21 Things I've Learned From My First Year in Crypto (2021)

Long time lurker, first time poster. Hello!

I feel like it's time to contribute and engage a little more with the CC community, so here I am. Hi!

To kick things off, I thought I would share a great big "what I've learned so far" post. :) It's a long one FYI, you've been warned.

When I was starting out in crypto, a few substantive posts from experienced crypto Redditors were helpful to me, so I thought I would do something similar and pay it forward a bit. (Even though it still feels like I'm just starting out, as you'll see below.)

Anyway, most of this isn't rocket science or new information for y'all, but I still hope it's helpful. (Or at least, good for a laugh.) It feels good to reflect back on this crazy year in crypto, too. Maybe I'll do a Part 2 next year or something.

EDIT: Okay okay, TL;DR LOL: HODL, it'll pay off long-term. Trust yourself. Do your own research. Google that shit. Breathe. It's all just a game, enjoy the ride. Diversify. Buy the Dips. Invest smaller amounts. DCA + but have fun shopping. Track your portfolio data. Get a hardware wallet. Spread out your crypto. Coinbase blows, but get on Coinbase Pro. Tighten your online security. Taxes?? LOL. Don't compare yourself to others. Don't trust strangers on the internet like me. :) Be kind.

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Preface & Disclaimers

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• First off, I am a HODLer, not a day trader. So my thoughts below are geared towards that approach. Bless all y'all who are more active traders. That's just not for me. Also, I'm based in the U.S., so my experience is based on that country.
• I've been investing in crypto since wayyyy back in early spring 2021. LOL. That makes me some kind of crypto grandmaster by now, right? (Time works real different around these parts...)
• Just kidding, I'm still just getting started. But I did give myself an intensive crash course on all things crypto in the spring and learned a ton very quickly. It was so exciting. And complicated. And nuts. LOL. This year I also experienced BTC's big ATH in the spring, the big crash of the summer (thanks, Elon and China), the turbulent fall, the new fall ATHs, and whatever the heck is happening now, LOL. Whew. So I feel like I at least have my "beginner's crypto certificate" or "baby's first dip & ATH cycle" sticker or something. Maybe? Who knows. LOL.
• Many of you are much more experienced than I am. Or you have a different approach to crypto. Rock on. You're great. Keep it going. Feel free to add your thoughts and insights below. I admit I feel like I'm just scratching the surface here. But maybe some of my thoughts here will be helpful for newer folks starting out. Welcome. Either way, this is the internet and we all get to take up a little space, so here I am.
• This is not financial advice, of course. Always do your own research (DYOR) and make your own decisions (MYOD?) based on your own circumstances, preferences, risk tolerance, etc. You know yourself better than any stranger on the internet. Take everything with a grain of salt. Including me.
• Also full disclosure: I have not done a ton with DEXes or DeFi yet. Maybe that'll be a project for next year. For now, as a simple HODLer, I feel like I've gotten a decent handle on centralized exchanges, trading, hot and cold wallets, basic staking, following news and prices, learning about the crypto space in general, etc. And I'm getting what I need from all that for now.
• I'm also not here to shill any particular coins or websites or platforms. These are just a few thoughts and ideas from my own experience so far. Again, maybe it'll be helpful for newer folks.

Okay, now on to the fun stuff!

A Quick Funny Story

Apparently I opened a bitcoin wallet back in 2011 and totally forgot about it until this year. Turns out, I never actually bought any bitcoin with it. Ughhhhh. [womp womp... cue sad trombone music]

But man, can you imagine? Even if I had picked up just a couple BTC back then on a whim, it would have been like finding buried treasure today. So... lesson learned. I don't plan to repeat that mistake again, which is why I'm putting some fiat into crypto now.

In 2030, I'll be so thankful I did. :)

(Or I'll be broke. TBD.)

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General Thoughts & Getting Started in Crypto

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1. I believe that crypto and blockchain tech will continue to play more prominent roles in society and our economy in the decades ahead. So my approach is not to "get rich quick" by investing in crypto, but to get in on this powerful emerging industry now while it's still young. (a.k.a. "get rich... eventually?") As I said above, I'm a HODLer, not a day trader. I believe us HODLers will do VERY well, given a few years and a little patience. (At least, that's the hope if you believe all the price predictions and hype). And yes, I hope that in 3-5 years or so my crypto portfolio will allow for some exciting new financial possibilities for me. I'll let you know.
2. Google ANY question you have about crypto. That's how I learned when I was getting started. I literally Googled everything from "what is staking?" and "how to place a limit order?" to "what's a cold wallet?" and "how to earn free crypto?" No question is too stupid (and this stuff is complicated!) There's no crypto instruction manual that everyone gets, and the terminology can be really confusing for noobs. Especially when the stakes feel really high and one mistake could cost you real money. Thankfully Google doesn't judge. Just remember that everyone has an agenda and is trying to sell you something or scam you, so take everything you see with a grain of salt.
3. Find Your Resources. There are lots of sites out there that share helpful articles for beginners: Investopedia, TechRadar, CNBC, CNet, MotleyFool, and even the New York Times. Some of the key crypto news sites include: Coindesk, Cointelegraph, The Block, Decrypt, DailyHodl, Glassnode, CoinMarketCap, CoinGecko, Messari, among others. And podcasts like Unchained with Laura Shin, CoinDesk's Money Reimagined, The Scoop with Frank Chaparro, The Breakdown w Nathaniel Whittemore (NLW), and others, are great as well. And of course Twitter and YouTube and all the rest. Find the resources that fit your style and needs and go to town! It takes time to absorb all the terminology and players and info, but you'll catch on quick.
4. Breathe. It can feel overwhelming and overstimulating when getting started with crypto. I basically didn't sleep during my first couple weeks as I went down the crypto rabbit hole. And my poor friends caught an earful from me. (Shhh, the first rule of crypto is don't talk about crypto... unless it's to everyone you know.) There's just so much. This stuff is insane and it feels like a cross between The Matrix and Alice in Wonderland and a cult and a casino and a frat house and a fart joke. So just remember to breathe. Go for a walk. Check yourself and calm your nervous system. Care for your well-being, your health, your relationships, your life. Crypto will still be there after you go to yoga and hug your kids goodnight. I feel much calmer about crypto now, but for the first couple months I thought I was going insane. I guess that's normal? I still check the prices several times a day, even when I'm not actively buying. Whyyyyy? There was a great article I saw on Coindesk (?) this summer about folks who feel addicted to crypto. It's a real thing, so please take care of yourself. Just like gambling or sports it can trigger real psychological and physiological responses. Remember to unplug once in a while, Neo. Breathe. You can't access your cold storage wallet if you're in cold storage yourself.

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Playing the "Game"

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1. Get comfortable with the roller coaster. It's all just a big game. By only investing what you can afford to lose (see below), it won't be as stressful for you when the prices crash. And they WILL CRASH. Probably again next week. LOL. It's just part of the game. I spent much of this year with my portfolio down 30-40%. So what? I wasn't going to sell, so it didn't phase me too much. By this fall, I was up again: 50% from my original investment, then 60%, then 70%. Whee. When it's down, buy the dip. It'll come back up eventually. Always does. When it's up, enjoy all the sweet, sweet dollars in your portfolio, you smart crypto daddy. Rinse, repeat.
2. I sometimes visualize the ups and downs like I'm riding a giant ski lift or some crazy escalator that goes up and down the hills across the countryside. When you're in the valleys, you can load up on more supplies. When you're at the peaks, you get to enjoy the view. Maybe off-load some of your bags to take a look around when you're up there, or not. It's all just a game. Up and down and up and down. Have fun with it.

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Investing & Trading

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1. You hear this a lot, I know I know, but it bears repeating: DO NOT invest more than you can afford to lose. Really. Personally, I want this experience to be exciting and fun, not stressful and anxiety-provoking. Sure, I could get bigger returns if I put more cash into crypto, but I could also be totally screwed if the market crashes and I suddenly need the money (e.g., car accidents happen, health problems arise, life finds a way, etc.). Shit happens, and I don't want to be in a bad situation financially. So when I started, I set myself a hard cap of how much I was willing to invest this year. Once I blew right past that (LOL), I set myself another hard cap, but this time I really tried to hold myself to that amount. If I lose everything I've invested, yes it would totally suck, but I won't lose my home and I could still feed myself and so on. Everything in moderation, friends. Even crypto. I know, wuuut? (Again I know everyone has their own relationship with crypto... so, you do you. But this is my approach and it works for me.)
2. Diversify. My portfolio is about 60-65% BTC and ETH, and about 35-40% altcoins. For me, this feels like a good balance of the "blue chip" mainstays of BTC and ETH and the more volatile altcoins with lower market caps. Just like a traditional investment portfolio, I feel like a diversified approach to crypto makes sense for the long term. You never know which alt may moon suddenly or die off, or which sector (DeFi, NFTs, smart contracts, different blockchains, etc) may do well or not. Plus who knows what news will come out next week that will light a coin on fire randomly (for better or worse). So, to balance some of that risk and unpredictability, it's good to spread things out a bit. Find the balance that works for you. In general, most of the market moves together anyway, but with diversification you can balance out the swings a bit. Again, this is not financial advice. You do you.
3. Buy those Dips. I like to think of it like a sale on your favorite shoes or video game or whatever you wanna buy. Why not wait for the 50% off! sale and pick up some more then? Ignore all the FUD and freaking out online and in the media that happens whenever the market drops. And don't worry too much about your overall portfolio value when it's down. No need to panic when prices crash. Or to freak out when it rebounds because you "missed the dip." All time highs (ATHs) always pull back. And dips eventually stop dipping. Patience, young padawan. Patience. Wait long enough and whatever you want (or fear) will happen. It's all part of the game. And it's a long game.
4. Invest smaller amounts. Don't blow your whole wad at once, Chad. I learned this the hard way this summer. The dip came, and then came again, and again, and then kept on coming. And then it dipped once more just for good measure. (So much dip. So many wads.) Whatever amount you want to put into a coin right now, cut it in half or into quarters and spread it out. Buy a little at a time. When you average out the cost, you'll do fine, even if it goes back up.
5. Dollar Cost Averaging (DCA) is great. Yes, absolutely. But I also don't think it's very fun. LOL. Every week or every month, on a schedule, you just buy with the same $ amounts? Zzzzzzzzz. Where's the sport? Part of the fun of crypto for me is trying to grab the deals when the price dips. So personally, I prefer a kind of blended approach of DCA + Buying The Dip + Lowering my Average Cost per Coin when I can. If I know I have X dollars to spend this month on Y coin, I'll try to wait for the dips and put it in then. Or set those limit orders and sleep well. Or I might put a little less in when it's higher, and put a little more when it's lower. That kind of thing. It all averages out in the end. But by not keeping to a super strict schedule I get to have more fun along the way and go shopping during the dips. Maybe we can call it Dip-Oriented Fun Cost Averaging (DOFCA) or something. Or nah, maybe it's just BTFD LOL. Same thing.
6. Track your stuff. In addition to using apps like FTX (formerly Blockfolio) to keep track of all trades in one place, I also keep a few spreadsheets to track my fiat investments going into crypto. I track things like how much I've invested per month into which coins, number of coins, percentage invested in each coin, notes and reminders, etc. That way I always have an overview snapshot of how much fiat I've invested so far and where it's going in my portfolio. That helps me keep things in perspective. I also use the data to play fantasy math and estimate how much my portfolio will be worth if my coins double, or 5X, 10X, 20X, and so on, which is also fun. (It also goes without saying, do not store any of your passwords or actual account numbers or locations online with this stuff.)

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Wallets & Exchanges

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1. Invest in a hardware wallet. Like I said, I'm a HODLer, and I knew that's what I wanted to be. (Ever since I was a wee lad.) So even when I was just getting started this year, I knew I was in it for the long haul and wanted to keep my crypto safe -- especially as prices go up and I invest even more down the line. So a couple hundred bucks invested in cold storage wallets now will protect my lambo deposits in the future. It's worth it, imho. Just remember to keep it secret and safe and don't share your pass phrases with anyone or store them online anywhere.
2. Spread out your crypto across different wallets and exchanges. Just like diversifying your portfolio with different coins, by spreading your crypto across different locations you mitigate some of the risks should something bad happen to one wallet or exchange, etc. Keep a little on exchanges for short-term transactions and such. Keep some in hot wallets and earn that sweet staking interest. Keep your long-term stash in your cold wallets. Always keep your private keys offline and private and safe. (I'm sure folks also have hot tips about liquidity exchanges and lending your crypto out and maximizing interest and all that, too. Go to town.)
3. For the love of god, create brand new email addresses for any centralized exchanges or accounts you sign up for. Then do not use those emails for anything else, ever. Long story, but trust me. It's one of the many small steps you can take to improve your online security, in case your personal email addresses ever get hacked or leaked -- because you forgot to secure your MySpace or Pinterest password from 10 years ago, etc. There are many more things you can do to improve your personal online security (e.g., 2FA everything, don't use public wifi, don't share passwords across accounts, use malware scanners, VPNs, etc. etc.). Google that shit and take all necessary precautions. This is crypto, folks. It's time to tighten up our shit.
4. Coinbase has astoundingly bad customer service. I had heard about this as I was getting started, and they did not disappoint. I got to experience it first hand myself. And OMG, you guys, it's so bad. So, do whatever you can to protect yourself and minimize your exposure to needing help from them. Woof. Eventually things got sorted out in my case, but it literally took months. Others aren't so lucky. You've been warned.
5. That said, if you're a Coinbase user, get on Coinbase Pro ASAP. CB is a fine place to start, since the interface is very beginner friendly (customer service aside). But if you're going to be a frequent trader, you'll want the lower fees on CBP or on other exchanges. They add up fast. I had never used a "trading platform" before, so I was a little intimidated by the CBP UI at first, but after just a couple days of watching YT videos and reading a few articles on trading, I figured it all out pretty quickly. It's not that hard. You can, too. And you'll save a bunch of money on trades. Plus it's free to xfer coins between your CB and CBP accounts so you can use both as needed. (There are also other exchanges with cheaper fees out there, for sure. Everyone has thoughts on their favs, no doubt.) After that, Binance, Kraken, Gemini, and the other centralized exchanges are similar, if not even easier to use in some cases.

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Taxes

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1. LOL. Just kidding.
2. But seriously, one of the reasons I'm a HODLer and not a day trader is to avoid all the mess of dealing with the high capital gains taxes that ensue with frequent trading. Remember: anytime you sell or exchange a coin, that's a taxable event (in the U.S. it is anyway). Tracking all that seems like a nightmare. Im just not interested in that headache. (Honestly, how do y'all traders deal with that? Doesn't it cut into your profits EOY? Is it still worthwhile in the end? Genuinely curious how you still come out ahead, if you do. I think I also just saw someone post some data in this sub that reiterated how hard it is to come out ahead with day trading. There you go.)
3. Nor am I interested in trying to evade taxes when Uncle Sam's just going to come calling in a few years anyway. Not worth it, imho. (I know many of y'all have a different perspective on all that. This is crypto after all. More power to you!) So anyway, I'll hold at least until I pass my short-term capital gains tax thresholds (1 year, here in the U.S.), and then I might think about selling some coins as needed. [also this is not tax advice. consult with your tax advisor.] But also... if you look at coins that have finally mooned, sometimes their prices were stupid low for YEARS before they took off. So like... why would I sell any of my future moon babies just because they haven't mooned... YET? I'm not confident enough in predicting which of my alts might be the next ETH or SOL or whatever in a few years. You never know. So for now, I HODL. ;)

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Keep Your Perspective

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1. With crypto, ANYTHING can happen. And it will. For real real. Think the price of your favorite coin "couldn't possibly" plunge back down to XYZ level that it hasn't seen in months? Just wait a couple weeks. It will. (What's up, every coin in June 2021.) Or vice versa... Think your favorite coin that has been below $25 for weeks couldn't possibly spike to over $200 or more? Just wait a couple weeks. It will. (What's up, Solana.) Limit orders are great. Set 'em and forget 'em. No need to stress. Crypto is insane and fickle and unregulated and has a mind of its own. You gotta know that if you're gonna play the game.
2. There will ALWAYS be people who got in on BTC/ETH/SOL/whatever coin when it was below $100. Just like there will ALWAYS be people who got in at $64K or higher. Don't sweat it. It's not a race and no one is winning. (Unless lambo, obvi. LOL). Ten years from now, or even next year, you'll look back and shake your head at how cheap the prices were today. The best time to invest was yesterday. The second best time to invest is now. Keep some cash on hand (or dry powder, as the cool kids from 1812 say) to buy the dips. You'll gradually lower your average cost per coin as you go. You can't go back in time, but thanks to the dips, sometimes you can still get yesterday's prices.
3. Finally, know your situation and don't listen to strangers on the internet. Y'all are nuts, you know that, right? LOL. The amount of junk and FUD and shilling and hysteria is really quite something here on the interwebs. My take? Ignore most of it, and take the rest with a grain of salt. Trust yourself to know what feels right for you. You're doing just fine. Don't panic when the FUDers say "panic!" and don't gloat (too much) when you're doing well. DYOR and make choices that are right for YOU, not what us goofy Redditors say. You get to decide how to measure your own success. If you can only afford to put $10 into crypto, great! If you can afford $10,000, good for you! Don't compare your situation to others. Don't idolize the whales or look down your nose at the minnows. There will always be bigger (and smaller) fish than you. So what? Anything can happen to anyone. Oh also, please don't be a dick or take advantage of others. That's just not very nice. We're all in this thing together, and everyone's doing the best they can.

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Okay that's it for now. Whew. That was a lot. And still it feels like I just barely scratched the surface. Thanks for reading all this way. Hope it was helpful for you... or at least an enjoyable few minutes.

Questions? Comments? Funny funny bits? Throw 'em down below. Let's goooooo.

In the meantime, happy HODLing. Have fun and enjoy the ride...

To the moooooooon,

SCA69