What a crypto executive wishes investors knew before buying bitcoin for the first time

What a crypto executive wishes investors knew before buying bitcoin for the first time

Bitcoin is trending upward again, with the cryptocurrency briefly topping the $60,000 mark for the first time ever on Saturday. As recently as September 2020, one bitcoin was worth just over $10,000, and the recent rally has prompted more investors to get into crypto for the first time. But many new investors are jumping feet first into the volatile crypto market without being fully aware of what they’re getting into. CNBC Make It spoke with Adam Traidman, CEO and co-founder of BRD, a popular crypto wallet that boasts more than 7 million users, about the biggest mistakes he sees newcomers making, as well as some tips to avoid them.

They’re surprised by bitcoin’s volatility

Bitcoin is prone to major valuation swings as whales — the term for large institutional investors — buy and sell massive quantities. New investors should go in with clear eyes and brace themselves for major dips and spikes. Traidman says that anyone considering buying bitcoin should get familiar with its movements so as to not get scared into selling their holdings if they see a drop soon after they buy. “[When bitcoin broke] $50,000, a bunch of new people bought in, and then you had savvy whales who took their winnings and caused a pullback,” he explains. “And then some spooked investors sold, and the whales bought back in [at a lower price].” New investors should strive to be unfazed when they see major movements, whether they’re positive or negative, Traidman says. “Be aware that if you put in X amount of money, there will be a time when you open your wallet and are down 30%,” he says. “There will also be a time when you’re up 2x.”

They don’t go in with a plan and let themselves get greedy

One of the most important things a new crypto investor can do is know their goals. Too often, Traidman says, new investors get enamored by quick increases in the value of their holdings and decide to see if it goes up any more. Instead, they should sell if they hit their targets. “When you have a situation where your money is up 2x or 3x, you’ll think that it was too easy,” he says. “Stick to your guns and don’t get greedy. If your goal is 2x [growth], and you hit that, sell it and be thankful that you hit your number.” He adds that new investors often get caught up in the day-to-day fluctuations of the coin. A better strategy, Traidman argues, would be to “buy, hold and forget about it” for at least a year. “If you look at it every day, it can be nerve-wracking,” he says. “We crypto crazy people do that, but I don’t think it’s the right move for the average casual investor.”

They try to time the market

One of the biggest mistakes Traidman sees new investors making is trying to wait to buy bitcoin at the cheapest price possible, only to get upset if it goes even lower after they make their purchase. To avoid this, Traidman advises new investors to use the dollar-cost average strategy — buying a little bit of bitcoin every day at a wider range of prices — to build their holdings over time. “Don’t just go in and buy $5,000 worth of bitcoin,” he says, adding that it is more helpful psychologically to not have a single price at which you bought bitcoin that your brain fixates on. He adds that there’s no amount of bitcoin a person can buy that makes it a good or bad investment, and that investors should only buy as much as they’re comfortable losing if its value were to drop.

They get sucked into the world of altcoins

$5.7M stolen in Roll crypto heist after hot wallet hacked – TechCrunch

A security breach at cryptocurrency platform Roll allowed a hacker to obtain the private key to its hot wallet and steal its contents — worth about $5.7 million.

In a statement, the company said it was investigating the breach, which happened early Sunday.

“As of this writing, it seems like a compromise of the private keys [sic] of our hot wallet and not a bug in the Roll smart contracts or any token contracts,” the statement said. Roll said the attacker had already sold the tokens for Ethereum.

“There is no further user action suggested at this stage. We are temporarily disabling withdraw from the Roll wallet of all social money until we have migrated our hot wallet,” the statement added.

It’s not clear how the attacker broke in and obtained the private key — akin to the password for Roll’s hot wallet. Hot wallets are designed to be connected to the internet to send and receive cryptocurrency, but typically only store a fraction of a cryptocurrency owner’s total reserves, given the inherent security risk of an internet-connected wallet. A cold wallet, or storage device that isn’t connected to the internet, is typically used for holding the bulk of an owner’s cryptocurrency for longer-term periods.

Roll allows creators to mint and distribute their own Ethereum-based cryptocurrency, known as social tokens, under which the creators can decide how the currency is spent. There are hundreds of different kinds of social currency on the platform, including $WHALE, $RARE and $PICA tokens — which plummeted in value in the aftermath of the breach.

The creator of the $WHALE token said in a tweet more than 2% of its tokens were stolen in the Roll breach, but that the hack was “minimally detrimental” to the project.

Others weren’t so lucky. One person said they had “lost everything,” while others criticized for not going far enough Roll’s new $500,000 fund to help affected creators.

Roll said it will hire a third-party to audit its security infrastructure to prevent another breach. “We will also run a forensic analysis to figure out how the key was compromised,” the statement said.

Early Stage is the premier “how-to” event for startup entrepreneurs and investors. You’ll hear firsthand how some of the most successful founders and VCs build their businesses, raise money and manage their portfolios. We’ll cover every aspect of company building: Fundraising, recruiting, sales, product-market fit, PR, marketing and brand building. Each session also has audience participation built-in — there’s ample time included for audience questions and discussion. Use code “TCARTICLE at checkout to get 20% off tickets right here.

CoinMENA Launch Crypto-Asset Trading Platform in the Middle East

The Middle East’s newest regulated crypto-asset trading platform, CoinMENA has officially launched. CoinMENA is both licensed by the Central Bank of Bahrain and certified by the Shariyah Review Bureau as Sharia-compliant. The trading platform’s services are currently available to residents of the Kingdom of Bahrain, United Arab Emirates, Saudi Arabia, Kuwait, and Oman, with a view to expanding to other countries in the MENA region.

CoinMENA allows users to deposit, trade, and withdraw crypto-assets in their local currency, such as the Bahraini Dinar (BHD), Emirati Dirham (AED), Saudi Riyal (SAR), Kuwaiti Dinar (KWD), and Omani Rial (OMR), while offering competitive fees on account of its relationships with the region’s banking institutions. The trading platform has access to deep liquidity pools that ensures even the largest of trades are executed and settled efficiently and promptly. Additionally, its maximum security measures via custodians, such as BitGo, guarantee that users’ crypto-assets are protected both online and offline.

At launch, CoinMENA offers five major crypto-assets: Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Litecoin (LTC), and Bitcoin Cash (BCH). For sizable transactions, the trading platform provides an “OTC Desk” offering, where a dedicated relationship manager will oversee every trade through to completion.

Dina Sam’an, Founder and Managing Director of CoinMENA, stated “CoinMENA addresses the gap that exists in the regional market today by allowing users to deposit, trade, and withdraw crypto-assets on a highly regulated and governed platform in a safe, trustworthy and transparent way.” As a nod to its team members, she also added, “The team comprises industry veterans that have been at the forefront of shaping the region’s blockchain and cryptocurrency industries. Our vision is to build a world-class platform and FinTech that contributes significantly to the development of such industries in the region”.

To mark its launch, CoinMENA offered rewards through its unique two-way referral program and ran for a limited time. The program allowed users to invite an unlimited number of friends, letting both parties earn rewards upon signing up and placing their first trade. CoinMENA’s sign-up process takes less than a minute and can be performed on its simple, seamless, and highly intuitive platform, which is designed for both beginners and professional traders.