Cryptocurrency has been getting a lot of attention lately, especially after the most recent crash and discussions about the future of Bitcoin and crypto as a whole. Ariel Fox is a 29-year-old cryptocurrency investor who told Insider that she has no plans to pull out of the space at all.
Documents reviewed by Insider show her portfolio is still higher than her initial investments in the market. Fox says she’s not worried about the most recent dip, adding that when you “expand the graph” and look at the space as a whole to look at the patterns of Bitcoin’s rise and fall over time, the recent crash seems less cataclysmic and more just a part of Bitcoin’s overall volatility .
She has some advice for people who are thinking about investing in cryptocurrency but are very new to the space:
The first step to investing in cryptocurrency, according to Fox, is like any other financial decision: Learn about what you’re trying to do before you do it. “It’s a good idea to read as much as you can before putting a considerable amount of money anywhere,” she said.
By reading and researching, you’ll learn more about individual coins and be able to make more informed decisions about which investments are right for you and your risk tolerance level.
“Stablecoins are good for earning smaller returns in your investments with interest that you gain,” Fox said. That said, you have to be careful about stablecoins, too. Fox is heavily invested in the Gemini stablecoin (GUSD), but others like Terra lost their peg to the US dollar and went belly-up along with riskier coins like Bitcoin.
Fox said that if you’re going to invest in cryptocurrency for the first time, you should seek out referral codes in order to get bonuses.
You can get a referral code from a friend who is already invested in that platform, or you can search for them online. There are plenty of codes out there, so take the time to look through them and see which ones fit your investment interests the best.
“Don’t invest in something you’re not prepared to lose,” Fox said. “I think that that is certainly true for smaller coins especially, and smaller projects that haven’t been on the market as long or have shown that they fluctuate quite a bit more.”
It’s not only important to remember that cryptocurrency can be very volatile — these investments are not FDIC insured, so you don’t have that bank-level protection for your assets.
Some trading platforms will offer security against fraud, but hacks are common, and if you lose your password, you lose those assets. Make sure you keep your password in a safe place and pick something that’s hard to guess.
With all of the volatility that comes with cryptocurrency, it is really tempting for some investors to get skittish and sell whenever their portfolio takes a nosedive, but Fox said that it’s best to ride out the volatility.
“Oh my gosh, don’t panic sell,” Fox said. It’s not a loss until you sell, is my belief about that.”
One method that has served Fox’s portfolio well is a concept known in cryptocurrency circles as “moon bagging,” which involves taking gains from coins that spike in price and redistributing those gains to other coins, while also keeping the initial amount you invested in that coin.
“So let’s say you put like $300 in a smaller coin — a project you are excited about or really trust — and the price skyrockets, and now your investment is worth $600,” Fox explained. “I’ll sell $300, convert it back to cash, reinvest it, or whatever — but I’ll hold $300 in that same coin. That 300 is called your ‘moon bag’ and you basically ride it as it goes up, and can take profit again.”
By doing this, Fox was able to diversify her crypto portfolio among many other coins while also continuing to glean profits from coins that continue to spike up in price.
Fox added that this process is helpful, “especially in a bull market.”
Fox said that there are a lot of sketchy crypto influencers out there and that it’s important to remain skeptical and question the motives behind the information you’re getting.
“Some of them are getting paid to promote certain projects that aren’t necessarily reliable because that’s their livelihood,” Fox said. “There are certain voices in the crypto space I trust more than others.”
Fox said she’ll search for the projects and coins mentioned on Twitter, Reddit, or other social media sites, and will pass if she doesn’t see a lot of buzz or excitement from a large number of investors. “I like to see kind of more interest in a project from a larger group of people before I decide to invest in it,” Fox said.
“I don’t try to time the market at all,” Fox said. “When I started, I did try to time the market. I did a little bit more experimenting with buying dips, selling, holding in cash, and buying again when it dropped.”
However, Fox said that she regrets trying to do this and that it’s not as profitable as riding out the volatility of her holdings.
“I noticed that that wasn’t necessarily quite as profitable as just sitting back and watching, same with stocks,” Fox said. “I tried to time the market a little bit with stocks when I first got into retail investing. I noticed that isn’t always the most reliable — especially with crypto.”
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