Trade Crypto
Learn How to Trade Crypto and Buy Bitcoin.
Arbitrage Andy has been involved in crypto markets since 2017. A large focus of his crypto newsletter Arb Letter is to educate and teach people how to get involved in the space and make money. This new asset class is taking the world by storm, growing dramatically in 2024 with the approval of Bitcoin ETFs by large institutions and financial firms globally.
It dawned on me this weekend that we are still early in the crypto cycle and in term’s of overall adoption globally.
With that being said — while I have provided nuggets of how to’s and updates over the years on crypto I don’t have one singular guide to the sector for newbies and less experienced folks to read to get up to speed so today that’s exactly what I am going to do.
Today’s post is a complete comprehensive guide to crypto within the posting limits of Substack. Everything you need to know — from the basics of the market, to how to buy, to wallet and cold storage management, and beyond will be covered in today’s guide. While it is meant for folks who are new to the space — there will be some nuggets relevant to experienced and veteran crypto folks as well.
If you are brand new to to Arb Letter — I suggest reading through this post BEFORE reading any of the other crypto related ones — as those assume readers have a semi up to date knowledge of what’s going on in the space. THIS post should be read AFTER this one.
I initially got into crypto at the end of 2016 when I was in my first role trading commodities in NYC. A senior trader mentioned Bitcoin and Ethereum to me in passing and it didn’t take long before the whole floor was fascinated with this new fast moving market.
At the time it was purely speculative — I hadn’t done much research on use cases or purposes of these new assets but I knew I liked the fact that Bitcoin was limited in supply, was immutable, and posed an interesting hedge against fiat currency. It wasn’t until I had endured several aggressive bear markets that I began to truly accumulate some good size in mainly BTC and ETH.
Over time — my entries looked better and better as the crypto sector flourished in bull runs, popping off with the run during Covid amid insane money printing by the US government.
Crypto represents much more than a speculative tool to many — it represents freedom and transparency in a world when central banks and federal governments have demonstrated that they do not have the best interest of citizens in mind. How could they when the US is adding trillions of debt every few months?
Domestic bank failures have dominated headlines over the last several years and people certainly have the lowest amount of trust in institutions in quite awhile — much of this is due to Covid lockdowns — but recent events like insider trading by politicians, questionable central bank policy, and a creeping wealth gap in the West are waking people up to the reality we all live in.
On a long enough time line the options to “make it” are narrowing. This is evident in the cost of basic goods, the real estate sector, and the value of the dollar compared to the 1980’s or 1990’s.
Today’s guide will help answer the following:
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When to buy and what to buy this bull run
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How to outperform 90% of traders and investors
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How to secure and protect your digital assets
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The best resources to follow this bull market
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Best tips and tricks to maximize returns
Investing in Bitcoin, Ethereum, and other crypto amid rising institutional interest in recent months offers significant upside potential. These cryptocurrencies represent a new asset class that operates independently of traditional financial markets, providing a hedge against inflation and economic uncertainties.
Unlike gold or equities, which are influenced by geopolitical events and market fluctuations, Bitcoin and Ethereum have limited supply, making them potentially more resilient to inflationary pressures. Additionally, their decentralized nature and technological innovation suggest long-term growth prospects, making them attractive options for investors looking to diversify their portfolios and generate wealth in alternative markets.
If you’re new to crypto or looking to gut check your strategy — check this guide out and then proceed to read my other crypto centric updates.
Let’s get started.
No time to waste.
To kick today off I want to do a refresher on jargon and vocabulary you should be up to speed on before diving into crypto.
I will never give you explicit advice on exactly to what to buy and when — that’s a lose lose generally and it’s gimicky. I will outline how I position myself and what my general strategy is and you’re welcome to follow the same strategies or adjust them for yourself. It’s critical to do your own research and figure out what you’re comfortable with from a risk perspective.
I am not in crypto for “fast money” I have been involved in the space since 2016/2017 and have DCAd (dollar Cost Averaged) for years now — buying regularly.
Half of the time being up to sped on terminology, sentiment, and trends in crypto is the key to catching onto what’s next or about to pump.
Below are a handful of guidelines and rules I do reccomend officially if you dabble in the crypto space.
Several Ground Rules For Crypto To Live By:
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For long term positions don’t buy all at once — DCA over time to ensure you average out the price you are getting. When the market dumps hard and you feel sick to your stomach it’s the best time to buy. Don’t FOMO into ATHs with large percentages of your investable capital
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ALWAYS keep the % of crypto you want most secure in cold storage — popular options are Ledger, Trezor, Ellipal Titan 2.0, Cool Wallet Pro.
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Understand that no crypto exchange is 100% safe — crypto is pioneer technology, there is always a chance of black swan events that we saw like Genesis, FTX, Celsius, and more. If this inherent risk keeps you up at night you should probably avoid the space. Crypto is inherently risky. If you follow proper protocols, don’t share you r keys, and use cold storage you will take all possible precautions to keep your assets safe. No risk no reward. Gemini is my preferred exchange to hold my trading balances and the portion of my percentage I would sell quickly if the need arose
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For long term investors — a Bitcoin/Ethereum heavy portfolio is likely the best strategy. I hav roughly 60% in these two assets with the rest on alt coins I like and a handful of percentage points allocated to all out degenerate risk plays like $PEPE and other meme coins.
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The emotional aspects of trading are even more important to keep in mind when you are in crypto. In bull markets and big runs a sort of mania will develop — everyone will be talking about new all time highs, shitcoins that are making people multi millionaires, and it will seem impossible to lose money. This is generally the time to take profits, if you choose to do so. There’s a saying in crypto — when you’re tempted to screenshot your portfolio and share it with someone it’s time to sell. When people think crypto is over forever and all hope seems lost it’s time to buy. Buy when you least feel like it, and sell when you think it’s going so much higher.
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I do not reccomend day trading or active management if you are in crypto. The truth is only about 1% of traders are good enough to consistently generate profit in crypto — unless you come from an options or derivatives trading background, you’re likely to lose money trading all the time, not to mention it complicates taxes. I’ve held the majority of my Bitcoin and Ethereum for 7 years now.
In no particular order here are some of the best crypto names I suggest researching for the next 2 years:
Bitcoin, Ethereum, Avalanche, Chainlink, Uniswap, AAVE, Polygon, Solana, Filecoin, The Graph, Decentraland, Sandbox, PEPE, FET, Injective, PolkaDot, Cardano, STX, Sushi, Ripple, BEAM, Monero — add in SHIBA/DOGE/FLOKI/WIF for max degeneracy.
Should be enough to chew on for now.
Hell there is even a new coin for ZYN gaining momentum in social media and crypto circles — you can check out how to buy it here.
Allocate carefully — build your portfolio base with quality and then you can spend 5% or whatever portion you want trying to strike it rich on meme coins and riskier plays.
The Basics
Below are some terms and concepts you should be aware of if you are going to get involved in crypto or if you find yourself confused by some of the jargon used — crypto is an entirely new asset class and with it comes new dynamics, vocabulary, and slang you should be up to speed on if you are researching and participating in the space.
Crypto
Cryptocurrency, or crypto as it is referred to often, is a digital payment platform that eliminates the need to carry physical money. Generally people in crypto differentiate Bitcoin against “crypto”. Unlike traditional fiat currencies issued by governments, cryptocurrencies are decentralized and operate on a technology called blockchain (Crypto.com).
Blockchains
A Blockchain is a transparent and distributed ledger that records various transactions across a digital network, ensuring there is transparency and security, and eliminating the need for intermediaries like banks or investment firms.
Smart Contract
Smart contracts are digital contracts stored on a blockchain that are automatically executed when predetermined terms and conditions are met (IBM).
Tradfi
Short for traditional finance — it should be noted that despite recent institutional interest in the space, there are ardent critics and skeptics within the Tradfi world — namely on Wall Street. This is to be expected as many of the implications surrounding crypto are linked to replacing existing tradfi infrastructure and mechanisms to make them more transparent and optimized.
Bitcoin
So to start — if you’re looking to get into crypto, Bitcoin is an incredibly important asset to understand, as it’s the most dominant and talked about, and — in some people’s opinions, the most likely to gain widespread adoption/use globally. Launched in 2009, bitcoin is the world's largest cryptocurrency by market capitalization.
Ethereum
Ethereum is a network of computers all over the world that follow a set of rules called the Ethereum protocol. The Ethereum network acts as the foundation for communities, applications, organizations and digital assets that anyone can build and use (Ethereum.org). If one compares Bitcoin to digital gold — Ethereum is the new internet.
ERC-20
Used on the Ethereum network, ERC-20 is the most vastly used crypto-token standard. It allows developers to easily create digital currencies, which are immediately compatible with existing infrastructure.
Degen
Short for degenerate — implying a play or trade is degenerate or void of logic or proper risk management.
YOLO
You only live once — usually used to describe an aggressive or highly risky trade or investment
DEX
A decentralized exchange — a decentralized exchange (or DEX) is a peer-to-peer marketplace where transactions occur directly between crypto traders. DEXs fulfill one of crypto's core possibilities: fostering financial transactions that aren't officiated by banks, brokers, or any other intermediary (Coinbase).
Staking
The reason your crypto earns rewards while staked is because the blockchain puts it to work. Cryptocurrencies that allow staking use a “consensus mechanism” called Proof of Stake, which is the way they ensure that all transactions are verified and secured without a bank or payment processor in the middle. Your crypto, if you choose to stake it, becomes part of that process (Coinbase). Staking generally earns you yield or rewards on the given blockchain. Risks of staking include vesting or lock up schedules — meaning you cannot redeem your crypto for a set amount of time.
Airdrop
A cryptocurrency airdrop is a marketing strategy that involves sending coins or tokens to wallet addresses. Small amounts of the new virtual currency are sent to the wallets of active members of the blockchain community for free or in return for a small service, such as retweeting a post sent by the company issuing the currency. The ultimate goal of a crypto airdrop is to promote awareness and circulation of a new token or coin (Investopedia).
Bridging (Bridge)
A blockchain bridge can connect a permissioned chain to a public chain. Bridging can also facilitate the exchange of assets between different blockchains. For example — I recently talked about the Blast airdrop. To participate you needed to bridge Ethereum to Blast.
Layer 1
A Layer 1 (L1) blockchain is a base blockchain on which secondary blockchain networks and applications are sometimes built. Bitcoin and Ethereum are the two biggest L1 blockchains in the world (Techopedia).
Layer 2
Layer 2 (L2) is a network or channel that sits on top of a Layer 1 (L1) network like Bitcoin or Ethereum. L2's are designed to enhance the speed and reduce the cost of performing transactions on a blockchain (Coinbase). An example of a Layer 2 is Polygon (MATIC) which
Rug/Rug Pull
A rug is short for a rug pull. In crypto there will be many new tokens and assets that pump only to dump hard and never recover — or worse — the project is a ponzi scheme. Founders launch it, let retail bid it up, then pull the “rug” out from underneath people which can include everything from rapid selling to stealing tokens all together. To avoid rugs — do your own research and invest responsibly.
FUD
FUD is short for fear, uncertainty, and doubt. In crypto you will here people using this term a lot when bad news — be it macro related or industry related drops. “Don’t FUD your bags” or “Irrelevant FUD”. Generally when people bring FUD up it’s seen as an attempt to shake out holders from an existing position.
dApp
dApps, or decentralized applications, are programs that run on top of blockchain networks and use smart contracts to provide trustless tools and services for end users. The most widely adopted smart contract platform today is the Ethereum protocol, where hundreds of dApps exist today (Brex).
DeFi
DeFi, or Decentralized Finance, refers to the growing ecosystem of applications and services that leverage blockchain tech and cryptocurrencies to provide decentralized financial services to end users. Typically deployed to the Ethereum network, hundreds of DeFi applications exist today that allow users to borrow, lend, and earn interest on cryptocurrencies. DeFi applications are made up of a collection of smart contracts that define the exact process and flow of user funds, DeFi applications allow users. (Brex)
Investing vs. Trading & How to Buy
Bearing in mind some of the rules I laid out earlier — you should ask yourself what your goal is with crypto.
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Are you in crypto for fast wealth? If so understand your risk will be higher as the projects and assets that have the highest probability of pumping in a short amount of time also frequently have the highest chances of rugging, being highly volatile, or having low liquidity once profit is taken
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Are you a long term investor? If you truly understand the value prop of crypto and align with my thoughts in the intro, don’t get bothered by the noise or short term price fluctuations. Invest over time, consistently, and work to build up a portfolio that you plan on holding for many years to come. If you understand the math behind Bitcoin this should be exciting to you.
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Are you willing to wait — potentially years — to see significant upside in the space as adoption grows and cycles play out
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Are you equipped to wait out insane volatility and market moves to achieve your goals in crypto. Crypto is inherently hyper volatile — over time this should change with institutional capital inflows — though it should be noted as supply changes hands and derivatives use grows this could generate moves many consider as fake outs or manipulation. The current ETF narrative and involvement of tradfi institutions in crypto is a hot topic for true crypto believers, many of which believe this defeats the entire point of the space.
To buy crypto you simply convert fiat (usually USD) into crypto buy buying on a number of exchanges.
Some of the crypto exchanges that are popular are listed below. Please note — depending on where you live some of these may or may not be available. Additionally - understand that high volatility impacts the ability for exchanges to operate. This is why I have a long term focused view — I am not concerned with panic buying or selling — I hold the majority of my assets in cold storage and my trading or emergency balance on Gemini.
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Coinbase - Solid
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Gemini - Use my invite code HERE to sign up (super easy)
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Kraken - Solid
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Binance - Solid but tarnished a bit with events over the last 2 years
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Robinhood - Solid but again — you don’t truly own your crypto
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Bitstamp - I have no experience with Bitstamp
Outside the US you may have more access to leverage trading or trader oriented exchanges. While I won’t openly endorse it, if you are determined to do this you can use a VPN to get around this dynamic.
Understand there will be more black swan events and exchange issues — if you are extremely risk averse crypto may not be for you.
There is systematic risk in any new technology — crypto is not the exception.
Storage/Wallets/Exchange Basics
One of the most attractive features of crypto and Bitcoin specifically is that YOU can be your own bank or intermediary. If you’ve done some high level research in crypto you’ve probably heard the phrase “not your keys not your coins”. This refers to your private keys for whatever wallet you are utilizing in crypto.
When you store bitcoin and other assets on exchanges, technically you do not own your keys — the exchange does. I don’t need to remind you about the inherent risk that comes from keeping large amounts of assets on exchanges — we saw many people get screwed with the FTX blow up, Celsius debacle, BlockFi issues, and more.
If you’re talking to someone and they keep 100% of their assets on exchanges, they probably don’t understand bitcoin or crypto as well as they think they do.
The best way to ensure you own your keys is to keep your Bitcoin and crypto in cold storage. Cold storage is a method of keeping your crypto “offline” in a secure wallet that only you control. With cold storage I can literally put all of my assets on a thumb drive, burn the codes, have them in my head, and theoretically nobody can obtain access to my assets.
Pretty powerful in a world in which banks can shut your access to your funds off if they don’t like your political opinion, like JP Morgan did with Kanye. We could go down the entire rabbit hole of CBDCs (Central Bank Digital Currencies) but we won’t - just know that CBDCs are essentially a government backed digital asset in which third parties can control what you spend, how you spend, and shut off access to your money for any reason at any time.
Again — like exchanges cold storage is not 100% foolproof — but it is the safest way to store crypto. I touched on this a bit earlier but here are the best options for cold storage - bear in mind some of these have had security concerns before, for example Ledger is not seen to be as secure as it once was. Do your own research to select the best option for you:
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Ledger
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Trezor
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Ellipal Titan 2.0
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Cool Wallet Pro
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NGRAVE
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Blockstream JADE
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COLDCARD
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OpenDime
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SafePal S1
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BitBox02
Best Crypto Resources
Substack limits the amount of hyper links that I can insert into any given post — but you can find the best resources in the space listed below that I follow and encourage others to engage with if they are active in the space. Twitter is the best resource to follow updates and sentiment on crypto.
Social Media
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@Pentosh1 (Twitter)
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@cobie (On Twitter and Substack)
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BowTied Bull (On Twitter and Substack)
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DeFi Education (On Twitter and Substack)
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@Tradermayne (Twitter)
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@CryptoGodJohn (Twitter)
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@blknoiz06 (Twitter)
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@Gainzy222 (Twitter)
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@Chainlink (Twitter)
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@SergeyNazarov (Twitter)
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@Saylor (Twitter)
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@EricBalchunas (Twitter)
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@BitcoinNewsCom (Twitter)
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@brian_armstrong (Twitter)
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@icebagz_
Books
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The Bitcoin Standard
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The Book of Satoshi
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Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money
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The Internet of Money
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Blockchain Bubble or Revolution: The Present and Future of Blockchain and Cryptocurrencies
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The Fiat Standard: Debt Slavery Alternative to Human Civilization
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The Cryptopians: Idealism, Greed, Lies, and the Making of the First Big Cryptocurrency Craze
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Ethereum: Blockchains, Digital Assets, Smart Contracts, Decentralized Autonomous Organizations
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Blockchain Basics: A Non-Technical Introduction in 25 Steps
I hope all of you found this guide helpful to get a baseline grasp on crypto and the opportunities it represents in the coming months and years. For us with true conviction this is just the start to a multi year growth period in the space.
As traditional financial institutions and firms get more involved in the space we can expect to see defi grow as well — particularly within the oracle, layer 2, lending, and DEX space. Returns will likely lessen on majors like Bitcoin and Ethereum — the days of buying them super low and printing are likely over — but that doesn’t mean you shouldn’t DCA into them periodically to build the base of your portfolio.
In my mind outsized returns will come from blue chip alt coins. As the adoption and validity of Bitcoin and Ethereum grow in major institutional spaces the next logical suspects for growth will be dapps and protocols that build upon existing use cases and blockchains leveraged by said company. In terms of trading tips — my #1 tip is don’t overtrade. Over rotating your positions is a common pitfall many fall into — you see one project or asset pump, you get FOMO, and then you panic sell and rotate into said asset at the local high only to watch it fall again.
Anchor your portfolio with BTC/ETH, add the alts you want to bet on, and wait. Generally speaking when there are aggressive and violent corrections it is a great time to buy. An easy indicator or guide for when to buy is when you are most uncomfortable. You see your portfolio down significantly and say to yourself “f*ck this” or “I’m out”, the euphoria you felt is long gone — THAT’S when you buy — not when everyone is printing money and laughing because they retired on a meme coin of Elizabeth Warren or Joe Biden.
In short — I am highly optimistic in the coming months and think that, on top of a potential Ethereum ETF (free alpha) many high quality lats will pump as Bitcoin ranges and maybe even taps another all time high.
Speed is essential in crypto — the time to fully front run big players is winding down in BTC/ETH terms, but if you do your research and stay connected to the space you’ll be positioned to benefit from the explosive growth coming in the space.