about what you can make from the blips
- Coin has long term potential
- Market news is prosperous
- Playing the Market!
- Mixture of buy and hold + Pump and dumps
- How to reach when your investment loses money
- Can you stick with the holdings when there is a market crash ?
- When the value goes down, then it is a good time to go shopping ?
- How to cash out ?
- Send to BTC wallet to cex and then withdraw from the cex
- Meme coins
- Meme coins are the biggest currencies of the cryto population
- Meme coin is a joke or a novelty coin with no intrinsic or fundamental value
- Doge coin was founded in 2013 as a joke
- Depict meme on coin face - dog/cat breeds, animals, pop culture
- Value is it’s ease - understanding/explaining/adoption
- very speculative in value - easy to create and market
- successful in short term and dicey in long term
- typical hold of shibu is about 20 days
- For every superhero winner, there are tons of losers
- There are 279 meme coins as of and a market cap of 43B dollars
- NFT market as of is $57B
- Why are meme coins hot ?
- One can buy millions of these coins and feels good
- Lot of greed and hence scope of insane ups and downs
- No VCs, institutional investors, open distribution and no research required
- strong sense of social or community drive
- Why meme coins are not hot ?
- rug pull
- short self life - make gains at first, growth dies and people move on
- lack of fundamentals/substance - only communities support price
- How to invest ?
- Strong brand - Doge, animal, public figure, tv show, symbol
- <1M USD market cap
- uniqueness - new chain, evolve a popular idea
- Risk mitigation - no migrator code, audit
- multi-narrative - NFTs, gamefi, metaverse
- shiba is diversifying in to its own Blockchain, gaming, swap exchange - They are building on the top of meme coin
- LUCK plays a big part
- DeFi
- There are about 500 coins as of with a market cap of $180B USD
- Apps or platforms are providing traditional financial services
- Lending - getting an % APR/Yield for locking tokens
- Borrowing/insurance/trading/exchanges are all covered
- Opening finance to all
- DeFi successes in 2020
- RSR
- UMA
- Yearn finance
- AAVE
- Band
- Why are DeFi coins are hot ?
- There has been a DeFi boom
- Lending and borrowing platforms guarantee money
- Compound, Yearn Finance and Lend - new and entered top 30 crypto currencies
- Yield farming - give a great return as compared to Proof of Staking coins
- Where to buy DeFi coins ?
- Uniswap is a dex, can be called for binance for decentralized coins
- Uniswap is an ERC-20 exchange
- Need not comply with regulations. People within Ethereum wallet can swap with other tokens
- How to reduce gas prices ?
- Customize the gas on metamask wallet
- Yield Farming
- Earning crypto by locking up or lending your money
- Finding farms(pools) with best crops
- https://yieldfarming.info/
- Very big and risky game
- liquidity mining - higher return than staking
- everything is done via smart contracts
- Benefits of Yield farming
- Extremely high rewards
- Removes the headache of trading and investing
- passive income generator in turbo mode
- Rewards are paid in real time(day/week/year)
- No lock periods, easy money mobility
- smart contract led means convenience and safety
- constant opportunity - 5 new farms a day
- multiple compounding streams of income
- open to all
- Limitations of Yield farming
- Extremely high risk of loss - untested/bugs/pools/hacks
- pool can be shut down suddenly and then the yield can go down to 0
- extremely high gas fees since it is on ethereum network. Pay a lot to interact with the smart contract
- very difficult processes involved in yield farming as compared to staking
- often a 10 to 30 step process
- No real safety net - It is completely unregulated
- tracking - unstable, hard to profit, maintain and move your money
- whales game - elitist
- minimal to no transparency or clarity within pools
- various number of token swaps in the process and you pay a lot of fees
- small or new space - unpredictable platforms
- Crazy return stories
- whale version - $73k a day by locking $675 k per day
- yearnfinance - retail - lock up $2k to make $50 a day - $ 18250 per year
- Yield farming index : https://coinmarketcap.com/yield-farming/
- Where is the space going ?
- Risk associated with DeFi
- CeFi is offering rewards of DeFi but with centralized vetting process
- CeFi might have lesser awards than yield farming on DeFi
- CeDeFi is some combination of CeFi and DeFi
- NFT
- Non fungible token based on ERC721 and ERC1155 tokens
- Most crypto tokens are fungible
- NFTs are one-offs - original, rare, special, unique value
- Art, cards, characters, tickets ,domains
- used for speculating, trading and investing
- Why are NFTs are hot ?
- NFT trading replicates real-world collectible investing
- LTV locked
- https://defillama.com/ - TVL 245 Billion USD
- Blockchain - ownership and transaction abilities
- Type of yield farming
- opensea, raribles, mintables
- Different NFT platforms
- Opensea
- Rarible
- Mintable
- Enjin
- Wax
- Meme
- Yield farming on NFT platforms
- Technical analysis using coinigy
- Use MACD to identify bear or bull market signs(W pattern or M pattern)
- Fibonacci retracement to find the entry and exit strategies
- Support and resistance levels for entry and exit signals
- Candle sticks - Hammer, hanging man
- Trend lines
- Categories
- Infrastructures
- Transaction speed, building dapps, decentralization
- Blockchain
- Non-Blockchain
- Dapp actions, value transfer
- Privacy coins
- Hide identities behind transactions
- Normally transacted over untraceable network
- Can be used for unorthodox/dark web
- High usage and transaction framework - Monero, dash
- IoT/Supply chain
- Help companies manage data, inventory, quality, authenticity
- IOTA
- Prevent scams
- Value - what pain point is being solved?
- Currencies
- Value transfer
- Paying for services
- Converting crypto to fiat
- Platform/Dapps
- Decentralized apps
- Decentralizing and monetising traditional services
- Can be long term or seasonal
- Infrastructures
- Blockchain governance
- Proof of work
- Proof of Stake
- Masternodes
- Delegated Proof of Stake
- Proof of Authority
- Proof of caring
- Proof of importance
- Proof of weak hands
- Proof of storage
- ICO
Links mentioned
- https://www.coinigy.com/
- https://defillama.com/
- https://yieldfarming.info/
- https://cryptoinsider.media/
- https://cryptorank.io/
- Coin Research Websites:
- Centralised Exchanges:
- Spot exchange index: https://coinmarketcap.com/rankings/exchanges/
- https://www.binance.com/
- https://www.binance.us/ (for US customers)
- https://www.coinbase.com/
- https://www.gate.io/
- https://www.kucoin.com/
- https://ftx.com/
- Decentralised Exchanges
- Ethereum: https://app.uniswap.org/#/swap
- Binance Smart Chain: https://pancakeswap.finance/
- Solana Tokens: https://raydium.io/swap/
- Technical Analysis Chart
- Sentiment Graph (Euphoria & Dispair)
- Altcoin Season graph
- Venture Capitalists & Institutional Investors
- https://www.dextools.io/app/
Takeaway
I have gone through most of the videos knowing fully well that one should not follow the investment advice of such channels. The content is useful to an understanding of what other people think or other people want others to think in crypto space. I think more than anything else, going through the content gives a good list of links that are usually followed by people in the cryto space. For a complete beginner in this space, the course content is not bad. If you leave away the crappy parts of the video series, one can get a cursory understanding of the crypto investing world