Schooled by Breach 001: Where to start your crypto journey. Let’s figure out crypto together

Welcome to Schooled by Breach! Our latest weekly newsletter where Breach writer, Adetomiwa talks to people with experience about pressing crypto questions, learns a lesson and shares the findings with you. Crypto can be easy, so let’s figure it out together. Out every Friday

TL;DR

Investing in crypto can be for everyone, but natural sceptics like myself can start small. Investing little amounts (somewhere around 2% of your investment portfolio) and slowly increasing how much you invest as you learn more about cryptocurrency investments will help you get more comfortable and ease some of your fears.

I’m not much of a risk-taker. I cannot make a decision without weighing the risks. For me, this manifests as an intense dislike for spontaneity, a preference for restaurants that list all their ingredients on the menu and, most importantly, decisions about my spending/investing my hard-earned money that carry little to no risk. And if I do choose a high-risk investment, I have to know everything about it (or at least have the comfort of knowing whose shirt to hold).

But every investment expert — and my finance degree — claims that some somewhat speculative but high-reward investments are essential if your goal is to multiply your wealth beyond your 9–5 because attached to those risks are benefits that could pay off bountifully.

One of the dominant characteristics of high-risk investments is volatility, so it makes sense that people like me are hesitant about Bitcoin and other cryptocurrencies. But I don’t think it should be that way — if crypto is truly all about inclusiveness, it should have a place for people like me, right?

So I decided to ask the experts. As a risk-hesitant person, how can I invest in crypto?

I asked my colleague and seasoned crypto content creator, Adeniyi Olowoporoku, to help out. Adeniyi says one of the reasons people are sceptical about crypto is the lack of sufficient information. “When you have enough information, you know how to store your crypto, how to convert from crypto to fiat [technical word for regular money like dollars] to various cryptocurrencies, and you can confidently select assets you trust.” rather than relying on hearsay.

To help, Adeniyi advises following websites and content creators that make learning crypto easy and fun (Shameless self-plug: This is where Breach’s Breach Basics series can help! Breach also has a community to help readers grow in crypto together). Additionally, he suggests signing up on websites like FreeBitcoin, where you can earn as you learn about crypto.

The Breach Community pays you to learn! Start here

In addition to education, another tip I got is to ease myself into the world of crypto investing.

Personal finance writer Katie Brockman says for sceptical investors like me. The more popular cryptocurrencies might be the best place to start dipping our toes. Bitcoin is well-established and widely known, so it carries a lot less risk than smaller coins (generally referred to as altcoins). Ethereum and Solana are also great options — they house many other crypto projects, so they are, by nature, diversified.

Adeniyi agrees. He adds that I can start my crypto investment journey through Stablecoins. Stablecoins are a type of cryptocurrency backed by a physical, stable asset, so they are not as volatile as regular cryptocurrencies. Some popular ones are USD coin (backed by the US dollar) and Paxos Gold (backed by gold).

Learn how to buy your first crypto

Both Brockman and Adeniyi however point out that for any investor — sceptical or carefree — a great practice is diversifying your investments with some traditionally low-volatility investments like Bonds, and some more volatile ones, too. This creates a cushion of certainty that will help ease any anxiousness. Adeniyi suggests we sceptics start by allocating about 2% of our investment money to crypto and work our way up as we get more familiar with the crypto-verse.

“The danger, like with any investment, comes when you put all your money eggs in one investment basket”, says Adeniyi. “You can start small — with money you don’t need immediately, and work your way up to a percentage you’re comfortable with”, he adds.

Breach Picks:

Here are links to articles and websites mentioned in this newsletter (ICYMI 👀) and additional reading material.

• Deep dive into Stablecoins by Breach
• The difference between cryptocurrencies and Altcoins by Breach
• Creditdonkey’s list of websites where you can earn as you learn about crypto
• Katie Brockmans’s column on The Motley Fool
• A Bitwise investments paper on how a traditional investment portfolio would perform with 5% allocated to Bitcoin