Bitcoin, Cryptocurrency, Alts, Memes??

Christopher Mills
December 1, 2024

On this blog, I've stayed away from this area of investing for the most part because of how speculative it has been and my aim has never been to try and hype up this new-age stuff. But, having been in the space since around 2009/2010 when Bitcoin was launched, I've seen a lot and I feel that now is perhaps the time to bring the topic up for discussion. Before I dive into things, I'd like to say that this is a highly speculative area, meaning that if you decide to invest in any of these coins, there's a high risk attached which means you could lose your money, and literally within a few hours! Please, do your own research and be really careful, we're not about gambling on 100MPM.

Perhaps, the best way to start things off is speaking about myself and my experience thus far. This would be my attempt to be transparent, and give you an idea of where my stance is coming from.

My first purchase of Bitcoin was when Bitcoin was selling for around R3,000 ($166) per coin. Back then, my access to capital was low, and I wasn't able to buy as much as I would have liked to. That said, I bought a fair number of coins, I can't recall exactly how many, but it was in the region of 50 to 100. Over the years, I bought and sold the coins, which the most substantial sell being to buy our home. Sure, if I'd taken a mortgage instead, I'd have a boat load of money right now but at the time it was the right move and I have no regret - I love my home and having a paid off house is incredible. When ETH (Ethereum) entered the world, I bought a fair number of the coins, and this was followed by purchases of coins such as XRP, SOL, ADA and a string of other ones. I've never sold a Bitcoin since the home purchase, and every other coin I've purchased, I've held. My stance is one of long term investing, not guessing the high's and low's, and trying to trade on a gut feel - I don't like gambling.

So, what did I learn along the way, and what's my stance? Well, for a number of years, I was a huge advocate for cryptocurrency being 5% of one's portfolio. When I say, cryptocurrency, I'm really referring to Bitcoin at the end of the day. One could take that 5% and break it up into 4% Bitcoin and 1% more speculative coins. But, the idea was to set a ceiling of 5% of investments and that's that. Why? Well, if you lose that 5%, you shouldn't cause yourself a huge financial problem. However, over the last couple of years, I've started advocating for a crypto holding of 10% of one's investment holdings rather than 5%. I adjusted my belief based on the adoption of crypto by large corporations, countries, governments and people that I trust and know have a great understanding of all of this.

How to buy crypto?

Obviously, I'm not writing this post to just share my story, I want to assist you in how to buy some crypto because that's still a great mystery for many people and it shouldn't be. Everyone should be able to invest in crypto! And, I believe we're only at the beginning, all my reading suggests a lot more upside but please do your own research.

My number one place to purchase the likes of Bitcoin, Ethereum and other popular large-cap coins is Luno (affiliate link, I get R200 if you sign up and invest). I do not push Luno because of the affiliate commision, the majority of my holdings are with Luno. I have a friend who works high up in the company and I've learned enough about the company to trust it over the other ones. With that being said, the likes of EasyEquities, and VALR are great options too, both of which I have extensive experience and know enough people who are invested with them.

So, if you're in a position where you want to buy Bitcoin and need a hand, here are the steps:

  1. Head on over to the Luno website.
  2. Click on "Create account"
  3. Follow the steps, you'll need to choose a username and password, complete some paperwork and so forth, but don't worry, Luno guides you through it.
  4. Once your account is open, you need to navigate to "Wallets".
  5. Locate your "ZAR Wallet", this is where you put your Rands.
  6. Select the option to "Deposit" and follow the instructions. You're essentially going to transfer Rands from your normal bank account to Luno.
  7. Once you're done, your Rands will appear in your ZAR wallet.
  8. At this point, it's time to buy Bitcoin.
  9. Click through to "Wallets" again, and this time click on, "Buy".
  10. Here there are two options, "Crypto" or "Bundles" - you'll have to decide for yourself, but we're talking about Bitcoin now, so we'll select, "Crypto".
  11. Select, "Bitcoin" on the next screen and then choose "Once off", unless you want to "Repeat buy" but I'd recommend "Once off".
  12. Next, select to buy from your ZAR wallet, where you deposited your Rands.
  13. Choose the amount of Rands you want to spend.
  14. That's it, you are now a Bitcoin holder, well done!

That's a laboured explanation, but I wanted to cover as many points as possible.

What's Next?

If you've read about crypto, you'll have heard of storage/wallets/hot/cold, and this is where things get more complicated. You can most certainly leave your Bitcoin with Luno, their security is top-notch (I know for a fact), but it's not perfect, so you could move your Bitcoin from Luno onto a hardware wallet, which is like a USB Drive. My concern here is that USB drives go missing, passkeys get lost, and I feel all of this has more chance of having a problem than what might happen to Luno, so I'm comfortable having Luno hold my coins, I have not moved my coins away, but this is something you need to decide on.

However, if a cold wallet makes sense to you, then definitely go with that. Here are some advantages and disadvantages:

Advantages of a Cold Wallet:

  • Enhanced Security: Not being connected to the internet makes cold wallets immune to online hacks.
  • Long-term Storage: Ideal for holding assets for extended periods without frequent access.
  • Control: Owners have complete control over their private keys.

Disadvantages:

  • Convenience: Less convenient for frequent transactions compared to hot wallets.
  • Physical Risk: Loss, theft, or damage to the cold wallet (e.g., misplacing a hardware wallet or paper wallet) can result in losing access to funds.
  • Technical Knowledge: Requires understanding of how to use and secure them properly.

As I've said, I'm very comfortable with Luno holding my coins, so that's my current position. However, with some other exchanges, I do export my coins to a cold wallet, but that's mostly because those exchanges fall under my speculative establishments.

More risk, please?

If you're someone who's got an established portfolio, and you want to go to the next step, well, that's where altcoins and memecoins come into play. Before jumping in, let's look at some definitions.

An altcoin (short for "alternative coin") is any cryptocurrency other than Bitcoin. Altcoins were created to improve upon the perceived limitations of Bitcoin or to serve specific purposes within blockchain ecosystems. They often introduce new features, technologies, or consensus mechanisms.An altcoin (short for "alternative coin") is any cryptocurrency other than Bitcoin. Altcoins were created to improve upon the perceived limitations of Bitcoin or to serve specific purposes within blockchain ecosystems. They often introduce new features, technologies, or consensus mechanisms. We've already mentioned Ethereum, which is a great example. Other examples are: Cardano (ADA), Binance Coin (BNB), Ripple (XRP), Solana (SOL), Litecoin (LTC), and Dogecoin (DOGE).

A memecoin is a type of cryptocurrency inspired by internet memes, jokes, or cultural phenomena. These coins typically lack substantial utility or technical innovation and are primarily driven by community engagement, social media trends, and speculation. They often gain value through viral popularity rather than intrinsic or functional value. Examples include Doge (again), Shibu Inu (SHIB), Pepe (PEPE), Floki Inu (FLOKI), etc. Here is a live list of other coins.

What gets confusing here is that memecoins are all technically altcoins, but their main focus is that idea of being based off a social media trend. However, the part that catches my attention is that although they're based off social media or the likes, doesn't necessarily mean they're not based on anything substantial, memes are incredibly substantial in this day and age, but they do lack a proper "business" utility and that's where the grey territory comes in and makes them highly risky.

My opinion, based on a great deal of reading, is that the sectors worth looking at when it comes to the smaller coins are those linked to artificial intelligence or gaming - these strike me as coins that are risky and speculative but are underpinned by real utility. Think of gaming, for example, if someone buys the coins, the coins could be used to buy swords or armour or other unlocks within a game, the game could reward success with coins and therefore the coins exist in an ecosystem that makes sense - people pay money for the coins so they can buy and sell items, that's a real utility. Of course, the game and game developers need to know what they're doing, and the game needs to be highly supported - again, this adds the risk.

Some coins to investigate

If you're looking for some AI coins, gaming coins or memecoins to look into, here are a handful that I've been watching myself:

AI: TAO, GRASS, SPEC, TAI, NEURAL, DEAI, and EMP
Memecoins: PEPE, WIF, MOG, GOAT, SPX, and ZEREBRO
Gaming: BEAM, and SUPER
Infrastructure: SOL, APT, NEAR, STX, and FTM

Two otheres getting some attention are Popcat and Virtual but I haven't done great research around them.

As always, these are high risk so please do some serious due diligence yourself before just yoloing into them!

Some extra resources

A lot of investing is about setting and forgetting, and I think that's a good place to start with cryptocurrency as well, especially Bitcoin. However, with things like memecoins, you need to be far more hands on, watching what the market is doing so you know when to buy and sell, which ultimately, is a guess anyway. But even though set and forget is a good idea, I feel that it's a better idea of staying somewhat in the know in general and to do that, there are a handful of YouTube channels that I watch. If you can't stay plugged into what's happening with a coin you purchased, I'd suggest staying far away and perhaps put your money into Bitcoin only.

To share a bit more, there are several YouTube channels that I watch on a regular basis. And when I say, "regular basis", I mean every time they launch a new video, I watch, I listen, and I form my own opinion based on additional research.

Here are some YouTube channels I actively engage with:

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Just a warning, please be careful about how you listen to these channels. Obviously, most of the authors are pro cryptocurrency, and in many cases they hype things up. Please don't just listen to someone, take their word and start buying! You need to listen, take some notes and then fact check the notes with additional research, form your own due diligence. I cannot stress this enough.

Bitcoin Fundamentals on the We Study Billionaires podcast is another great place to listen to well-informed news on what's happening in the crypto world.

Final thoughts

I'm a conservative investor by nature so when it comes to my final thoughts, I'm simply going to reiterate my stance on all of this. I would invest a maximum of 10% of your net worth in cryptocurrency and that's if you've got a sound investment strategy in place as is. If not, then I'd be dropping that amount closer to 5% rather. And, to state it again, I'm referring to that 10% or 5% being 90% Bitcoin. If you want to take 1% and put it into more speculative crypto's, then that's something you can do but be prepared to lose your money as most people do, sadly.

Update (16/12/2024): US President, Donald Trump, has confirmed a $15 trillion dollars Bitcoin reserve! This is massive news, there's a lot of information on this tweet about it.

Christopher Mills

I run a successful agency, my other passion is personal finance.

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