Beginner Crypto Investing Framework

Summary

• Video teaches a step-by-step approach to start crypto investing using fundamentals, tools, and mindset.
• Covers what crypto is, primary use-case buckets, and why crypto (especially Bitcoin) is an investment opportunity.
• Explains investor psychology, compound interest, key crypto terminology, and technical/fundamental analysis methods.
• Reviews practical tools, exchanges, wallets, bridging, portfolio structure, position sizing, and cycle timing.
• Presents a conservative allocation framework (core + risk-on/casino) and compound-growth planning approach.

Action Items

• (immediate – you) Connect a centralized exchange (e.g., Coinbase) to a bank account for fiat on/off-ramps.
• (immediate – you) Set up a self-custody wallet (MetaMask or Phantom) and securely store the private key/seed phrase offline.
• (immediate – you) Create a CoinTracker account and link wallets/exchanges for tax reporting and tracking.
• (short term – you) Decide monthly contribution and allocate 75% to core (Bitcoin) and 25% to a risk-on portfolio.
• (short term – you) Install TradingView indicators: Bitcoin Power Law Corridor and Bitcoin Cycle Mastery for cycle analysis.
• (short term – you) Add the inevitrade position-size calculator to TradingView or obtain the tool via the instructor.
• (ongoing – you) Use CoinMarketCap, DexTools, and bridges (Albridge) to research tokens and move assets between chains.
• (ongoing – you) Practice position sizing: define one unit of risk, set stop-loss or risk-to-zero, and calculate R multiples.

Crypto Basics And Use Cases

• Crypto: borderless, digital, programmable money outside central entities; transactions use cryptographic hashing and distributed validation.
• Three primary buckets:
  • Store of value: hedges inflation (Bitcoin example).
  • Decentralized finance (DeFi): programmable financial services (Ethereum, Solana examples).
  • Stablecoins: fiat-pegged tokens for dollar-equivalent blockchain interaction (USDT, USDC).
• Real-world applications: cybersecurity, cloud storage, insurance, healthcare, voting, privacy/ID, global payments, tokenization of assets.

Why Crypto Opportunity Exists

• Fiat purchasing power erosion: long-term inflation debasement noted as 45% since 2000; 23.6% lost 2020–2025.
• Bitcoin historical gains contrasted with fiat decline; Bitcoin as provably scarce, portable, programmable, and censorship-resistant.
• Generational adoption shifting from gold to Bitcoin; younger cohorts hold more crypto.
• Total global asset market large (trillions); Bitcoin currently a small slice with high upside potential under adoption scenarios.
• DeFi and tokenization (BlackRock and institutional interest) could unlock large capital inflows.
• Compound annual growth examples show crypto (Bitcoin) can outpace stocks and real estate under certain growth assumptions.

Investor Mindset And Principles

• Contrarian timing: invest when interest/search volume is low; reduce additions or sell when public interest peaks.
• Flip psychological instincts: buy when market sentiment is bad, sell when euphoric.
• Compound interest: reinvesting gains dramatically increases long-term returns; early starts exponentially matter.
• Discipline: plan entries, define risk (stop-loss or risk-to-zero), and specify exit/profit targets before trade.

Key Terminology (Concise)

• Private key: secret seed phrase granting full ownership; never share.
• Public key / wallet address: shareable address to receive crypto.
• Exchange: platform to buy/sell (centralized: Coinbase, Binance; decentralized: Uniswap, DEXs).
• Centralized exchange: holds private keys on your behalf (not your keys, not your crypto).
• Decentralized exchange: peer-to-peer, self-custody required, access to smaller tokens.
• Tokenomics: token design, distribution, unlock schedule, dilution mechanics.
• Market capitalization: circulating supply × unit price; categories: large-cap (> $10B), midcap ($1–10B), smallcap ($100M–1B), microcap (< $100M).
• FDV (Fully Diluted Valuation): current price × total supply; used to estimate dilution risk.
• Wallet: software/hardware storing keys (MetaMask, Phantom, Ledger cold storage).
• Smart contracts: self-executing blockchain code (DeFi building blocks).
• Gas fees: network transaction fees.
• Hodl, FOMO, FUD, whale, rug pull, aping/DGEN: common behavioral and market-risk terms.

Tools, Platforms, And Flow

• Fiat on/off-ramps: use a centralized exchange (Coinbase recommended) to connect bank accounts.
• Self-custody wallets: MetaMask (EVM chains), Phantom (Solana).
• Bridging/Token conversion: Albridge to move assets across chains and convert stablecoins (ERC20 → Solana USDC).
• Decentralized trading flow: find token contract on CoinMarketCap, use DexTools to connect wallet and trade on-chain.
• Position-sizing and leverage trading: Bybit and Blowfin used for leveraged day trades (read T&Cs; leverage increases risk).
• Cold storage: Ledger hardware wallet for long-term holdings (seed phrases offline).
• On-chain analytics: CoinGlass (free alternative to Glassnode) for on-chain metrics.
• Portfolio & tax tracking: CoinTracker for consolidated portfolio view and tax forms, supports tax-loss harvesting.

Fundamental And Technical Analysis Methods

• Fundamental analysis:
  • Evaluate tokenomics, circulating vs total supply, unlock schedules, FDV ratio to assess dilution risk.
  • Use CoinMarketCap whitepapers and tokenomics sections for distribution details.
• Technical analysis:
  • Bitcoin cycle analysis: use Bitcoin Power Law Corridor + Bitcoin Cycle Mastery indicators.
  • Bitcoin follows ~4-year halving cycles; 532 days post-halving statistically aligns with cycle highs.
  • Use logarithmic charting to view long-term trends and relative moves.
  • Elliott Wave + Fibonacci extension: five-wave trends and Fibonacci (1.618, 2.618, 3.618) to project tops.
  • Identify trend breakouts and retests as entries: breakout above descending highs, retest of broken resistance as buy zones.
  • New project launch entry rule: wait for pullback after launch; target 61.8–78.6% retracement zones for better entry averages.

Risk Management And Position Sizing

• Define a single unit of risk: either stop-loss-based loss amount or full risk-to-zero amount.
• Calculate position size so that risking X dollars equals your predetermined unit of risk.
• Use R multiples: measure expected reward as multiples of risk (e.g., 7.3R target) to evaluate risk-reward.
• Smaller stop-loss increases reward multiple but lowers probability; choose based on strategy and conviction.
• Use the provided position-size calculator (TradingView tool or instructor’s tool) to automate sizing and risk control.

Portfolio Structure And Contribution Plan

• Conservative baseline allocation:
  • Core portfolio (75% of monthly contributions): primarily Bitcoin; long-term, rarely sold.
  • Risk-on ("casino") portfolio (25% of monthly contributions): split into high, medium, low speculative smaller projects.
• Example: $1,000 monthly → $750 core / $250 casino; adjust by risk tolerance (conservative/moderate/aggressive).
• Contribution cadence: consistent monthly contributions compound over time.
• Use separate accounts for day-trading (short-term liquidity) versus long-term holdings (cold storage).
• Exit strategy: plan to reduce or exit risk-on positions near Bitcoin cycle high; keep core holdings longer term.

Decisions

• Use Coinbase for fiat on/off-ramps and long-term custody convenience.
• Self-custody long-term crypto with Ledger for private-key ownership.
• Track portfolio and taxes with CoinTracker (connect exchanges, wallets, ledgers).
• Adopt a 75% core / 25% risk-on allocation framework (modifiable by investor).

Open Questions

• What exact monthly contribution amount will you commit to begin the compound plan?
• What personal risk tolerance and time horizon will determine your core vs. casino split?
• Which specific smaller tokens/projects will be included in your risk-on portfolio and at what position-size caps?
• Do you require a CPA or tax advisor with crypto experience to set up tax-loss harvesting and reporting?
• Will you use leverage for day trading; if so, what maximum leverage and risk-per-trade limits will you set?