I could really use your help. I’ve been following this forum for about a year and I’m quite interested in FIRE, especially the FI part.
Until now, my investing has been pretty traditional (mostly Vanguard funds) and I’ve often been critical of cryptocurrencies mainly because I don’t fully get it.
Recently, I’ve decided to invest a small amount (around £500) in crypto soon after seeing some returns and reading articles about crypto in The Economist. This amount is something I can afford to lose if needed. Although crypto is still a hot topic, this investment is under 1% of my portfolio, so I’m okay with the risks.
Before jumping in, I want to learn more, and that’s where I’d appreciate your help:
Can anyone share some trustworthy information about crypto?
Any recommendations on which cryptocurrencies to invest in and why?
Where is the best place to buy them, and do I need a wallet?
It’s really important to keep your crypto information private. If you post about it, don’t engage with any direct messages since they might be scams.
Make sure to research your investments carefully. Many cryptocurrencies are risky and may not succeed.
For beginners, Coinbase is a decent exchange. They offer around £30-40 worth of free crypto in their rewards program, though it’s mostly lower quality coins. You can swap them for more established cryptocurrencies like Bitcoin and Ethereum.
Hi there, this topic might not sit well here since some folks aren’t keen on crypto. I mostly stick with traditional investments (primarily S&S ISA) too but have a small share in crypto that has performed well.
I usually get my crypto insights from YouTube, especially from https://youtube.com/c/CoinBureau. They’re UK-based and offer good info even if some parts can be technical.
People often say do your own research. The two main coins to look at are Bitcoin and Ethereum. They’re both pretty stable in my opinion, but I believe Ethereum has more growth potential than Bitcoin. Other options like Solana and Polkadot come with higher risks. Look into projects that resonate with you.
For exchanges, I use Crypto.com because they offer a debit card with a 1% cashback on purchases. But I wouldn’t bother with a wallet for your £500 investment—it’d cost £50 to £100 or more. Other exchanges might be better, but you’ll find plenty of articles and videos discussing this.
Crypto is still in its early days; only around 2% of people globally own crypto, so there’s time for growth. Don’t invest recklessly and definitely don’t rush into buying coins just because you see them doing well. Crypto can be very unpredictable which can be stressful if you’re constantly checking prices. I typically invest and try to check as little as possible.
Like any investment, only invest what you can afford to lose. While I think there’s potential for profit, there’s always a risk that crypto could fail.
@Cove
I’m curious about your statement that Bitcoin is unlikely to progress. It’s up 40% this month. Sure, you can buy early on smaller coins and get huge returns, but that feels more like gambling. You could say that all of crypto is risky, but this discussion is about crypto.
@Kennedy
I don’t have all the answers but here’s my take. I think crypto and blockchain are here to stay, and Bitcoin is the leader. Limited supply and being the first in the space makes me think the price will rise over time. Many see it as ‘digital gold.’ I’m not invested in Bitcoin myself as I’m focused on trying to make money with other coins that may have more growth potential. More institutions are adding Bitcoin to their holdings, which could drive the price up significantly.
@Cove
Great summary you provided! Just a quick note, Crypto.com has higher fees and spreads. You might want to look into Gemini, which is one of the more trusted exchanges approved by the FCA. They offer 10 free withdrawals each month, which saves you money if you’re buying established coins.
@Cove
Interesting you chose Crypto.com instead of other platforms like Coinbase, Binance, or Kraken. I’ve heard they struggle with capital gains tax calculations. Coinbase, Binance, and Kraken can connect to tax calculators like Koinly to streamline the process. How do you handle the tax implications of each debit card transaction since they count as taxable events? I’m cautious about using crypto debit cards for this reason.
@Zade
Honestly, I only went with Crypto.com because a friend recommended it. So far, it’s been great and the interface is user-friendly. As for taxes, I’m not too knowledgeable about crypto tax matters, but I recently learned Crypto.com expanded their tax reporting services to the UK. https://www.reddit.com/comments/pwcn82
@Cove
It’s important to note that each time you use a crypto debit card, it’s a taxable event under capital gains tax. You need to track these yourself and report them if you go over the tax-free threshold. It’s different from using a normal debit card.
@Kennedy
Cash back from a credit card is not taxable. I’m unsure if HMRC views cashback from a crypto debit card similarly. It might be treated as income instead, but that’s still up for debate.
Regardless, spending crypto using a debit card counts as ‘disposing’ of it, triggering taxable events. If the crypto value was higher when you spent it compared to when you bought it, you may owe capital gains tax.
Consider reading these books: Inventing Bitcoin, Layered Money, and The Bitcoin Standard.
Watch these YouTube channels:
Finematics
Coin Bureau
The Defiant
Listen to these podcasts:
What Bitcoin Did
Bankless
Blockcrunch
Modern Finance
Pomp Podcast
Keep it easy to start with Bitcoin first. After that, explore Ethereum and Solana.
I use Binance, but consider options like Crypto.com, Coinbase, and Kraken. Begin by purchasing on an exchange but later learn about wallets, as it’s safer to manage your own crypto. Consider hardware wallets like Trezor or Ledger.
Everyone thinks they know everything during a market upswing, so take advice lightly. Expect to ride out a fluctuating market over four years. Stay strong and don’t panic-sell during downturns. Engage with crypto beyond just investing; look into DeFi for example. Explore Nexo or Celsius for better interest rates on stablecoins. Always do your own research.
Caiden said: @Junita
Could you explain what this four-year cycle refers to? Is it related to the ‘halving’ event?
Every four years, the Bitcoin mined per verified block is cut in half. This reduction tends to create a deflationary impact and often marks the beginning of a surge in prices. Eventually, the market reaches a peak and may decline into a sideways or downward trend until the next halving. That’s my basic understanding, and I hope it helps.
Caiden said: @Junita
Could you explain what this four-year cycle refers to? Is it related to the ‘halving’ event?
Exactly. It usually implies experiencing a significant market rise like right now and then a downturn. If you can endure it, you’ll gain a lot of insights. Just don’t sell in a panic during the drops.