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09 Jun 2020
5 min read

Expert Views: Top Tips from Crypto’s Elite

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Written by OspreyFX News Team
*OspreyFX would like to state that traders should research extensively before following any information given hereby. Please read our Risk Disclosure for more information.

 

Expert Views: Top Tips from Crypto’s Elite

Traders Takeaways
  • Tips for acing your way into the crypto industry
  • The top coins to trade
  • Why OspreyFX is your broker of choice

Cryptocurrency has boomed in recent years. As we have previously mentioned, the best way to understand this market is to follow those that are the most passionate about it. We’re talking about those very people who are driving adoption and bringing new developments that keep the crypto arena buzzing.

To this end, we have dissected the strategies of the crypto elite and condensed them into the top 5 tips that will help traders in their journey from novice to pro. Curious to know more about these renowned masterminds read more here and here. Let’s dive in.

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How to Ace the Crypto Domain

1. Risk the Unknown and Emerge From Your Comfort Zone

The human brain is wired to seek pleasure and avoid pain. The comfort zone is the perceived area of safety, and everyone has one. To experience growth, we must confront fear-laced behaviours. This involves challenging oneself, taking risks, and seeing mistakes as key parts of the game. The aim is to test yourself and learn from the patterns that emerge from these tests. No high achiever has risen to the top without a few stumbles along the way. When we challenge ourselves, we use a personal store of untapped wisdom and the extent of what you can do will remain a mystery if you choose not to venture outside of your familiar world.

Vitalik Buterin has often been described in terms of his awkwardness. In fact, he has sometimes been compared to an android or a praying mantis. Despite his social clumsiness, one thing is certain; the “boyish god-emperor” is a visionary in the blockchain world. If you read his articles, you will find that he rediscovered results on 2 well-known economics studies without knowing anything about the papers. How? He thought himself economics through reading and attending conferences. He believes that physically going places and networking is an indispensable opportunity that helps you to learn about what people are thinking and how they are thinking.

If we take Blythe Masters’ life mantra “rise to the occasion when you feel challenged about something. Feel the fear associated with doing that thing and proceed to do it anyway”. Every trader must be willing to withstand some discomfort to be successful. You could do worse than following Buterin or Masters’ lead. Getting out of that comfort zone prepares you to face your most important market challenges.

2. Understand the Blockchain

Blockchains not only make trading easier but they also have a direct effect on the price of the connected cryptocurrencies. Furthermore, increased popularity in blockchain equals an increase in the value of cryptos and trading opportunities will follow suit. Therefore, it’s in a trader’s best interest to not only focus on trading but to get a deeper understanding of the systems that support the instruments. The good thing is, we don’t mean that you have to know all the complexities. Having a basic understanding of the blockchain will help crypto traders to respond to market events and better forecast price movements.

If you are curious about the relationship between blockchain technology and the financial sector look no further, read more here.

3. Utilize the News but Don’t Believe the Hype

Short-term cryptocurrencies are sensitive to relevant news and world events, and the price will fluctuate accordingly. Being in the know will help you to stay on track and make the best decisions.

On the flip side, there is a lot of fake news and people trying to sell a skewed idea of the trading life and what it can offer. Nice cars, big houses, or nice holidays…who wouldn’t love this type of lifestyle? However, this hype is a misconception of how trading works. It’s true that people can make big profits from trading. The fallacy is that it doesn’t happen in an instant. Trading takes hard work, grit, and the ability to accept that losses are part of the experience. Don’t let FOMO win, and keep in mind that what everyone else is doing isn’t necessarily the best course of action to take. So, the moral of the story is to follow the news and trading resources every day while ignoring the noise around you. Use market events/news and interpret them for your own personal trading style.

4. Hope for the Best, Prepare for the Worst

This lesson comes from Brian Armstrong; the brains behind the Coinbase operation. As COVID_19 becomes more manageable and the world settles back to ‘normality’, Armstrong’s approach throughout was to plan for a negative outcome but maintain an optimistic outlook. Trading is no different. Significant volatility does exist and cannot be ignored. Price swings become second nature and this is something that isn’t usually found in more traditional markets. By expecting the unexpected and mentally preparing for unfavourable (and sometimes chilling trading situations), intelligent investors will be equipped to act rationally not emotionally.

5. The Price Is a Symptom so Don’t Focus on It

Our final lesson comes from Jihan Wu. In an interview, he was asked if he felt that the market cap of Bitmain could exceed that of BTC. His response was “market cap is an illusory concept, it rises and falls when boom-bust cycle. When you run a company, you’d better focus on identifying and developing core values.” Wu understands that that market value goes up only through hard work and dedication. When trading we can get so caught up on the price of our investments and forget about the bigger picture. For instance, don’t buy simply because the price is low. The crypto market is dominated by large whales, and the key to their success is patience. They wait for defenceless traders to make mistakes that land these traders’ money into their hands. Thus, traders are almost better off not earning anything on a specific trade than rushing in head first and being blinded by losses.

Tip: Establishing a definitive stop loss level can help traders minimize loss, a skill that is very rare among traders. If you are unfamiliar with this term you can check more about it here.

 

Expert Views: Top Tips from Crypto's Elite

Top Coins to Trade

Now that you are 5 tips richer and armed to crypto trade it would be rude of us not to include the assets worth trading. Many new projects turned 2019 into the year of change for cryptocurrencies. So far, 2020 has been characterized by volatility wreaking havoc even though this has made for some nail-biting events. On one hand, we have seen BTC plunge over 40% in less than 24 hours in March to then continuously flirt with the $10k level in May. It’s hard to predict what will happen in the crypto market on any given day but Bitcoin, Ethereum, and Ripple are top of the list for tradability. Nevertheless, we advise traders to do their homework because fundamentally, the crypto market is driven by volatility.

Bitcoin

At the top of our list is the king of the crypto world, Bitcoin. This may seem like an obvious choice, however, BTC continues to be one of the best cryptocurrencies to invest in. The leader of the pack makes up 65% of the global crypto market, with a market capitalization of $177.67B.

2020 was a rocky start for BTC with the price dropping below the $4k level in March. However, momentum has picked up leading up to and since the iconic halving. The safe-haven has grown from strength to strength in May, following suit from the previous events in 2012 and 2016.

2017 was an incredible year, with BTC hitting its highest price ever and reaching $19,783. The jury is still out on whether the king of the crypto jungle can climb to those heights again. With some bulls’ optimistic hopes eyeing up a $100k milestone. At the time of writing bitcoin’s price was $9,679.51. It’s likely that BTC will prevail and the endless toying with the $10k level will set the ball rolling. So, watch this space.

Ethereum

Every great king needs his queen and rocking in at number two is Ethereum. ETH is the second-largest digital currency, with a market capitalization of $26.95B, at the time of writing. Furthermore, since its inception, the crypto giant has had a very high price instability. This volatility creates a great chance to benefit within a pretty short time span, particularly for daily traders. Best of all, traders can profit whenever ETH cost is rising or falling.

2019 was a tough year for ETH enthusiasts, with the price dropping from $136.550 on January 1st to ending the year at $132.610. The current price as of June 9th, 2020 stands at $242. Based on historical data this upward trend will continue, and within one month we could see ETH trade above the $300 level.

We advise traders to keep a close eye on ETH behaviors, especially as a longer-term investment. What we mean by this is, if you are looking for a good 3-5-year return Ethereum might be a good coin to observe closely now.

Ripple

Ripple or XRP a known as a Real Time Gross Settlement System, currency exchange, and remittance network. XRP has many benefits for potential traders:

1. Infrastructure

The XRP protocol is led by xRapid, allowing for cheaper and faster solutions. Ripple’s transaction speed is faster than both BTC & ETH weighing in at 1500 Transactions per Second.

2. Supported by big players:

We are already seeing Ripple being adopted by prominent financial institutions. This increasing level of trust will certainly impact positively on the token’s overall performance.

3. Low price, big market cap:

The current price of XRP at the time of writing is just above the $0.20 level. This low price makes it the perfect entry point for traders who can’t afford to trade huge sums of BTC & ETH. Additionally, XRP’s obtains a market capitalization of $8.14B which has proven less volatile than the other 2 giants and so making it a more resilient investment.

However, it doesn’t come without its drawbacks – namely slow adoption and regulatory structures but this has been a continuous battle for many in the crypto space.

Ripple’s Outlook

If you have been following the crypto sphere, you will know that 2019 wasn’t a year to write home about. Finishing the year in the red, it sat just below $0.20 on December 31st after having started at a quote of $0.35. It may even come as shock to include crypto in the list considering that it wasn’t even in the top 10 best performance list of last year, in fact not even the top 30. Nevertheless, we’ve seen a slight recovery in 2020 with XRP enthusiast Robert Art predicting a skyrocket to $10 and beyond. Moreover, algorithmic analysis points to a $4.50 level in the next 5 years. Will the heady days of 2017 creep back upon us? We still remember vividly the moment when XRP leapfrogged Ether and became the world’s 2nd largest crypto. We will all just have to sit in anticipation and see.

Why OspreyFX Is Your Crypto Broker of Choice

OspreyFX provides a secure ECN trading environment that permits traders to trade exclusively online. Our clients can trade a broad range of top cryptocurrencies with up to 1:500 leverage. So, what are you waiting for? Start your crypto journey today, sign up here.