Bitcoin and altcoin investors tend to measure their cryptocurrency gains in US dollar terms. While this is fine to do with Bitcoin, your altcoin investments should always be measured against Bitcoin to determine whether or not you generated value for yourself.
If you aren't keeping track of how your performance would have been had you just bought Bitcoin rather than your current investments, you are measuring your performance incorrectly and may be destroying more value than you know despite the fact your portfolio has doubled in US dollar terms!
In any other asset class out there, investors compare their returns against a relevant benchmark. Whether it's the S&P 500 or the Barclays aggregate, there is always a way to measure whether or not you're under or overperforming. With cryptocurrencies, the benchmark is Bitcoin. But you shouldn't just think of your profits in terms of Bitcoin: You should also think of basic TA in Bitcoin levels too.
The reason for this is because all other cryptocurrencies see substantial amounts of volume from their Bitcoin cross-currency pair. That means support and resistance lines, channels, moving averages, RSI and many other indicators are all measured in Satoshi levels rather than USD. The USD value you see on Coinmarketcap is just for convenience rather than utility. I cannot give you the equivalent USD level, as some requested in my last video, as any given Satohsi level for a cryptocurrency will vary widely depending on price of Bitcoin.
I provide more specific examples in the video, including a failed trade of mine that (to this point) has destroyed over 50% of value! I hope you enjoy and as usual, I look forward to your thoughts in the comments.
If you like my content, you can support me through using ANY of the affiliate links below (I receive small compensation). The beauty of affiliate links is that I can pick and choose what I like rather than have companies approach me - everything I linked below (with the exception of Trezor since I like Ledger), I use myself frequently.
My Recommended Hardware Wallets:
If you want to store your cryptocurrencies safely, the best way is through a hardware wallet. Seriously - look it up and you'll find plenty of information supporting this claim. There are alternatives such as paper wallets, but these are convenient and my choice for cold storage (offline):
Ledger Nano S: http://amzn.to/2hZPj0q
Ledger Blue (expensive): http://amzn.to/2hk7xst
I personally prefer the Ledger Nano S, but the Trezor is such a close second that it really doesn't matter which one you go with. Ledger Blue is premium and convenient, but not necessary.
My Favorite Book for Investing in Crypto:
This book is, bar none, my favorite book for investing in cryptocurrencies. It doesn't bog you down with technical jargon, but instead focuses on all the elements you should understand before you invest.
It's a comprehensive book for both beginners and experts. Beginners will find information about major cryptocurrencies (not just Bitcoin) as well as details on historical market events (that you can draw on for future) and events to watch for moving into the future. Experts will find the chapters on valuation particularly useful. For those of you involved in traditional investing, this book is even more of a godsend as finance info is explored (correlations with other asset classes, ETFs, etc).
My Recommended Exchanges: Coinbase / GDAX / Bittrex
If you sign up to Coinbase using link above, you and I will both receive $10 each after you buy your first $100 of Bitcoin using Coinbase. Coinbase is much less intimidating for beginners. Once ready, move up to GDAX for cheaper or zero fees. For altcoins, I recommend Bittrex.
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None of what I provide in my videos is investment advice. Please do your own due diligence.
Seeking Alpha: https://seekingalpha.com/author/truth-investor/articles
Are you making this mistake? Perhaps you did in the past? I'd love to hear your stories in the comments and your thoughts on whether Bitcoin levels are critical or not for investing in the cryptocurrency space. As usual, my written thoughts are in the description. Thanks for watching and remember to follow my Twitter for live updates: www.twitter.com/Truth_Investor
This has helped me get a little bit closer to understanding trading crypto and trading pairs more specifically. Do you understand or have an idea of when alt coins and bitcoin won’t always move up and down together? That’s kind of my next search.
You can withdraw daily here, it’s important not to exceed the daily limit, it’s usually 1-2 days for the money to come. The transaction fee for withdrawal on HitBTC is the smallest of all exchanges I know.
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Call me dumb but i still don't get it. So, if i had sold one LTC for BTC when the price of LTC was 178.38$ (0.01816210 satoshi), today when the price of LTC is 134,62$ (0.01602300 satoshi) i will have 134.78$ not 178.38$ worthing satoshi... That means 0,16$ profit for one litecoin... So i will be able to buy 1.13 LTC with that satosi... but i lost alot on money. If i had sold that one LTC for 178.38$, today when the price is 134.74$ i will be able to buy 1.33 LTC. So both ways when trading for BTC i lost fiat or alt. I am kind of new in this thing so don't judge me... :D
As for me - the better way to invest is taking part in airdrops and bounty programs like TokeGo etc....So you can test the product which you are looking to invest. Before spending you own money you can spend some time)
Why worry about measuring it against bitcoin? When you've reached the goal or amount of money needed, then sell and forget it. What were the millionaires in Puerto Rico using to measure their bitcoin profits before they sold?
@0:26 It is not a currency because it is not issued by any government but it becomes useless as money too because you cannot effectively purchase with it.
@0:48 That's not a good argument because € or $ are volatile too.
Honestly, best advice for bitcoin is to not just hold your bitcoin but invest them with something like Invertist, you can make like 3.6% return per week! You can find them on google, not gonna post any ref links :)
but isn't the US dollar the price it is because of manipulation? and why is a dollar considered Money when its really a Corporate Credit since the dollar is issued by the federal reserve a company which lends the credit on interest to the united states government.
it seems you are trying to trick people into investing in bitcoin because YOU are invested in bitcoin, you would actually make more money investing in altcoins than you would in bitcoins. your purchasing power is greater with cheaper altcoins than it is in bitcoin, you didnt destroy anything, if i dont invest in a stock that you are invested in am i destroying the stock?
Eye opener for the newbies thank you! Trading pairs are tricky in satoshi's. Trading pairs with USDT are more understandable, almost like registered stocks, ie., NYSE, Nasdaq.... This whole space is revolutionary including these trading platforms like GDAX, Binance, Bittrex, etc. Bots can eliminate so much of these conversions that are necessary to measure how your portfolio is really doing. Get Excited! Get involved! This is revolutionary and inspiring.
Okay my question about measuring blockchain currencies is if I invest in it then I should stop thinking about money like the US Dollar, the pound and the Euro etc as the currency I wish to earn, and instead plan to invest in blockchain currencies as the currency I wish to earn? Because measuring it against the US dollar, for example, is because I want to sell it and earn US dollars not more blockchain currencies. I want to do that so that I can by a car or a house or save for my retirement etc. If the blockchain currency is up but the dollar value is down then that is great for the blockchain but not great for my retirement fund. Unless, by the time I retire bitcoin replaces bank currencies.
What you seem to be saying is that bank currencies are going to be replaced by cryptocurrencies so invest based on their value against other crypto currencies.
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I'm so new to this but I'm trying not be hasty and buy coins without understanding how the pricing changes and fluctuations work. I downloaded a cryptocurrency market chart but I don't know what to look for.
Okay i bought ltc from Eth.. When eth was high and ltc was low. Now my ltc is little up but eth is low from previous value.. I sold it and i am in loss, instead of getting profit from ltc. I keep trading money when I have profit, but instead of making money, I loose everytime.. Can u help me?
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This crypto stuff sounds like a terrible idea. nobody understands it. lets stick with the cash money.
even the people trying to teach you cant explain how it works. its value goes up and down. sounds like a disgusting idea
who the hell wants to invest their life savings and take a chance of losing it?
lots of people will be scammed!
Your point of the video only holds true for people that never plan on cashing out. You should put a disclaimer on the video to prevent confusion.
If you ever plan on cashing out your method will cost people a ton of money.
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The problem I'm having wrapping my head around this is two fold: First off I want to generate wealth based on something I can actually use right? Like the USD. For simplicity sake, it wouldnt matter if I had 20 bitcoin, because I can't use it like USD. The purpose of investing is to better your position in USD right? My second problem here is that you are directly tying everything to BTC, as if BTC were the only real pair to any altcoin, and its not. You're right in saying that judging satoshis over USD shows performance, but all it shows is whether or not you should have invested in BTC or the altcoin. This logic can be applied to literally any investment. I can compare Ethereum to Apple Stock and decided which one would have been better gains. If I invest in an alt coin, and it the USD values doubles, but the satoshi halves, I have STILL doubled my money right?
But what if I'm not interested in Bitcoin and only want to increase my fiat?
I.e.: I buy XRP at 1,50$/XRP for 1000$. After XRP gains value and goes up to 3$/XRP I have XRP worth 2000$.
If Bitcoin performed 10x better or worse is not my concern. So how did I destroy value by changing the same amount of XRP back to fiat and having 2000$ cash at the end? I don't quite get it
i got a question: how is btc dominance relevante? i must be wrong, but it seems that it has a bigger market cap anyway, and that dosent mean anyone can make more profit in it as oppose to neo , for ex, last year
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If you’re holding bitcoin rather trading or not you are long. USD is the benchmark for everything. If it goes down an you’re not short ie it want from 20-10,000 in a short period. If you’re on the sidelines your not neutral. You are long by default. There’s no cash sweep vehicle and now most of these exchanges are closed to new investors.
Thank you for breaking the concept down - one thing you may have wanted to stress more was the idea of "you would of been better off buying BTC" by adding "Your goal is to build a larger amount of satoci = more BTH". If I am understanding you correctly. If not please correct me so I can learn. Cheers!
does anyone knows were can I find more info about THIS topic/video?? (I mean, I thought that it was more important to look after the USD price rather than satoshis, I just want to get a clearer explanation)
but won't the dynamics change if those other cryptocurrencies get paired with fiat on the exchanges? in other words, isn't the reason we're so concerned about gaining on satoshi simply because we essentially just want to make more fiat but a lot of these cryptos are pegged against BTC? and on a similar note, isn't it also possible that you've gained considerably in satoshi and therefore have more bitcoin yet if the price of bitcoin is lower than when you invested, you're technically still losing money?
tl;dr if using BTC as tinder to buy/sell shitcoins then disregard current USD valuation. The only value you're watching is % BTC gained or lossed in your trades.
USD value only matters at the time you're cashing out your BTC gains.
OK I understand bitcoin can raise and lower at the same time Ethereum and Alt coins fluctuate due to BTC & other factors. But I think I’m still fuc..d up somehow ? If I buy STRAT/ETH at 0.016792 or $14.2732 US and I want to set up a sell at $20.00 US + - & I set a sell with ETH @ 0.2355 & BTC drops to $5000.00 and tanks ETH tanks to $500 us that stop sell of STRAT selling at 0.2355 would be $11.77 US right !!! So with BTC fluctuating so much how would “YOU” set up a future or stop sell ?
I think I know the point you’re making with sats but it always doesn’t work out that you’re all coins outperform BTC !!!!!!
I COULD BE MISTAKEN / BUT I DON'T THINK SO ?????????????
The miners are interested in finding a nonce which will create a hash with certain characteristics. Lastly, they have to find a random value that they included in the header, which makes the computed hash over that header a value below a particular target. In other words, they do not have to agree to change the protocol. Though there are a few gold diggers attempting to fill their pockets and certain projects that aren`t viable and shouldn`t be encouraged in any way. For users running a complete node, it is a fairly painless procedure to upgrade the software to the newest version. The process of locating a new block to extend the blockchain is known as mining. Proof-of-Work systems utilize cryptographic hashing algorithms to create the action of mining a block a complicated computation. Our software is totally incompatible with altcoins. Changes and modifications to how that it works need to be approved by consensus and every CPU gets a vote. To start with, it`s essential to realize that hardware wallet users control entirely their private keys. Whether you`re bullish or bearish on Bitcoin Gold, you ought not lose your coins as a result of careless mistakes! On the 1 hand, it may result in making a coin that solves all the pending issues. There`s no currency or digital asset named Bitcoin Core. Bitcoin Cash increases the range of transactions that may be processed per block. You could send any quantity of money, any place in the Earth, almost at no cost. You`ve made some great money already on the market, but you want more. For a wealthy individual, BTC`s price premium may be viewed as a plus. For someone without lots of money, BCH`s low price may look like a great deal for Bitcoin. If you have some concerns about the worth of Bitcoin after all forks, you need to be ready for a drop. The distinction is that not all of these suffer the chain split. The primary problem is Bitcoin imposes a hard limit on the magnitude of a block, the location where transaction information becomes stored. The end result is many straightforward wallets, called SPV wallets and very commonly found on your phone, will be quite confused about which chain is Bitcoin. In Bitcoin, the most important reason is known as the network effect.