Cryptocurrency books aimed at novice users or non-users tend to follow a very similar pattern. Almost all start with an obligatory “history of money” and explain why fiat is, let’s say, “flawed,” — to be polite. Then Bitcoin (BTC) in introduced, wielding a fistful of shiny new tech that can address some of these issues.
The books go into mining, wallets, exchanges, Ethereum and smart contracts, altcoins and decentralized finance — also known as DeFi. Once the authors are sure that the reader is sold on the idea of buying into crypto, they wrap it nicely up with a (foregone) conclusion and settle smugly back down.
However, even equipped with the desire (and know-how) to buy their first cryptocurrency, the reader may still feel there is a barrier to taking the next step. In fact, once the purchasing decision has been made, a whole new raft of questions crop up tha a savvy crypto convert will want answered.
How much should I spend? What strategies are open to me? Should I invest or consider trading? How can I maximize gains while minimizing risk? Few books delve deep enough into such territory to give a reader the confidence to enter the market with at least half an idea of what they are doing.
Breaking the mold?
Digital Assets: Your Guide to Investing and Trading in the New Crypto Market aims to fill that gap. Written by Jonathan Hobbs, an investment industry veteran turned independent advisor, the book is divided into two parts.
Admittedly, the first part kicks off as expected with cash-bashing; but in fairness, it would be hard to leave this out of a crypto book aimed at beginners. And let’s be honest, it never gets old to hear how bad the traditional financial system really is.
Hobbs then gives the lowdown on Bitcoin, but only so much as to show that it can be trusted, that it is a hedge against inflation and that there is a reason for it to continue to appreciate in value over the long term.
Ethereum and DeFi are similarly explained from an investor’s perspective, such as how money can be made through staking tokens on lending platforms, trading derivatives or providing exchange liquidity.
Part One is rounded out with a couple of chapters on how the range and accessibility of crypto products have much improved, for both institutional and retail investors. The development of institutional-grade custody solutions and crypto-exposed funds and trusts has finally opened the floodgates to an increasing amount of institutional and corporate money.
Improvements in the security and functionality of retail exchanges and wallet solutions, along with the rise of DeFi, cater to the needs of individual investors like never before, and this gets us to the point at which we are left off by most of the other books.
Saving for a rainy day
Luckily, this is where Digital Assets is just getting started. The longer Part Two deals with all the nitty-gritty on trading and investing, starting with the question of how much of one’s assets should be held in crypto.
Hobbs explains the importance of a diverse investment portfolio and compares the historical returns on various proportions of stocks, and having up to 10% in Bitcoin. Certain readers may be dismayed to hear that due to crypto’s volatility, he does not recommend putting too much of one’s nest egg into it.
Digital Assets also provides examples showing the effect that rebalancing a portfolio can have on reducing risk and exposure to volatility.
The book continues on to crypto investment strategies, covering the ever-popular HODLing, dollar-cost averaging and the more aggressive value averaging. The potential results of each are illustrated with examples using real historical data over various time frames.
And then, it gets started with the big kid stuff…
Make the trade
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