Every buy and sell in crypto exchange is driven by FOMO for beginners. Here’s few simple steps to avoid it and become a patient & professional crypto trader.
Every Day Scenario
Man I bought in to bitcoin with $2000 at like 17200. The bad things is it will not hit my account until Thursday because I did a bank transfer with Coinbase. So I’m at the mercy of the market until Thursday when my account is credited. Wish me luck lol!!!
This is a common situation and you must have faced it at-least once if you’ve started buying Bitcoin, Ethereum or Litecoin on Coinbase. This is a pure case of buying at wrong time due to something called FOMO — Fear of Missing Out. Bitcoin rallies on a particular day till $17200 and you just don’t want to miss it and hit the BUY button. Next second, it’s the above quote that runs in your mind!
How can you avoid this situation?
Add funds first and buy later. You won’t miss anything.
In coinbase, you can link your bank account and deposit funds to your USD wallet. As you know, since it’s an ACH transfer — it could take upto 4–5 days to clear and show the confirmed deposit in your wallet. When you have amount in your USD wallet, you can buy and sell Bitcoin/Litecoin/Ethereum instantly.
This makes you well prepared for the bullish and bearish trends of cryptocurrencies and avoids above kind of scenario.
Use Coinbase Instant
Coinbase Instant — This is another feature launched by coinbase to exactly avoid the scenario that we spoke about earlier. Coinbase instant is something which is currently available to users in USA and upto a limit of $25,000
With this, you can buy a cryptocurrency with maximum worth of $25000 instantly. That means, you don’t need to wait for the deposit to clear or wait for the Bitcoin to be confirmed on Thursday. You buy with Instant and it is available immediately to trade.
This increases risk of coinbase significantly — but given their volume and identity verification process, they should be confident about it. For a common man — it’s an interesting opportunity to buy and sell immediately if you feel price is going to drop.
Use Gemini for instant transfers
Gemini.com is another alternative for coinbase, where you can buy and sell bitcoin and ethereum. This website comes with few perks and challenges.
- You can deposit money and instantly buy Bitcoin — You can sell it immediately and buy again too. However, catch here is — you can’t take out that Bitcoin or Ethereum out of Gemini until your funds get cleared via ACH — i.e. 4–6 days. So, in a way it gives you freedom of selling if price is falling and buy the dips — but you can’t move to other exchanges.
- You can only deposit $500 per 24 hours as an individual. Duh!
While you learn to buy cryptocurrency, you also need to be responsible and pay taxes on cryptocurrency trading. Here’s an article which tries to reduce confusion and provide clarifications on taxes on gains from crypto trading.
How to file taxes on Cryptocurrency gains using BearTax_There’s a pressing need for crypto-traders to calculate their gains from Bitcoin across Coinbase, GDAX, Gemini…_hackernoon.com