Investing in cryptocurrencies has been one of the wildest rides I’ve been on. The price swings are so volatile, I’ve experienced exhilaration, extreme anxiety, and everything in between.
But one thing I know for sure: I have no regrets about investing in cryptocurrencies. Especially because I accumulated most of my stash for free/ in exchange for labour.
Here’s what I take into consideration to decide which cryptocurrencies to invest in. At the end of the article, I’ll also share the safest way to invest in cryptocurrencies. All standard DYOR disclaimers apply.
#1 – Prioritise Bitcoin (BTC) and Ethereum (ETH)
If you die die don’t know which cryptocurrencies to invest in, then let me just say, start with Bitcoin and Ethereum. Crypto is risky, but they’re the safest of the lot.
Why did I say that? Because, I have observed Coingecko’s Top 10 Ranking since 2015, and Bitcoin and Ethereum have consistently stayed in the #1 and #2 spots, while other cryptocurrencies come and go. That means they have staying power, they have reputation, they have strong community.
If we dissect numbers 3-10 in the current Top 10 Ranking,
- 2 are stablecoins – Tether (USDT) and USD Coin (USDC) (both pegged to USD1)
- 2 are private companies – Binance (BNB; crypto exchange) and Ripple (XRP; remittance network)
- 3 are Ethereum rivals – Solana (SOL), Cardano (ADA) and Polkadot (DOT)
- 1 is memecoin – Dogecoin (DOGE) (just the week before, both DOGE and SHIB made it in the Top 10 Ranking)
Past, and probably Future Top 10 Ranking will likely follow the same format:
- No #1 – Bitcoin
- No #2 – Ethereum
- A combination of private companies, Ethereum rivals and/or memecoins
- And/or whatever is trendy or hyped up at the time (new blockchain use cases, new dApp platforms, whatever)
Does this mean I don’t get cryptocurrencies aside from BTC/ETH? Not at all. I do get them – some projects are so interesting and you need tokens to participate.
But I go in with the understanding that the project might fail and/or the value might drop and never recover. Any cryptocurrency can be popular now and even be in the Top 10 Ranking, and still face the chance of dying out. I’ve seen it happen again and again.
When this happens, losing money is not the only annoying part. It also sucks because no one likes to be wrong in a project they actually liked, ESPECIALLY if one is a strong believer and community member. So it’s like double pain 🙁
So keep this in mind: You can get ANY cryptocurrencies you want, as long as you accept the risk of losing it all. Sure you can do whatever you want with your money, but it’s probably wise to not go all-in in a single cryptocurrency aside from BTC and ETH.
#2 – Cryptocurrencies ‘vouched’ by licensed crypto exchanges in Malaysia
Nothing to shout about here. I own all the cryptocurrencies offered in licensed crypto exchanges in Malaysia – BTC, ETH, LTC, XRP and BCH. The way I see it, if they have passed SC’s extremely strict guidelines, they’re good enough for me.
Yes, even XRP. Not the biggest fan, but yes I have a little bit.
#3 – Cryptocurrencies that I can use to earn
Aside from Bitcoin and Ethereum, I also like to own cryptocurrencies that can be used for earning, especially for staking and yield-farming purposes. These include:
- Ethereum (ETH) – Example DEX: UnisWap. I’ve yet to do here though as the gas fees alone is >$100++ per transaction.
- Binance Coin (BNB) – Example DEX: PancakeSwap. Fairly straightforward to learn, low fees (10 cents or so per transaction).
- Polygon (MATIC) – Example DEX: QuickSwap. Took me some time to understand but fees are very low (less than 1 cent per transaction!).
There are other ways to earn with cryptocurrencies aside from staking and yield-farming, such as trading, Play-to-Earn and NFT flipping ( DeFi world is so big; see below). My personal view is it is awesome to learn how to earn beyond hodling (although there’s nothing wrong with just hodling, you diamond hands you!).
Note: Staking and yield-farming are both terms used in DeFi, or Decentralised Finance. In case you don’t know what it is:
- Staking is kinda sorta like fixed deposit where you earn by ‘locking’ your cryptocurrencies in exchange for profit
- Yield-farming is kinda sorta like earning from being a liquidity provider (a fancy term that basically means, you supply money for borrowers)
Extra: My staking and yield-farming experience
For example, one of the things I’m doing is staking $CAKE in PancakeSwap, one of the DEX (decentralised exchange) using Binance Smart Chain. There are many tutorials online so learning it wasn’t that hard, and honestly, it is so worth knowing how to do this for freaking double-digit APY (annual percentage yield).
Simplistically, what you need to earn money by staking at PancakeSwap is:
- Some cryptocurrencies (you can get BTC, ETH, LTC, XRP and BCH from one of the licenced exchanges in Malaysia)
- Binance account (so you can exchange to BNB)
- Metamask wallet installed with Smart Chain aka Binance Smart Chain. Here’s how to install Smart Chain in Metamask (so you can interact with PancakeSwap)
- And you can pretty much exchange your BNB for whatever token you want and start staking in PancakeSwap ($CAKE is a popular option, but only one of many)
(Should I do an in-depth, step by step guide on how to do staking? Let me know in the comments)
You might see some people talking about extremely high APYs, sometimes going up to EIGHT DIGITS or more (???). Of course, those gains only come with riskier pools and platforms. Plus you also have the overall crypto market to worry about.
I also want to mention that earning is not guaranteed, especially during volatile crypto market seasons. I should know, I’ve lost some money along the way 🙂
I can’t stress enough that you need to learn bitcoin first before you do this DeFi stuff. Bitcoin knowledge is the primary level info and DeFi is like degree level, so don’t skip steps.
- If you’re new, check out my The ULTIMATE Cryptocurrency in Malaysia Guide  article
- Then, check out my I Am Self-Learning DeFi (Decentralised Finance). Here’s Why. article
- Then, check out the section on non-custodial wallet in my Binance Ban in Malaysia: 4 Options You Can Take article
IMPORTANT: You NEED to be super clear about networks, because transferring your cryptocurrencies to different networks (for example, from Ethereum to Smart Chain) may cause you to lose your crypto!
For example, you can only send ETH on the ETH network – some people have tried to ‘save money on fees’ by using another network. It won’t work – if you’re lucky the platform will stop you, but if not you will be responsible for your own loss. Imagine it like train tracks, and only the ones with the right wheels are compatible.
Which cryptocurrencies do you invest in? Why?
To recap, here are cryptocurrencies I currently own, divided into Hodl, Earn and Fun:
- Hodl: BTC, ETH (biggest chunk) plus LTC, XRP, BCH
- Earn: BNB, MATIC, and whatever is needed to stake/pool, including but not limited to CAKE, TUSD, USDC, QUICK, WEX and more
- Fun (combined, max 1% of crypto portfolio): Whatever I feel like speculating/experimenting with at the time. I’ve had DASH, STEEM, AAVE, GHST and more. If I’m into memecoins, I’d include them here as well
So those are my guidelines in deciding which cryptocurrencies to invest in. How about you? What guidelines do you follow? I would love to hear your strategies and tips!
Of course I can’t end this article without the obligatory disclaimer and again, a reminder to practice safe investing. Speaking of which,
The safe way to invest in cryptocurrencies
If you want to be really safe about it, sort out your EPF, PRS and SSPN first, then your ASB/ unit trust/mutual funds/ ETFs (easy via robo advisors), BEFORE doing a fun investment of your choice, including cryptocurrencies.
(Yes, I do consider cryptocurrencies as ‘fun’ investment – it’s exciting because it includes an element of risk, speculation and some level of geekiness (aka people who do it and are good at it are obsessed with learning, including the technical side). Other investments I grouped as ‘fun investment’ also includes stocks (trading, warrants etc), gold and property.)
It’s not a bad idea to use this DIY investor scenario as a guideline. Do #1-5 first before you do #6.
Alternative way to safely invest in cryptocurrencies
Otherwise, you can also use the ‘not more than 5%‘ rule. If you have RM10000 to invest, then only start crypto with RM500.
(Hack – get 10% ROI immediately. Buy RM500, get RM50 in BTC with my code ‘LNSURAYA50′ (valid for new users only). Steps: Open a new account at Luno.com > Go to REWARDS > Choose ENTER CODE > Enter the given promo code > Click Apply Code > Deposit the minimum amount required > Buy the minimum transaction amount > Get rewarded with the additional Bitcoin.])
Okay, this is where I’ll end it. Remember to like, comment and share this article if you like it, and let me know what you want to read next!