Beginner Crypto Portfolio
A simple beginner crypto portfolio to get started as a crypto investor, inspired by Punk6529
Many people who want to invest in crypto often do not know how to get started. There are so many different coins, projects, and pieces of advice out there to choose from.
I came across a tweet from Punk6529 with great advice for beginners on how to get started investing with three great coins: Bitcoin, Ethereum, and Solana. This advice has to be taken seriously, since Punk6529 is a true crypto luminary inspiring and leading the space of crypto and NFTs for over a decade.
To save you the time to open your Excel, here is a little tool that always shows the ratio of those three coins, updated every hour, together with sample investments for different tiers.
If you have any remaining questions, please see the FAQ section at the bottom, where I have explained all terms used to better understand this beginner portfolio recommendation.
Frequently Asked Questions
Is it a good idea to invest in Bitcoin, Ethereum, and Solana?
Investing in Bitcoin, Ethereum, and Solana might be a good idea to start off for beginners because they offer a balanced mix of stability, innovation, and growth potential. Bitcoin serves as a store of value and has the highest market cap, providing a foundation of stability. Ethereum, with its robust smart contract functionality, powers a vast ecosystem of decentralized applications (DApps) and decentralized finance (DeFi) platforms. Solana offers high transaction speeds and low costs, making it attractive for new and scalable applications. This diversification helps mitigate risks and leverages the strengths of each cryptocurrency.
Who is Punk6529?
Punk6529 is a crypto luminary celebrated for his high moral standards and advocacy for the freedom to transact without censorship. A key figure in the NFT and cryptocurrency communities, he champions decentralization and the development of an open metaverse. Known for his educational efforts and insightful advice, Punk6529 promotes a vision of a free digital economy. Through his pseudonymous identity, he shares his expertise and values via social media platforms like Twitter.
What does Punk6529 mean by "Buy NFTs you can plausibly imagine proudly handing down to your children"?
Punk6529 suggests focusing on NFTs with lasting value, such as:
- Historical NFTs: Projects like CryptoPunks, which are among the first NFTs ever created.
- Artistic Quality: Works by renowned digital artists like Beeple or XCOPY.
- Cultural Significance: Collections like Bored Ape Yacht Club that have strong cultural relevance.
- Innovation and Utility: Projects offering unique features or utility, such as Decentraland.
- Strong Community: NFTs backed by active, engaged communities, ensuring long-term support and growth.
What are NFTs?
NFTs (Non-Fungible Tokens) are unique digital assets representing ownership or authenticity of items like art, music, or collectibles. They gained prominence with projects like CryptoPunks and CryptoKitties in 2017. Technically, NFTs are digital files, often images, stored on decentralized blockchains. Ethereum is the leading blockchain for NFTs, but others like Binance Smart Chain, Solana, and Flow are also popular. Ownership is secured by having the private keys to the smart contract stored in your digital wallet, allowing for the verification and transfer of these unique digital items across various blockchain networks.
Where can I learn about NFTs?
In the fall of 2022, a comprehensive MOOC (Massive Open Online Course) on NFTs and the Metaverse was launched, led by the crypto luminary Punk6529. The course offered extensive insights into these cutting-edge technologies, exploring the technical aspects of NFTs and explaining how they represent unique digital assets such as art, music, and collectibles, stored on decentralized blockchains. It also covered the concept of the Metaverse, a virtual world where users can interact, create, and transact using digital assets and NFTs. This educational initiative aimed to equip learners with the necessary skills to navigate and participate in the evolving digital economy. All videos and presentation materials from the course are available for free. For more details, you can visit the Github MOOC University.
Why does Punk6529 discourage from using leverage?
Leveraging in crypto involves borrowing funds to increase your investment's potential return. While this can amplify gains if the price of the coin rises, it also significantly increases the risk. If the price drops and reaches the liquidation point, you can lose your entire investment. Due to the high volatility of cryptocurrencies, it is generally advised to avoid leveraging to prevent the risk of rapid liquidations and substantial losses. The comment from Punk6529, "that a weekend like this does not freak you out," refers to a sudden drop in price of 25% over a few days, highlighting how quickly the market can turn and the associated risks of leveraging.
What does the metric "Market Cap" represent?
"Market Cap" (market capitalization) represents the total value of a cryptocurrency. It is calculated by multiplying the current price of the coin by the total number of coins in circulation. This metric provides an estimate of the overall size and value of a cryptocurrency, helping investors compare the relative size of different cryptocurrencies. A higher market cap generally indicates a more established and valuable cryptocurrency.
What is Ethereum?
Ethereum is a decentralized blockchain platform that allows developers to create and deploy smart contracts and decentralized applications (DApps). Smart contracts are self-executing contracts with the terms of the agreement directly written into code, which run exactly as programmed without any possibility of downtime, fraud, or interference. An example of Ethereum's use is in decentralized finance (DeFi) applications, which allow users to lend, borrow, and earn interest on cryptocurrencies without relying on traditional banks. Another example is the creation and trading of non-fungible tokens (NFTs), unique digital assets that represent ownership of specific items like digital art.
What is Solana?
Solana is a high-performance blockchain platform designed for decentralized applications (DApps) and crypto-currencies. It is known for its fast transaction speeds and low fees, making it an attractive option for developers and users. Solana achieves this efficiency through its unique consensus mechanism called Proof of History (PoH), which enhances the scalability of the network. An example of Solana's use is in the realm of decentralized finance (DeFi), where it supports applications that enable users to trade, lend, and borrow cryptocurrencies quickly and cheaply. Another example is its use in creating and trading NFTs (non-fungible tokens), similar to other blockchain platforms like Ethereum but with lower transaction costs.
What is Bitcoin?
Bitcoin is a decentralized digital currency that operates without a central authority or banks. Created in 2009 by an anonymous entity known as Satoshi Nakamoto, Bitcoin enables individuals to exchange value directly with each other over an untrusted network without the need for intermediaries. It is permissionless, meaning anyone can participate in the Bitcoin network. Transactions are verified by network nodes through cryptography and recorded on a public ledger called a blockchain. Bitcoin is often referred to as "digital gold" due to its limited supply of 21 million coins, creating scarcity and potential value.
What is a portfolio?
A portfolio in the context of cryptocurrency is a collection of various digital assets, like Bitcoin, Ethereum, and Solana, that an investor holds. The idea comes from traditional finance, where portfolios diversify investments to manage risk and optimize returns. In crypto, a well-balanced portfolio aims to spread investment across different cryptocurrencies to mitigate risk and leverage the potential growth of multiple assets. Historically, portfolios have helped manage risk by diversifying investments across various asset classes, and the same principle applies to crypto investments.
Why Choose Us?
Our coaching stands apart from the rest, as we employ a deeply empathetic approach that allows us to meet you at your skill level.