Hi guys,
It's Mark.
So the biggest transfer of wealth in history
is about to happen.
Thousands of millennials and Gen Cs
are set to become crypto millionaires.
And if you understand the mistakes to avoid,
then you have a much better chance of being one of them.
Now, I understand that's a big statement to make,
but let me explain.
We've seen many wealth transfers like this before,
each one more significant than the last.
First, it was the discovery of gold,
then the real estate craze caused by colonization,
followed by the industrial revolution
and the stock market boom.
I remember them all like it was yesterday!
But seriously, the next transfer of wealth
is about to happen,
and it will be the digitization of our currencies,
otherwise known as cryptocurrencies.
But this doesn't mean
that everyone will end up becoming millionaires,
as there are many mistakes that could cause people
to lose everything.
So today, let's discuss 7.5
of the most dangerous cryptocurrency investing mistakes
to make and how you can avoid them
so that you can make the most from this amazing opportunity.
If you're excited about the possibilities,
then smash that like button for the AlTubeUgorithm,
because it helps push this video to more people
that need to hear about these mistakes
before it's too late.
Mistake number one is believing false promises.
Here's a little warning for you.
Wherever there is significant money to be made,
there are people trying to scam you.
You may think only gullible people fall for crypto scams,
so let's play a little game and see if you're right.
Can you tell which one of these headlines I've made up
and which one is real?
Shiba Inu trader made $15 million in a year
from just $17 in crypto boom.
Or, 12-year-old boy makes £290,000 from whale NFTs.
Believe it or not, they're both real.
So my point is,
if both of these headlines can actually be true,
then imagine how hard it is
for the everyday person to avoid the scams.
Cryptocurrencies are still such a new thing,
and while the industry is growing at a rapid rate,
there's still a huge amount of people
that aren't very familiar with crypto.
And, unfortunately, those are the people that will get hurt.
This is because when large returns aren't uncommon,
it becomes extremely hard to tell the difference
between real opportunities and fake ones.
It's become very well known that Bitcoin
is the best performing asset of the last decade.
However, that doesn't mean every crypto
is a smart investment.
Actually, some are far from it.
Because crypto is such a new thing,
it means the market isn't regulated,
like with stocks and shares.
This means that anyone can actually create a crypto coin,
get people to invest by claiming it's the next big thing,
only to sell all their coins
and run off with millions of dollars.
This is commonly referred to as a rug pull.
A YouTuber called Biaheza recently proved this
by creating a crypto named Fluffy Coin.
He showcases how simple it is to make a meme coin
and use social media to pump up the price into the millions.
Now, luckily, Biaheza was only doing this as an example
and didn't sell any of his coins,
but it does show how easy it is
for scammers to get ahold of your money.
That's not to say you can't make some cash invested
in pump-and-dumps,
but if you take Fluffy Coin as an example,
if you didn't sell on December the third,
you would have probably lost most of your money.
- But Mark, if these scams are so hard to spot,
how can I avoid them?
- Well, there are a few simple things you can do
to avoid the majority of rug pulls.
Firstly, make sure to check the coin's social media.
It's really easy for these scammers to buy fake followers,
to make the coin look more popular than it is.
A great way to check if they're real
is to use a website called Social Blade.
If the follower number spikes randomly,
then it's pretty obvious
that there's something fishy going on.
Secondly, every crypto project
has something called a white paper.
This is where the coin creators outline their mission
for the project.
After reading a few of these,
you can usually tell pretty quickly
if the project is legitimate or not.
Thirdly, if you're not sure about crypto investing,
then just stick to Bitcoin and Ethereum,
as these are now commonly referred to as blue chip coins,
meaning they're a much safer bet.
Mistake number two is investing more
than you can afford to lose.
Crypto's upside potential is absolutely huge,
and therefore the temptation
to YOLO as much of your money in as possible
can be very strong.
I mean, all you have to do is a simple Google search
to find hundreds of people that have made millions
and change their entire lives
by taking big risks investing in crypto,
so it's no surprise at all that people are investing
a lot more than they can afford to lose,
with the hopes that it will transform their lives
and they will become the next success story reported online.
What people don't consider, though,
is all the stories of the people who lost their money,
their house, literally everything, from crypto trading.
It's extremely volatile
and definitely not for the faint-hearted.
I always try and remember, for every success story,
there are countless numbers of forgotten people
that haven't been so lucky.
However, there is a fine line
between buying more than you can afford to lose
and buying nothing at all,
because if you're not investing,
you're most likely losing out on potential gains.
I believe it's all about finding a healthy balance,
especially if you're investing in riskier projects.
Typically, the higher the risk, the higher the reward,
so you don't actually need to part every last penny you have
into a random coin to get your one-way ticket to the moon.
If I invest in alt coins then I buy small amounts,
as I know that if the project goes to the moon,
then I'll make a nice profit,
but if it goes to zero,
then I won't be too worried.
It's all about finding that sweet spot
between risk and reward.
Mistake number three is buying high and selling low.
This may sound extremely obvious and simple,
but so many people are unknowingly making this mistake
and losing an absolute fortune in the process.
It's very common in the crypto world
to see huge bull runs driving the price
of a crypto far higher
than the average yearly stock market returns
in just a single day.
And while that's amazing,
imagine FOMOing into a coin when it's right at the top,
only for it to drop the next day
and you have no choice but to sell,
as you need money for your rent or groceries.
The way I avoid this mistake
is by following the same formula
that I've used my entire investing life,
and let me tell you,
I've made a lot of money doing it.
And that's quite simply,
buying, holding long-term,
and then buying more when the price dips.
This is known as dollar cost averaging.
Essentially, I'll buy Bitcoin and Ethereum
no matter what the market is doing.
Sometimes I'll get a good bargain
and other times it will be expensive.
However, the idea is that it will average out
to a pretty good deal.
Because you know me,
(cash register ringing) I love a good deal.
I also never invest money
I know that I might need in the next five years,
as that's just a recipe for disaster,
especially in a volatile crypto world.
By the way, Coinbase are currently giving away $10 worth
of free Bitcoin,
so if you want to pick that up,
I'll leave the link in the description below.
Mistake number four is being fooled by cheap prices.
When I tell people I invest in Bitcoin,
one of the most common things they say to me
is that it's too expensive for them.
One person even laughed at me
and said that one coin costs more than their yearly wage.
This is probably why many people prefer to invest
in cheaper coins like DOGE.
You're probably wondering why I keep doing this.
It's because on the surface they might look cheaper.
However, when you start digging into the details,
it starts to fall apart.
I'm talking about taking market cap
and total supply into consideration.
Let's compare Bitcoin and Dogecoin, for example.
Bitcoin currently has a market cap of nearly $900 billion
and a total supply of nearly 19 million Bitcoins,
whereas DOGE has a market cap of just over $23 billion
and a total supply of just over 132 billion coins.
So as you can see,
Dogecoin is worth far, far less than Bitcoin,
but has far, far more coins.
That's why the price is lower.
So just because a coin appears cheap,
it doesn't necessarily mean
it's going to be a good investment.
DOGE will never be the same price as Bitcoin,
due to the extremely large total supply,
which is being increased by 5 billion every year,
whereas Bitcoin is capped at 21 million coins.
It's also important to remember
that you can buy fractions of a coin
and still benefit from their growth,
so the price of one Bitcoin is irrelevant
at the end of the day.
The best solution to this mistake
is not to buy coins based on their surface cost.
It's so important to take into account
the total supply as well as the market cap,
in order to get a realistic gauge of the price
and where it could be heading.
Mistake number five is investing only in crypto.
Although I believe crypto is a huge opportunity,
just imagine we wake up tomorrow
and the market has hit rock bottom.
If you had only invested in crypto,
then you would probably be losing your mind.
Even though I'm pretty sure something like this
is highly unlikely, especially with Bitcoin and Ethereum,
I would still never invest in just one asset class.
The easiest additional investments to consider
are Index Funds and individual stocks,
but for some people,
real estate could be an option.
For others, like my son,
you might choose an alternative investment,
such as a Rolex.
I have to say I'm also partial
to the old classic car investment myself.
Broom, broom!
The goal here is to decrease your risk.
Cryptocurrencies are known to be a volatile asset class,
so diversifying your portfolio may allow you to make money
if crypto is heading into a correction.
If you want to kickstart your stock portfolio,
then public.com are currently giving away
a free stock worth all the way up to a thousand dollars
when you sign up and invest just $1 on the platform.
I'll leave the link in the description below,
if you wanna check that out.
Mistake number six is using leverage.
If you aren't careful,
then you can actually lose far more than you invest
by doing this.
Just imagine only investing a thousand dollars
of your own money,
but waking up and being $7,000 in debt.
Well, that's what you call a bad morning.
This kind of situation happens when you use leverage
without fully understanding the consequences.
Many crypto brokers allow you to trade on margin,
which simply means you're able to multiply your money.
Some people are doing this by a hundred X with Bitcoin.
When you do this,
you maximize your profits as you're investing more,
but you'll also increase your risk,
as if the investment doesn't go well,
then you may be margin called
and forced to sell all your crypto at a loss.
Although using leverage is really tempting,
I always stay away from it personally.
I know a lot of people would disagree with me here.
However, I'm a long-term investor,
and can't be sure what the price of some cryptos will be
in the next day.
Therefore, I'm more interested in the next 10 years.
That's of course, if I'm around that long.
Because of this,
I don't feel like using margin is a smart move,
even though I could afford to pay things back
if it all went south.
If you still decide you want to use leverage,
then I would just suggest making sure
you fully understand the risk involved before you dive in.
Mistake number seven is not storing your coins correctly.
Since 2011, over $1.65 billion worth of crypto
has been stolen,
and the numbers are growing every year.
That amounts to a jaw-dropping $12.6 billion loss
when values are adjusted for inflation.
The nature of crypto makes it extremely vulnerable
to hackers, and if you don't store it in a safe place,
once your coins are stolen, there is no way to recover them.
You see the stories all the time
of people trying to find their lost Bitcoin.
it's just not gonna happen.
Not your keys, not your crypto.
Most people will buy their crypto
on an exchange like Coinbase, and keep it there.
And that's the issue.
It's been said that it's much more profitable
to hack a crypto exchange than a bank vault these days.
Therefore, it's understandable why exchanges
are often targeted by highly complex cyber attacks.
Exchanges lose a staggering daily average of $2.7 million,
and this figure is set to increase in the future.
- Mark, this sounds so scary.
I don't know what to do to fight a cyber attack!
- Well, you need your own wallet,
and there are two different types.
The first is called a hot wallet.
These are connected to the internet
and could be susceptible to online attacks,
which could lead to stolen funds,
but it does have benefits,
such as being faster and making it easier
to trade or spend crypto.
The second is a cold wallet,
which is how I currently store the majority of my crypto.
This is typically not connected to the internet,
so while it may be more secure, it's less convenient.
I personally use the Ledger Nano X.
I also keep some of my crypto in BlockFi,
as I find it's a good compromise between the two,
as they keep the majority of their funds
in Gemini's cold storage.
And by putting your crypto in BlockFi,
you can earn up to 9% interest.
I'll leave a link down below
where you can get up to $250 of free Bitcoin
when you sign up.
Bonus mistake number 7.5 is sending your money
to the wrong wallet.
Sending crypto between your wallets
is a pretty scary process.
I once sent over a hundred thousand dollars' worth
of Bitcoin and I thought I'd made a mistake
when typing out the wallet address.
The old eyes aren't as good these days.
All it takes is for one character to be typed wrong
and that hundred K would have been lost forever.
Luckily, 10 stressful minutes later,
my Bitcoin arrived in my other wallet, nice and safely.
To avoid this ever happening again,
I now always transfer a small amount of crypto first,
to check the characters are correct,
and copy and paste the address,
or use the QR code option to avoid human error.
Cryptocurrency is quickly becoming adopted by people,
corporations, and now even countries,
with El Salvador leading the way.
We have little choice but to embrace it,
or become extinct, like the dinosaurs.
I truly believe that this is an extremely exciting time
to be alive,
as by avoiding these common mistakes,
you'll be able to take advantage
of the next big wealth transfer.
So if you're living in this day and age,
you'll never be able to say you didn't have the chance
to become wealthy.
Just imagine explaining to your kids
how you knew about crypto and didn't take action,
or rushed in and made silly mistakes.
I'm gonna leave the next video right up there,
but don't click on it just yet.
Make sure to subscribe if you wanna grow your wealth,
and don't forget to pick up your free stocks
and Bitcoin with the links below.
Okay, I'll see you over there.