How to Invest in Cryptocurrency (Bitcoin, Ethereum, and Altcoins)

Last Updated – Jun 2, 2023 @ 1:13 pm

Technology has drastically changed how people communicate, work, and even invest. In recent years, cryptocurrency has been the hottest buzzword in the tech world, and millions of people are curious about it.

A lot of people think investing in Cryptocurrencies such as Bitcoin, and Ethereum may seem like a complicated process.

However, this can be done in just a few clicks thanks to the advent of legitimate accessible apps and wallets.

If you want to get your foot in the door and invest in cryptocurrencies, we’ve compiled this beginner-friendly guide for you.

What is Cryptocurrency?

The best way to explain cryptocurrency is to think of it as decentralized money in the digital world. It is based on blockchain technology, a ledger that is enforced by a network of computers.

Because cryptocurrency is secured by cryptography, it is impossible to counterfeit. One of the most defining features of cryptocurrency is it is not issued by the government or any central authority. 

Cryptocurrency can be used to buy services and goods, and many people invest in it similar to how they would invest in stocks, artworks, and other assets.

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3 Categories of Cryptocurrencies

1. Transactional – Bitcoin operates using this framework. Transactional cryptocurrencies provide a digital system of secured payment exchanges.
2. Platform – This category of cryptocurrency is designed to serve as the framework on which other cryptocurrencies are built upon. It serves as the launch pad for Smart Contracts, which are programs that operate under specific terms and conditions and executes it automatically in a fast and secured manner.
3. Utility – A rough representation will be to think of them as apps that do a specific task. Cryptocurrencies like Ripple is an example.

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Crypto Tokens vs. Coins

A lot of people think crypto tokens and coins are the same things, but the two have major differences. 

A token refers to any digital asset that is created on the blockchain. Tokens are usually minted or issued on another blockchain and it often exists with other tokens, and it can be created using automated tools and code. 

On the other hand, coins can only run on the blockchain where it is the “native token.”

Some examples are cryptocurrencies such as Ether, Bitcoin, and Litecoin that exist on its blockchain. Building blockchains requires a great deal of financial resources, so not everyone can launch coins.

The major purpose of coins is to serve as a payment cryptocurrency. Meanwhile, tokens can be used for a wide variety of purposes such as security, NFTs, or even tokenized money.   

Now that you know the key distinctions of tokens and coins, let’s talk about the most popular coins today. 

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What is Bitcoin?

Bitcoin is the most popular and highly valued cryptocurrency today. This decentralized digital currency can be sold, exchanged, and bought directly without the help of a bank or other intermediaries.

Bitcoin was created by Satoshi Nakamoto, and it was originally described to cater to the need for an “electronic payment system based on cryptographic proof instead of trust.”

True to its decentralized nature, all bitcoin transactions that were made are available on a public ledger that can be accessed by everyone. This makes all transactions extremely hard to fake or reversed. 

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What is Ethereum?

Ethereum is a blockchain that has its native cryptocurrency called Ether (ETH) or Ethereum. It follows a programming language called Solidity. 

Just like Bitcoin, Ethereum’s network is also a decentralized public ledger that can record and verify transactions. Currently, Ethereum’s value is second to Bitcoin. 

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What are Altcoins?

Other cryptocurrencies apart from Bitcoin are called Altcoins (alternative coins). All these cryptocurrencies have the same characteristics as Bitcoin, with only a few differences.

For instance, some altcoins use a different mechanism to validate transactions. There are also altcoins that offer new capabilities such as smart contracts. 

The rise of Bitcoin has inspired thousands of Altcoins. Since these are derived from its widely successful predecessor, its price movements usually mimic Bitcoin’s market trajectory. 

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Types of Altcoins

Altcoins usually fall into the categories listed below.

Stablecoins

These are the coins that are pegged to existing assets. Examples of Stablecoins include Facebook’s Libra, which is pegged to the US Dollar.

The idea behind this concept is to reduce the volatility of the coins, which is one of the drawbacks of bitcoin. 

Mining-based coins

Although the most popular way to make money through cryptocurrencies is to buy them, they can also be mined.

Mining requires users to validate a transaction to make sure it is authentic, and update the blockchain accordingly. The reward for this proof-of-work method is cryptocurrency. One example of a mining-based coin is Litecoin. 

There are also pre-mined coins like Ripple’s XRP that are not produced through an algorithm. Instead, they are distributed before being listed in markets. 

Utility tokens

This can give people access to a service within a network. One example of a utility token is Filecoin, which is used to buy storage space.  

Security tokens

This is a form of investment contract that promises things such as equity, voting rights, or even profit sharing, among many others.

These are linked to businesses and they are usually governed by laws. Considering this, there is a stricter guideline for security tokens.

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How to Earn & Make Money through Cryptocurrencies

Everybody who gets into Cryptocurrency wants to make money.

This fast-growing digital asset offers numerous ways to earn, and understanding each method is a must so you can find out which one fits you best.

Mining

This is an incredible method to earn money. However, it’s not meant for all cryptocurrencies.

Many people falsely believe that when you mine coins, you can get millions in a matter of days. However, the process is more complicated than that.

To mine a cryptocurrency, a computer is used to address or solve complex mathematical problems that approve the blocks of transactions on the blockchain.

Basically, you’re lending processing power to the whole system when you mine, and you’re then rewarded with some cryptocurrency over time.

The cryptocurrencies given in compensation to miners are a combination of both newly-issued tokens/coins and a portion of the fees charged to the transactions that were validated during the mining.

The speed at which you mine cryptocurrency is measured in hashes per second—the higher it is, the more quickly you mine. The more processing power contributed, the bigger the reward.

At first, miners relied mostly on CPU power to mine. Then somewhere down the line, it was figured out that mining can be done more efficiently if they tap into the power of GPUs on graphics cards.

Creating a mining rig is all about efficiency since you’re consuming energy in order to mine for bitcoins. If you spend more on your electricity bill than what you earn in bitcoins or just break even, then it’s a useless exercise.

Using GPUs to mine was determined to be the more efficient way of doing it.

However, due to miners hoarding graphics cards for their rigs, it affected the graphics card market as prices went up, much to the chagrin of other consumers who just want a cool graphics card for their gaming computers.

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Trading

Majority of cryptocurrency investors trade. This method takes a lot of analytical skill because it’s more than just holding onto the asset until its value rises.

You need to spend time analyzing various market charts, as well as the previous performance of the assets. While this is hard, it can also be the most rewarding. 

Trading involves taking long or short positions depending on how you expect an asset to perform. Considering this, you can make a profit regardless of the current crypto market condition. 

If you do not want to spend countless hours analyzing the market, you can invest in cryptocurrencies and hold them for a longer period.

These digital assets generate amazing returns for those who implement the buy and hold strategy because they have high growth potential. But before taking this route, you need to identify stable assets that will be around for years. 

There is no such thing as an official Bitcoin exchange due to the decentralized nature of cryptocurrency. Instead, there are several exchanges wherein you can trade and exchange Bitcoin and other cryptocurrencies.

While users are spoiled for choice, important factors must be considered while deciding on which exchange you wish to go for.

• Is the exchange trustworthy and have regulations in place to keep transactions safe?
• Where is the exchange based? Local is best if you have to deposit cash (fiat currency) and make payments.
• What percent of each trade is charged?
• Does the exchange have high liquidity and good market depth?

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Staking & Lending

If you want to invest in coins that can’t be mined, it is still possible for you to get your hands on them since there are two ways to approve blocks – proof of work, and proof of stake.

Staking is a method of validating transactions by locking them in a wallet. Then, the Proof of Stake network uses your coins to validate certain transactions and you get rewarded for it. In a way, it’s like lending coins to a network to help it maintain its security and verify transactions.

The reward is like the interest banks pay for a credit balance.

However, this functions like a lottery game. The more coins you commit, the more possibilities you can enjoy to earn more. A lot of investors even join staking pools to increase their chances of getting selected. 

Crypto exchange platforms where you can stake cryptocurrencies:

• Binance
• Coinbase
• Kraken
• Bitfinex
• KuCoin

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Airdrops & Forks

Another way you can earn through cryptocurrency is through airdrops and free tokens. These are distributed to foster awareness, so you don’t even need to invest anything.

All you have to do is to join a program and perform easy tasks. You can also earn bonus tokens when you invest during a token sale phase. 

It is also possible to get a free coin when a blockchain forks due to new protocols. If you have coins in the original chain, chances are, you’ll be rewarded with free coins on the new network. 

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NFTs

Non Fungible Tokens or NFTs have proven to be a smart investment. NFTs are unique assets that can be stored as the digital equivalent of collectibles, and there are many ways you can make money through NFTs.

NFT artworks are the most valuable tokens today, with works being sold for as much as $69 million, which is approximately Php3.5 billion.

This makes it an amazing avenue for art creators to make money. Fashion NFTs are also a great way to earn, and this is used by clothing brands to create limited designs and collections. 

Additionally, it is possible to make money through licensed collectibles. This niche market functions similar to how people deal with physical memorabilia, trading cards, and other trinkets.

With the NFT’s unique feature to prove originality, the value of these items can be higher than its physical version. Therefore, it can be resold for a profit. 

Another way thousands of people make money through NFTs is by playing games. Game functions allow trading, buying, selling, and exchanging, and the potential to earn money is incredible.  

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Crypto Futures

Cryptocurrency futures refer to contracts between two counterparties that bet on the future price of a cryptocurrency. This derivative trading product allows investors to select any cryptocurrency without owning or handling it. In the case of Bitcoin futures, for example, the underlying asset is Bitcoin.

Futures enable investors to hedge against volatile markets. It also ensures they purchase/sell a cryptocurrency at a specific price in the future.

If the price moves in the other direction as the trader desires, they may end up paying more compared to the market price for the cryptocurrency or selling or at a loss. 

There are three major components of crypto futures contracts. 

• Expiration date. This is the date when the futures contract should be settled or when one party has to buy and the other has to sell at the agreed price. It’s important to remember that traders can sell their contracts to other investors before this date if they wish.
• Units per contract. This covers how much each contract is worth of the underlying asset. It changes from platform to platform. 
• Leverage. To intensify the potential gains traders can make on their futures bet, exchangers allow users to borrow capital. This can be used to increase their trading size. 

Futures can be settled in two ways:

• Cash-settled. Upon settlement, there’s a cash transfer between the buyer and seller
• Physically-delivered. Upon settlement, the buyer purchases and gets the underlying asset.

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Blockchain ETFs

A blockchain exchange-traded fund or ETF is just like standard sector or theme-based ETFs that invest in a bundle of specific blockchain-based companies.

Companies in this kind of ETF have business operations in blockchain technology, or invest and/or profit from blockchain. 

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Pros & Cons of Investing in Cryptocurrencies

You may have heard tons of stories about people who have made millions thanks to cryptocurrency, but just like other investment opportunities, it’s not perfect. 

If you’re still on the rocks about investing in cryptocurrencies, we’ve rounded up the advantages and drawbacks to help you weigh your decision.  

Pros

It is secure

Scams aside, investors who go with cryptocurrency can enjoy one of its biggest advantages – security.

Cryptocurrencies such as Bitcoin are designed to be part of a secure system, and the decentralized nature of blockchain signals that someone cannot steal or falsify a transaction because this is impossible to do without hacking thousands of computers.

It is accessible

Another advantage of cryptocurrency is you can invest in it in just a few clicks. There are now tons of choices of platforms that you can use.

Unlike the stock market, you can also enjoy 24/7 market hours. Therefore, you can buy or sell crypto at any time of the day. 

There is no middle man

Cryptocurrencies are decentralized, and there are no middlemen such as banks. This makes fund transfers more affordable because there is no need to pay a huge fee to third parties.

The transfers are also secure. Because cryptocurrencies eliminate the need for huge transaction fees, this makes it great for international transactions no matter where the sender and recipient are located.  

It offers huge profit

The value of cryptocurrencies is based on how rare it is, its characteristics, and the effort to mine them. In a week, its price can change drastically so making money is easier.

On the flip side, this benefit can also turn into a disadvantage if luck is not on your side. The huge price swings are more drastic when it comes to Altcoins. 

It is a hedge against inflation

The cash you have in your bank can lose its value over time because of the rising costs of goods. However, the same thing cannot be said when it comes to cryptocurrencies. 

Cryptocurrencies are not unlimited.

There is a finite supply built into its source code so it’s a hedge against inflation. When more coins cannot be mined, the value will keep up with the rate of inflation. 

Cons

It is volatile

To give you a picture of how volatile cryptocurrency is, take for example when Elon Musk mentioned Dogecoin.

After voicing out his reservations about the cryptocurrency, its value dropped around 70 percent.

The prices of most cryptocurrencies, especially Altcoins, are a rollercoaster.

As with other investments, it is recommended to diversify your portfolio instead of putting all your resources into a single coin.

The regulations are constantly changing

If you want to invest in cryptocurrency, you need to be prepared to watch the changing laws around it.

For example, the SEC filed a lawsuit against Ripple¹ and this dispute has caused the cryptocurrency’s value to rise and fall constantly.

Soon, there may be new regulations in place that would change the market.

There are security issues

Aside from regulations, there is also a security issue to keep in mind. Although blockchain is secure, the surrounding software tools interacting with the network can be infiltrated.

If a hacker gets into your wallet, they can steal your coins.

Not only that but some hackers can also get into exchanges or the platforms used to trade cryptocurrencies.

If this happens, they can make a transaction without hacking into the cryptocurrency and it will be seen as a legitimate order. 

It can’t be recovered

There are thousands of cryptocurrencies that are locked and will never be recovered. The most common reason why this happens is forgotten passwords.

After you buy cryptocurrency, you will be solely responsible for it, and when you lose your password, you can say goodbye to your coins forever. 

In the same way, if a fraudulent seller cheats you to pay them with cryptocurrency, you will have no legal means to get your coins back. 

Mining requires resources

While you can make a huge amount of money in mining coins, you need to shoulder its upfront cost.

This is not only financially intensive but also labor and energy-intensive.More than that, it’s also not good for the environment.

For example, Bitcoin mining is responsible for 0.5 percent² of the global energy output, and this is made even worse by the location of most Bitcoin mines in Russia and China, which are both coal-powered countries.

Related: Investment Statistics in the Philippines

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How to Buy & Sell Cryptocurrencies (Bitcoin, Ethereum, & more) in the Philippines

Buying and selling cryptocurrencies in the Philippines has never been this easy. We’ve compiled how to buy and sell coins on different platforms below.

Buy via Coins PH

To buy coins on this platform, you need to download the Coins.ph app which is available for android and apple devices. 

After you’ve downloaded the app, create an account. 

Then, transfer some funds to your coins.ph by selecting the “Cash In” option. 

There are several ways to fund your account through remittance centers, over-the-counter banking, kiosk payments, as well as e-wallet and online banking transfers. 

You can add funds through Palawan Pawnshop, Western Union, Paymaya, GCash, BPI, BDO, 7-Eleven, and many more. 

Once you have your peso wallet loaded, you can finally buy cryptocurrencies such as Bitcoin, Ethereum, XRP, USDC, and Bitcoin Cash, among many others.

Select the “All” option, then select “Convert.” 

Choose the cryptocurrency you want to buy, enter the amount you want to convert, and slide. 

Your cryptocurrency will instantly appear after that. 

You can also sell your cryptocurrencies within Coins.ph using the same conversion process (Crypto to PHP).

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Buy via Binance

Binance is available for both mobile and desktop. To buy and sell cryptocurrency using this platform, you first need to create an account.

Once you’ve made an account, select the “Buy Now” option on the homepage.

With Binance, it is possible to get cryptocurrencies using different fiat currencies. Simply enter the amount you want to convert into crypto and it will automatically display the crypto you can get with your money. 

The next step is to pay for it through different methods such as your current balance, Western Union, or Revolut. 

However, the easiest way to pay for it is to use your credit or debit card. When ready, simply enter your card information, confirm your order, and check the recalculated amount. 

You will be directed to your bank’s OTP page to verify your payment. Once done, you will see your crypto in your account’s wallet. 

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Coinbase

To use Coinbase on a desktop, you need to make an account or sign into Coinbase. 

If you want to add your bank account to Coinbase, the verification process will take 2-5 business days. 

On the upper right corner of your screen, select the “Buy/Sell” option. Click “Buy field” and select which cryptocurrency you want to buy.

Then, enter the amount you want to convert into crypto, and select your payment method. Next, confirm your purchase.

The same instructions can also be used for the app. For recurring purchases, just select “one-time purchase” and edit how often you want the purchase to repeat. 

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Maya Crypto

Maya is a digital bank that aims to revolutionize the way Filipinos manage their money. Formerly known as PayMaya, this platform recently introduced a great feature called Maya Crypto.

This allows its users to Cash in, buy, sell, HODL, manage, and learn more about crypto for as low as P1.

To access Maya Crypto, open Maya and tap “Crypto.” Then, upgrade your account with at least one valid ID. The available cryptocurrencies on Maya include:

• USDT
• ETH
• BTC
• UNI
• MATIC
• QNT
• LINK
• SOL
• DOT
• ADA

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GCash (available soon)

The leading mobile wallet in the country will soon roll out cryptocurrency trading on the platform, although they have not disclosed their partner firm yet. 

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How to Trade Cryptocurrencies in the Philippines

Want to get started on trading cryptocurrencies but confused on how to start?

Here are the steps you need to take to kick off cryptocurrency trading.

Step 1: Pick an exchange platform

Similar to trading stocks, you need to pick a platform that can accommodate coins trading.

All you need is to register and transfer funds in your account, then you can start buying and selling the cryptocurrency of your choice. 

Different platforms have different terms of service so make sure to research well to find out which one suits you best. 

Step 2: Put funds into your account

After you have created an account in a crypto platform, you can either connect it to your bank account or transfer funds from your crypto wallets (ie: your funds from Coins.ph). Some platforms also accept wire transfers.

It is important to note that not all exchanges accept fiat so you may need to buy crypto first, then transfer it to the exchange.

Thankfully there are exchange/broker/wallet hybrid apps where you can do everything in just one platform.

Step 3: Choose a cryptocurrency

While the most commonly traded cryptocurrencies are Bitcoin and Ethereum, you can also explore other cryptocurrencies.

These two are just preferred by many traders because their market trajectory is more predictable compared to other altcoins. Therefore, the risk is lessened.

That said, some traders put money into smaller altcoins. Although this is riskier, it can potentially offer a higher return in the long run.

Typically, smaller altcoins can rise more than 1000% in just a matter of months, and that is why a lot of people view it as an incredible investment. 

Step 4: Pick a strategy

Every wise trader follows a strategy. These strategies allow traders to factor in several elements that would go into their decision to buy or sell crypto.

If you are new to trading, you must dedicate time and effort to studying several strategies. Here are some of the most common ones:

Investing early

With cryptocurrency, the more time you give it to grow, the higher your potential return will be, especially if you pick the right crypto and hold on to it until its value has increased significantly.

Many platforms can help you discover new Altcoins. Just be careful in evaluating every opportunity by reading reviews and insights from other traders.

Hodling (buy and hold)

HODLing is a play on the word “hold,” and it stands for “hold on for dear life.” This long-term strategy is one of the most effective approaches you can follow.

It is also very simple. All you need to do is buy a cryptocurrency and hold on to them. This period can last for years so just be patient and remember that this strategy is what made most crypto millionaires successful. 

Earn a yield

The goal of this strategy is to bring you financial return in the long run.

It is quite similar to HODLing, although this strategy focuses more on holding your cryptocurrency and earning a passive income while doing so. 

Lump-sum investing

This strategy requires you to invest all the money you have available at once.

For instance, if you got a Php20,000 bonus at work, you need to invest all of that instead of splitting it into different coins. 

Dollar-cost averaging

This strategy involves an investor allocating a specific amount of money to an investment regularly. For example, you need to invest Php5,000 in Bitcoin every month.

This way, you won’t need to worry about volatility because regardless of whether the crypto value is high or not, you will add to your portfolio. However, don’t expect short-term results with this strategy. 

Value investing

If you invested in Bitcoin in 2011 when its value was only $3.50 and held on to it until April 2021, you would have earned more than $54,000 or almost Php2.3 million per bitcoin.

That is the concept of value investing. If you think a cryptocurrency is undervalued, invest in it and you will see profit in the long run. However, this strategy needs a lot of research, as well as patience.  

Step 5: Store your cryptocurrency

For those who are actively trading, it is advised to store your crypto on the exchange of your choice so you can have immediate access to it.

If you want to hold your crypto for a long time, getting a secured crypto wallet is key. 

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Best Cryptocurrency Wallets to use in the Philippines

Cryptocurrency wallets store your private keys. There are two types of wallets: hot wallets and cold wallets. 

Hot wallets are still connected to the internet and while it’s flexible, it’s less secure compared to cold wallets.

On the other side, cold wallets offer more security and would have to be stolen for your cryptocurrency to be lost. But since it’s not connected to the internet, you won’t be able to trade funds anytime, anywhere. 

Within the wallet categories, there are three types which include:

Software wallets

This includes web wallets that can be accessed through a browser; desktop wallets that require an application on your computer; and mobile wallets which can be accessed on a mobile app. 

Hardware wallets

This wallet allows you to save your keys on a physical device instead of software. It works similar to a flash drive and can be connected to a computer and other devices.

Paper wallets

This cold wallet is a piece of paper that contains the data you need to access all your cryptocurrency. 

Here are some wallets you can use for your cryptocurrency.

Coins PH

Founded in 2014, Coins.ph is one of the most versatile crypto wallets you can use since it’s not only an avenue where you can store your crypto, but also pay your bills, buy game credits, and even shop online.

This wallet is also recognized by the Bangko Sentral ng Pilipinas.

Coins.ph has more than 5 million users and is available on the App Store and Google PlayStore. Here are the different cryptocurrencies you can store here:

• BTC
• BCH
• ETH
• XRP
• USDC
• LINK
• KNC

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Abra

Although this Crypto wallet is based in the US, they have a headquarters in Manila.

This platform offers more diversity than Coins.ph since it can hold more than 100 cryptocurrencies including:

• BTC
• ETH
• BHC
• XRP
• LTC
• XMR
• DASH
• ADA

It can also accommodate 50+ fiat currencies, and allow you to earn interest. 

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Coinbase

Coinbase is a beginner-friendly wallet that uses biometric authentication technology to improve its security.

It supports more than 25 cryptocurrencies for staking, trading, and investing. These include popular cryptocurrencies such as:

• BTC
• BCH
• LTC
• ETH

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Trust Wallet

Trust Wallet is a mobile app that will let you store, send, and receive cryptocurrencies.

It is designed with simplicity in mind so it’s very straightforward to use. It also caters to all major cryptocurrencies like:

• ETH
• BTC
• XRP
• LTC

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Ledger Nano S Hardware Wallet

Ledger Nano S is a hardware cryptocurrency wallet that was made by eight experts with backgrounds in entrepreneurship, cryptocurrency, and most importantly, security.

This hardware lets you backup your wallet with a 24-word seed phrase. It works with different blockchains and is compatible with 1150 cryptocurrencies such as:

• BTC
• ETH
• XRP
• USDT
• BHC
• DOT
• LTC

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Best Cryptocurrency Exchanges & Trading Platforms for Filipino Investors

There’s no doubt that cryptocurrency trading is a booming industry in the country. But with tons of platforms, you may be confused about which one to use.

When it comes to picking the right trading and exchange platform, it is recommended to consider certain factors such as its available cryptocurrencies, and trading elements.

We’ve gathered some of the most reliable platforms you can choose from below. 

Binance

Binance is the largest digital exchange service in the world with over 1.4 million transactions done per second.

In this platform, you can buy and sell a wide array of cryptocurrencies, and the app is also very easy to use and includes live prices. 

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Coins Pro

Formerly known as Coins Exchange, this online trading platform will allow you to directly buy and sell cryptocurrency.

Coins Pro is the first digital currency exchange in the country, and it can also function as your wallet. 

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eToro

This platform gives its users a complete crypto trading solution. It is perfect for beginners and experienced traders.

With eToro, you can easily buy and sell crypto and enjoy hassle-free deposits and withdrawals. The platform also offers free analysis tools and market research.

For its advanced cryptocurrency exchange, it boasts institutional-grade algo-trading capabilities, and deep liquidity, among many others.

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Kraken

Kraken is a feature-filled platform that will enable you to trade over 80 cryptocurrencies, and it also accepts a wide range of fiat currencies.

Although beginners may go through a learning curve with this platform, they can still enjoy great security and reasonable fees. Because it’s been around for almost a decade, its track record speaks for itself.

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10 Most Important Cryptocurrencies

There are thousands of different cryptocurrencies, and choosing the ones to invest in may make your head spin.

To help you, we’ve gathered our top picks for the most important cryptocurrencies to invest in based on the value of coins in circulation, its current market capitalization, and their growth potential. 

Bitcoin (BTC)

Market cap: $853.74 billion

Bitcoin is one of the cryptocurrencies that don’t need an introduction.

Created in 2009, it is the original cryptocurrency. Bitcoin has become a household name in recent years thanks to its skyrocketing value.

Ethereum (ETH)

Market cap: $390.38 billion

Ethereum is both a cryptocurrency and a blockchain, and it’s a favorite among developers because its potential use for application is tremendous.

This cryptocurrency has experienced steady growth, with more than a 27,000% increase in just five years.

Cardano (ADA)

Market cap: $82.68 billion

Cardano was created by a team of cryptography experts, engineers, and mathematicians. This project was co-founded by Charles Hoskinson, who was one of Ethereum’s founding members.

Cardano stands out among other proof-of-stake cryptocurrencies, and it is even nicknamed the “Ethereum Killer.” 

This cryptocurrency aims to provide a financial operating system through decentralized financial products that can be used for legal contracts, and voter fraud, among many others. Despite this, it still has a long way to go.

Binance Coin (BNB)

Market cap: $69.1 billion

BNB is a utility cryptocurrency that functions as a payment mode for the fees linked with Binance Exchange, and people who use this token as a means of payment can enjoy discounts when trading. 

Ripple (XRP)

Market cap: $50.24billion

Created by the founders of the blockchain Ripple, XRP is used on the network to facilitate different exchanges of fiat currencies and other cryptocurrencies.

This affordable cryptocurrency is geared towards solving problems for financial institutions.

LiteCoin (LTC)

Market cap: $11.78 billion

This alternative coin allows traders to enjoy a faster transaction speed compared to other cryptocurrencies.

LiteCoin was created by MIT graduate and former Google Engineer Charlie Lee, and it is based on an open-source global payment network. 

Polkadot (DOT)

Market cap: $32.55 billion

This proof of stake cryptocurrency aims to deliver interoperability among various blockchains.

The protocol behind Polkadot is specifically designed to be a relay chain. This unique integration feature can drastically change how cryptocurrencies will be managed in the future.

Chainlink (LINK)

Market cap: $12.14 billion

This decentralized oracle network addresses the gap between smart contracts and the data outside them.

Blockchain transactions cannot be reversed, so they need to be sure that they are being executed based on the right data.

This is where oracles like Chainlink come into the picture. Investing in this cryptocurrency will allow you to ride the wave on today’s go-to decentralized oracle network.

Stellar (XLM)

Market cap: $7.704 billion

This open blockchain network solves the problem for financial institutions that have to wait a long time and spend a lot of money to execute a large transaction.

With this, it can be done instantly with no help from banks or any intermediaries. Although Stellar is an enterprise blockchain meant to be used for institutional transactions, anyone can still invest in Lumens, its native cryptocurrency.  

Tether (USDT)

Market cap: $68.29 billion

Tether is different from Bitcoin and other cryptocurrencies because its value is backed by dollars, euros, and other fiat currencies. Therefore, its value is more consistent.

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Tips on Cryptocurrency Trading & Investing

There is no doubt that the best trading practices will stem from years of experience, but that doesn’t mean beginners can’t do it right the first time. Check out the tips below to make the most out of your crypto investment.

1. Follow the buy low, sell high strategy

The idea behind this tip is the same as when you invest in stocks. Crypto prices fluctuate based on different factors and the strategy behind buying low and selling high relies on determining when it will hit its bottom price and purchasing in the hopes of waiting for it to go up.

Meanwhile, selling high involves figuring out when the market will reach its peak and once the maximum value has been reached, you’re ready to sell your cryptocurrencies and enjoy a profit.

When it comes to the buy low, sell high tip, investors must not factor in the ups and downs that come in between the minimum and maximum value.

This strategy works best for long-term investments, with the intention of at least doubling your money. 

However, this tip is not black and white because price is not everything. Just because a crypto price is low does not automatically make it a good investment.

When investing, always keep the market cap in mind. The higher the market cap of a coin is, the better it is for investment purposes. 

2. Diversify your portfolio

Cryptocurrency is very unpredictable and one way you can lessen your risk is to diversify your portfolio.

For example, when Ethereum’s value plummets, that won’t mean all your other altcoins would have the same trajectory.

When you diversify your cryptocurrency portfolio, you won’t suffer from a big loss. 

3. Do not think of cryptocurrency as “easy money”

While it’s true that cryptocurrency helped a lot of people become millionaires, that is not always the case.

A lot of people have also lost millions because of crypto.

Just like any form of trading, there’s nothing easy about it and anyone who says making millions can be done in an instant is simply diverting you on the path to making a huge mistake. 

One of the golden rules of investing we’ve learned along the way here at Grit PH: Only invest the money you are willing to lose.

4. Don’t trade for no reason

Initiate a trade only when you have a good reason for it and if you have a clear strategy going in. Not all trades result in gains due to the economy being a zero-sum game, even if it’s cryptocurrency.

With altcoins, the market is mostly driven by whales—individuals who trade big. Whales wait for the small fish—ordinary traders—to make mistakes, after which they capitalize and earn from the mishaps of others.

Do know that if you wish to trade on a regular basis, you will suffer losses. However, it’s best to trade and lose than not trade at all since the experience is what you truly earn.

5. Learn about risk management

As with any kind of trading and investing, risk is always a factor. Therefore, you should know how big returns usually come with big risks.

Becoming a successful trader is not in being lucky with big trades that net you big profits, but putting together trades that net you small profits that add up to big profits down the line.

Being able to manage risk wisely doesn’t just apply to cryptocurrency investment, but with investment in general. As you learn your way around, you get to know certain things like how you should never invest more than just a smidge on a non-liquid market, which would be very high risk.

You try those markets out with great cautiousness to see if there’s something to learn from it. Otherwise, you stick to what you know works.

6. Overcome FOMO (Fear of Missing Out)

You may be getting that faint feeling of remorse for not having thought of investing in Bitcoin before 2016? The fear of missing out tends to come up when you come upon a new market and contemplate on whether you should get into it or just wait and see.

Having felt regret of not jumping onto a prospect before, you may then start to push hard for something, even if it turns out that was actually a dud.

The fear of missing out makes you want to get into new ventures not simply with hopes of cashing out big later on, but also because you don’t want to miss out on that potential down the line.

The problem is that feeling will always be there, whether you’re investing in cryptocurrency or something else or you’re running a business. It can make you go with decisions that may not be prudent and actually yields bad results in the long term because you fear missing out on something big.

If you “missed out” on something, don’t feel too bad about it. No one is psychic and people are always playing the market with imperfect information.

Such things happen to everyone, and there’s no use crying over spilled milk. Become familiar with that feeling and don’t fall prey to it.

7. Due Diligence

When thinking of pursuing a new endeavor, especially one that deals with money, serious due diligence is required.

We’re not claiming to be experts in the field of Cryptocurrency. Rather, this article hopes to share insights on these new technologies and emerging markets for those who are interested.

Having a set of rules and guidelines may help in keeping the flow of data uniform and allow you to make better analysis and draw comparisons in an efficient manner.

There is no fixed or universal methodology in conducting cryptocurrency or altcoin research. But here’s a quick guideline on how to do it effectively.

Step 1: Gather and filter information

Does the alt coin’s site look legit? Does it look professional?  While the site itself may look OK, be mindful at analyzing content that appears on it.

Don’t be too impressed with jargon that may aim to obfuscate the main vision. Check the team behind it and analyze their roadmap. Make sure what they have so far aligned with their target.

Study their white paper and business development plan. Your goal is to have complete understanding of what this altcoin does.

Is it valuable? Is it addressing a need? Solving a solution? These are questions to ask and should be addressed in their website clearly and convincingly.

If you feel like their product does not really benefit from or require blockchain technology, be wary.

Also, look if the founders received a big portion of the float, promises of big pay out, or unclear explanation of who can use the coin. These may be indicators that this coin is not up to its hype.

Using a blockchain explorer, analyze the distribution of tokens across accounts. Are the large ones are selling? Holding? Which one is the founder’s account and which one is the foundation?

These are steps for figuring out the activity of the altcoin’s tokens.

As always, Google is your friend.

However, be extra careful and vigilant in your research and stick to true authority sites for data and feedback.

Also, sites like Reddit (the altcoin will probably have its own subreddit), 4chan Biz,  BitcoinTalk, and GitHub may be good places to obtain user insights and gauge activity on the product.

Step 2: Create an Investment Checklist

The first step aims to separate the wheat from the chaff. Once you have sufficient information on an altcoin you think looks promising, it’s time to run it through a gauntlet of questions that aims to establish critical areas of concern.

This is a more focused approach in determining if it’s worth investing on. To give you an idea, here are some samples.

• What is the altcoin trying to accomplish?
• What is it trying to solve or improve upon?
• Who built it? Who are the members? What is their track record?
• How was the company funded?
• What does their organizational structure look like?
• What’s their competition like?
• How big is their target market?
• Will it scale to their target market based on their roadmap?
• Are there any similar products out there?
• Does the coin have any weaknesses? What are its strengths? Does it have potential problems?
• How exactly does the underlying mechanism work?

Step 3: Use a Standardized Valuation System for Analyzing an Altcoin’s data

Having a system that can consistently help you evaluate data may help in doing a more thorough analysis and comparison.

Try searching for some examples online and asking around in forums for feedback. If you find one that works for you, you can use it stand alone or in combination with another system.

Again, it’s a matter of preference here and there’s no one system that can magically appraise all altcoin data and performance correctly.

The takeaway here is to have a system for helping you analyze data better.

Step 4: Continuous Education and Research is Key

Staying on top of the crypto market and avoiding pitfalls are never a sure thing. There will always be winners and losers at any given time.

Be wary of the hype train, you’ll never know where it may lead. Perhaps the best you can do is increase your chances of wins through continuous analysis and exposure to legit data and hope it translates to improved predictions on your end.

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Cryptocurrency Investing FAQs

Still got questions about cryptocurrency? We’ll answer them below.

How do I store my cryptocurrency securely? 

Using a hardware wallet is the best way to keep your crypto secure because it stores your private keys offline, making it less vulnerable to hacking attempts.

What are the risks associated with cryptocurrency investing? 

The risks associated with cryptocurrency investing are similar to those of traditional investments. These risks include market volatility, regulatory uncertainty, and liquidity risks.

It’s worth noting that there are also unique risks that come with investing in cryptocurrencies, such as the potential for exchange hacks, wallet theft, and scams.

How do I choose the right cryptocurrency exchange to use? 

Choosing the right cryptocurrency exchange can be a daunting task, but here are a few tips to help you out.

Firstly, make sure the exchange is reputable by doing your research and reading reviews from other users. Look for exchanges that offer high levels of security and have taken steps to prevent hacking attempts.

It’s also important to consider the fees associated with using the exchange, as these can vary widely.

Additionally, make sure the exchange supports the cryptocurrencies you want to trade.

Finally, consider the user interface and ease of use – you want an exchange that is user-friendly and easy to navigate.

By taking these factors into account, you can choose an exchange that is safe, reliable, and meets your needs as an investor.

How do I minimize my risks when investing in cryptocurrency? 

When it comes to investing in cryptocurrency, it’s recommended to diversify your holdings by investing in multiple cryptocurrencies instead of just one. This will help spread out your risk across different assets.

Second, stay informed about the market and any regulatory changes that may affect your investments.

Finally, only invest what you can afford to lose and avoid investing with borrowed money. This can lead to significant losses in case of market downturns.

How do I know when to buy or sell my cryptocurrency? 

Knowing when to buy or sell your cryptocurrency can be a challenging decision to make, especially for beginners. However, there are some strategies that investors use to make informed decisions.

One approach is to use technical analysis, which involves studying charts and indicators to identify patterns and trends in the market. This can help you time your trades and make informed decisions.

Another approach is to pay attention to news and events that may affect the value of your investments.

Ultimately, it’s important to have a clear investment strategy and stick to it, rather than making impulsive decisions based on emotions or rumors.

How do taxes work with cryptocurrency investing? 

In the Philippines, cryptocurrency holdings must be declared during annual tax filings.

The government has also imposed a capital gains tax of up to 15% on cryptocurrency transactions.

Can I use my cryptocurrency to purchase goods and services?

Although not all merchants accept cryptocurrency, you can use your cryptocurrency to purchase goods and services from merchants that accept digital currencies as payment.

How much should I invest in cryptocurrency? 

The amount you should invest in cryptocurrency depends on your financial circumstances, risk tolerance, and investment goals.

It’s recommended to only invest what you can afford to lose, as the market can be very volatile and unpredictable.

Some investors may choose to start with a small amount (P1,000 to P5,000) and gradually increase their investment as they become more comfortable with the technology and the risks involved. 

How long should I hold onto my cryptocurrency investments?

As with the amount of money you should invest in crypto, the timeframe of your investment depends on your investment goals and strategy.

Some investors choose to hold onto their crypto for the long term. These people believe that the value will continue to rise over time.

Others may prefer to take a more short-term approach, buying and selling based on market trends and news. In the crypto market, it’s also crucial to keep the bear and bull markets in mind.

What are some common mistakes to avoid when investing in cryptocurrency? 

Not doing your research and blindly following advice from social media or other sources can lead to poor investment decisions.

FOMO, or the fear of missing out, can also lead to impulsive decisions that may result in significant losses.

How do I keep up-to-date with the latest developments in the cryptocurrency market?

One way to stay informed is to follow reputable news sources and industry experts. Joining online communities and forums dedicated to cryptocurrency can also provide valuable insights and information on the market.

By staying informed and keeping a pulse on the market, you can make more informed investment decisions and minimize your risks.

Is cryptocurrency investing a good fit for me and my financial goals? 

Cryptocurrency investing may be a good fit for those who are willing to take risks. As with other investments, remember that investing in cryptocurrency is not a way to get “easy money.”

Ultimately, it’s important to carefully consider your investment goals and risk tolerance before deciding whether or not to invest in cryptocurrency.

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Conclusion

If you made it this far, thanks for reading. You do have a genuine interest in investing in cryptocurrencies.

At the start, some of us may find the world of Cryptocurrency a bit hard to grasp. But don’t let that intimidate you.

Getting into cryptocurrency these days is easy due to the wealth of information and the global community that surrounds it, both of which are easily accessible on the Internet.

However, as with most investments, it’s not just some get-rich-quick scheme, even when it’s something as radical and envelope-pushing as cryptocurrency.

In order to enter, survive, and thrive in the cryptocurrency world, you must know what it’s about, why you should add it into your investment portfolio, and both the principles and nuances of cryptocurrency trading.

If you’re really keen on knowing more and possibly investing in crypto, you should truly understand the science behind it first.

Due diligence is key.

And hopefully, you may find this guide useful in doing your research and creating your strategies.

1. SEC.gov
2. Power Technology