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Two Simple Ways to Invest in Crypto's

by , 03 March 2021
Two Simple Ways to Invest in Crypto's
One of the most frequent questions I receive is…

“Where can I buy Cryptocurrencies”?

Cryptos are a relatively new asset class, but they are certainly gaining widespread traction.

And as the market continues to grow, more ways to invest in cryptos will be available.

But for now, here's two simple ways to add cryptos to your wealth-building strategy…

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#1: Individual Cryptocurrencies
This is the most popular way people invest in cryptos.
It’s also in my view, the riskiest – especially when buying smaller altcoins.
These types of cryptos experience rapid price movements – both up and down.
But the advantage of this is… you only need a small amount of money to make BIG returns. I’m talking R500 or even R1,000.
On the other hand, if prices crash, you won’t feel as bad if you invested R10k and lost most of it.
So how can you buy cryptos?
In SA, there are a few exchanges that allow investors to buy cryptos. For example, the most popular exchange – Luno – allows you to buy Bitcoin, Ethereum, Ripple, Bitcoin Cash, Litecoin and USD Coin.
Ice3x exchange on the other hand, allows you to buy the same as Luno, plus, Dash, DodgeCoin, Cardano, NEO and Binance Coin.
All these cryptos are in the top 20 by market cap, which makes them much more popular with traders and investors.
#2: A Crypto “ETF”
Developed by two South Africans, Earl Loxton and an ex-CEO of FirstRand and venture capitalist, Michael Jordaan, the EC10 token is a unique investment.
You can think of the EC10 token like an ETF.
Where an ETF tracks a basket of securities (stocks, bonds, commodities etc.) listed on an index, the EC10 token tracks an index made up of the top 10 cryptos by market cap.
Just like an ETF, investing in the EC10 token doesn't mean you own the underlying assets/cryptocurrencies in the EC10 Index. The token is a digital representation of the value of your investment in the collection of cryptocurrencies that are in the DCX10 Index.
The Index is made up of the 10 largest cryptocurrencies by market cap.
One advantage crypto investors receive is diversification.
If you’re not familiar with cryptos, you get different types. The main ones being, currency and platform.
For example, Bitcoin and Litecoin are currency cryptos. While Ethereum, and Stellar are platform cryptos.
There’s another cool thing about the EC10 index…
It automatically rebalances every month!
It’s also been a stellar performer – up 288% in 6 months, 368% in one year and 835% over two years.
You can invest in the EC10 through EasyEquities. Other than the usual small fee you pay when buying on the EasyEquities platform, you’ll also pay a 1% annual fee - kind of like TER on an ETF.
The verdict?
The DCX10 token is a great investment for any investor keen on getting exposure to cryptos.
It gives you access to cryptos that aren’t available on SA exchanges.  And you can invest with as little as R100.
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If you do decide to invest in cryptos, make sure you follow these three takeaways…
Key takeaway #1: Never invest more money than you can afford to lose.
Key takeaway #2: Use rand cost-averaging – This basically means buying a certain amount every week or month, no matter what the price is at. That way, you don’t need to try time the market.
The reason this tactic works well in the world of crypto is it’s incredibly difficult to know how long a run or a crash will last.
Key takeaway #3: It’s a good idea to have some buy and sell prices in mind. So decide what price you’ll be happy selling at and when your crypto hits that number sell a portion of it.
Many people, for example, choose to sell 50% when their investment doubles in value. This way, you’ve made your money back, and then invest the rest and feel more comfortable.
See you next week.
Joshua Benton,
Managing Editor, The South African Investor

Two Simple Ways to Invest in Crypto's
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