Hi everyone I’m Jarod and I’m going to be walking you through 5 mistakes people make
when buying crypto currency!
So lets go…
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So it’s been a while hasn’t it?
I haven’t made a longer video in a while!
I’ve mainly been doing shorts.
I missed this and wanted to talk to you guys a little bit more in-depth about crypto.
Crytocurrency is a highly rewarding but extremely volatile currency.
You have to be careful when investing in crypto especially here in SA.
Crypto has not been regulated in south Africa, it’s perfectly legal to buy and sell but
there aren’t any rules or protections regarding it.
So I’m going to walk you through a few things to avoid when investing in crypto.
Now this is not financial advice, these are just some really helpful tips, if you want
further information ask your financial advisor or email me.
Tip 1: Ignoring the taxation Crypto is taxed in South Africa.
However, whatever wallet you use to purchase crypto, Like Luno, keeps your information
safe and they do not report this to SARS.
This means you have to declare it yourself to SARS, which I suggest you do.
You don’t want to be in a situation where you’ve bought and sold crypto and made a
tidy profit and you’re not aware you need to pay tax on that earning.
Short term profits when selling Crypto is counted as income.
This means its added to your current annual earnings in your job or business and it will
be taxed!
Longer-term gains from Crypto will also be treated as capital gains tax, which attracts
a hefty taxation rate!
The reason behind this is crypto is not considered a currency in SA but rather a capital asset.
Moving on to Tip 2: Trying to time the Market This is something a lot of people do and it
seems easy.
Just buy when it’s low and sell where its high right?
It’s unfortunately not that simple, that is a recipe for disaster.
The time in the market is more important.
What this basically means is, set yourself a 3-5 year growth target, don’t try and
turn over quick trades.
Spend time in the market and you will most times end up in a positive.
I personally had this happen to me with Bitcoin.
I bought in 2017 where crypto was doing really well, which was a mistake in itself, only
to lose almost 70% of my fund value in 6 months.
If I had pulled out of the market it would have been disastrous.
I left my money in and within a year it was almost 4 times the value.
Investing in crypto should be treated like investing in stocks or investments, pick a
long term plan and move forward with that.
Mistake 3: Investing too much Cryptocurrency has some unbelievable returns…its
also had some incredible losses.
In the last 5 years 90% of the gains in bitcoin have come only 5% of the trading days.
To put that into perspective for you in the last one thousand eight hundred and twenty
five days crypto has only gained on 91 and a quarter days.
That is a scary statistic, if you had all your money in an investment that did that,
you would be having nightmares daily.
Now I’m not saying you shouldn’t invest in Crypto, I myself have monies invested into
Crypto.
But the amount that is invested should not be at more than 10% of your of your total
portfolio’s worth.
I have heard and witnessed many people losing almost their entire savings by going all in
on Crypto.
What you invest in Crypto you should view as money you are comfortable with not ever
getting back.
If you’re thinking about your crypto portfolio every day, chances are you’re overinvested!
Mistake 4: Trying to find the new Bitcoin So a lot of people have realised that the
most amount of money to be made in Crypto is right at the start when it is at its lowest
value.
This is when those astronomical returns are made.
A lot of people invest in far too many coins, as of the 25th March 2022 there were eighteen
thousand fout hundred and sixty five cryptocurrencies with over one thousand five hundred listed
on coinmarketcap dot com.
Don’t try and find the next big coin based on some tip.
Stick to what people call the “blue chip”coins.
These are the coins with the biggest caps for example Ethereum, Bitcoin, XRP, there’s
many lists with the top 10 coins and currencies.
Stick to a solid mix of these, on Revix.com it was said that widely held coins with a
large market share are less likely to be manipulated than smaller batches of currencies and coins.
So with these mistakes mind, take this into consideration when you purchase crypto, make
that you have a safe wallet to keep your funds secure that has two factor authorisation at
a minimum.
I personally use Luno Wallet and if you sign up on Luno with my code in the description
you get R25 in Bitcoin.
So go check that out if you want.
As always thanks so much for watching and I hope that this video helped you out in some
way and added value to your life.
Share this with as many people as you like if you feel it can help them and consider
subscribing if you want to see more videos like this.
See you guys next time, and that’s me!
Peace!