It’s probably not as complicated as you think…

If you’re living in Dubai and don’t currently own crypto, you probably fall into one of three groups. You’re either one of those old school – “I don’t trust money I can’t see” stalworts, choosing to invest all your faith in reems of coloured paper or digits on an ATM, because they are “a far more sensible sounding measure of objective wealth”. You might be in the “I understand it, but I’m skeptical” camp. You’ve watched the bull runs, bubble bursts, and the NFT rollercoaster and you’re just not sure if it’s something you want to hitch your financial wagon to. Or you might be itching to dip your toe into the rippling crypto waters but you don’t understand it, or are worried it’s too late.

Wherever you sit on the sideline spectrum, we can probably all still agree that it makes sense to diversify your portfolio. Spread your bets, mitigate the risk, work a side hustle. And you probably have questions. That’s good. The best decisions are informed decisions. So to help dispell some of the misconceptions, demystify the jargon and explain how the crypto market works in basic, accessible terms, we spoke to an expert. Here, Zeid Bataineh, the Content Marketing Director of CoinMENA, shares his considerable wisdom on how you can make the safe first steps to getting some skin in the game.

If someone has no experience in buying/selling crypto, what is the first step towards creating a portfolio?

Step 1: Buy Bitcoin, seriously. It’s been growing at an average rate of 150 per cent since 2011 and has been the best-performing asset class in the world in 10 of the last 13 years.

Step 2: After you get yourself some bitcoin, start learning more about crypto. I would classify them into three buckets: 1) Bitcoin, 2) Stablecoins, and 3) Alt-Coins.

  1. Bitcoin is the OG crypto. It’s the only one that’s a system of rules without rulers. It’s the most decentralised, its policy is hard-coded, no one can change it, and it has an immaculate conception story. An anonymous founder who called himself or herself Satoshi Nakamoto created this thing, released it into the wild, and when it got traction, vanished. Because for something like this to succeed, there cannot be a figure to go after (side note, this will make a great movie one day). Multiple governments tried to kill bitcoin—China, the U.S., etc.—but they failed, and now they are buying billions of dollars of it. So Bitcoin is here to stay. Its main property is its scarcity; there will only be 21 million bitcoin, 19.4 million of which have already been mined. The rest will be mined at a decreasing rate until the year 2140. Juxtapose that against the ever-increasing amount of fiat money (ED: that’s conventional currency to the uninitiated, dollars or dirhams for example) being created by central banks all over the world, and you end up with scarce assets going up in value and cash losing its purchasing power over time as the currency is debased.

  1. Stablecoins are just that, stable. Their value is pegged to a currency. The most common ones are US Dollar stablecoins like USDT and USDC. So 1 USDT always equals 1 USD. You get all the benefits of crypto without the value fluctuations. Stablecoins are actually the most common use case for crypto thus far; over 90 per cent of all on-chain transactions are in stablecoins. Essentially, in a world where many currencies are failing due to excessive money printing, many are fleeing for the relative safety of the U.S. dollar. The easiest way to get U.S. dollars is to buy some stablecoins. Then you can send them anywhere in the world as easily as sending a WhatsApp message (with a small fee). Compare that to the archaic process of sending international wire transfers that take days to clear and involve a lot of fees. That’s why stablecoin adoption is skyrocketing, particularly among businesses. It’s just a more efficient way to move value across borders.

  2. Alt-Coins: Altcoins should be treated as if you’re investing in a tech start-up. Each one is different; you have a founding team working on it, so with altcoins, you really need to do your homework before investing in any project. A lot of them are outright memes and have no product roadmap, but people are just buying them as a speculative investment. These are risky investments, so I would do my homework and invest responsibly based on my risk appetite.

For more information, check out our free web learning platform coinmena.com/university which contains over 100 articles and videos explaining bitcoin, crypto, and financial literacy.

When is the best time to start dipping your toes into the market? Are we due a Bull Run soon? What does that mean and is it worth hanging on for?

I would argue Bitcoin has been in a 14-year bull run, growing at an average pace of 150 per cent per year! The most effective way to invest in Bitcoin is a strategy called DCA, or Dollar Cost Averaging, where you buy a small amount at regular intervals. This allows you to capture the dips and not miss out on the upside. This has proved to be quite a successful way to accumulate bitcoin. It’s what I’ve been doing: I allocate 10 per cent of my monthly salary to Bitcoin, as if it’s my savings account. I have been doing it for seven years and my portfolio has outperformed every person I know.

Can you make ‘the big bucks’ without hours of daily research?

Yes, DCA into bitcoin. There’s a great quote by one of the best macroeconomists and bitcoin writers, Lyn Alden, when she says: “Very few people build wealth by trying to catch every twist and turn of the market. Focus on long-term trends.” The long-term trend shows that all fiat currencies are losing purchasing power over time due to excessive printing. Bitcoin, being scarce, will continue to increase in value.

Is there any danger in trading online, if so – what are the common traps and how can people avoid them?

The most important thing is to use a licensed and regulated platform to trade/invest. All investment carries risk and crypto is an international asset class, so it’s difficult to regulate across multiple jurisdictions. That’s why it’s very important to trade with a regulated and licensed broker like CoinMENA. We are licensed here in the UAE by Dubai’s Virtual Asset Regulatory Authority, which means you can connect your bank account directly to your CoinMENA wallet and deposit or withdraw money directly to your bank account anytime. You can buy crypto with AED directly, which is not possible when using international exchanges.

What’s the best low-risk trading strategy for newbies?

DCA into bitcoin. Thank me later. Or buy me a drink next time you see me.

What’s the most common mistake you see people making in crypto?

Thinking they are smarter than trading algorithms. Trading is hard, and it’s 24/7/365. If you’re not a full-time trader with your own algorithms and charts, you’re highly unlikely to “beat the market.” Just buy a little bit of Bitcoin on a monthly basis, dabble responsibly in some altcoins after you do your research, and if you are a business or individual frustrated with costly international money transfers that take days to process through banks, check out stablecoins.

Without getting too specific, are there any coins at the moment you think people should keep their eye-on?

At the risk of repeating myself again… but it’s Bitcoin.

Can you share with us three people/accounts worth following for those new to crypto?

@LynAldenContact

@TheGuySwann

@CoinMENA

At CoinMENA we try to keep posting educational content, so this shameless plug is relevant here. Our educational content, both English and Arabic, is second to none in the region

Some people were put off dealing in Crypto after some of the big NFT collections crashed, but they haven’t gone away, are they set to come back in a different form?

Every cycle, new hype projects come and go. NFTs were one such hype project that came and went. Some brands are starting to do innovative things, like “twinning” them with real-life merchandise. For example, you get an NFT with your new Air Jordans that gives you special access to some events and things like that. I could see something like that lasting, but the days of monkey pictures being worth millions are over. At least, I hope so for humanity’s sake. That was ridiculous.

Disclaimer: This is not financial advice. All investments carry risk. The views expressed by Zeid are his own and do not represent the views of his employer, CoinMENA.

Images: Unsplash