The Crypto Dad’s Simplest and Safest Investments for Bitcoin Beginners
Crypto will soon become more popular than Fantasy Football — if the number of dads in Venice Beach asking me about their investments is a sign of the times.
Not a day goes by that I don’t receive text messages from dads asking whether they should buy the next dip. As our kids run around the beach on weekends, my fellow fathers also strike up conversations about what their next swap should be. So long ADP (Average Draft Position)! The new pastime for dads is what alt coin should be at the top of their lists.
Which makes me the Crypto Commissioner of Venice Beach.
If you are like any of these dads, you’ve probably bought some Bitcoin, Ether, and maybe a little Dogecoin. You probably made some money too! But as you see prices go up and memecoins get pumped, you wonder what to do next. There’s a little FOMO happening, and while you have some disposable income to invest in crypto, it may be hard to decipher what to invest in next.
This is the first entry in a series to help dads decide their next crypto moves. Here, I’ll start with the simplest and safest investments that I have made in the past couple years, and as the series progresses, we can get into some more complicated investment opportunities.
Standard disclosure here: Any type of investing comes with risk, so proceed with caution.
Tip 1: Don’t sell your Bitcoin or Ether.
First things first, selling Bitcoin and ETH has never been a good investment decision. Get in the mindset to hold your major crypto even through the dips.
Tip 2: Deposit your Bitcoin or Ether and earn passive income.
If you’ve ever wondered, how do I take advantage of the gains I’ve made investing in crypto while not pulling my money out? Crypto lending is the answer. It’s called “lending,” but it’s much closer to “depositing” into a savings account.
Just like a bank does when you deposit cash, with crypto lending (read more here), platforms will lend out your bitcoin and other digital assets, charging loaners interest in exchange for crypto dividends. Whereas the financial institution will lend your funds out to others and invest your money while rewarding you with an embarrassingly low interest payment, in crypto you can get a much higher return on your deposit.
For small bitcoin and ETH deposits, I use two companies:
- BlockFi: Established in 2017, this cryptocurrency financial services provider offers up to 5% APY (for less than .35 bitcoin and 50 ETH), if you stash your crypto in a BlockFi Interest Account. It has managed more than $10 billion in assets.
- Celsius: Counting more than 1 million users with nearly $27 billion in assets, this 4-year-old platform offers up to 6.2% APY (for up to 1 bitcoin and 100 ETH), if you keep your crypto assets in its platform.
For larger bitcoin and ETH holdings, I recommend:
- FTX: This 4-year-old exchange offers 8% APY on the first equivalent of $10,000 USD in your wallet. Amounts above that earn 5% APY.
- Crypto.com: Earn up to 8.5% on bitcoin and ETH holdings (you need at least $40,000 worth to get the best rate) with this exchange, but your assets have to be locked up for 90 days to get the best rates. Founded in 2016, it has served more than 10 million users.
Tip 3: Convert US Dollars to stablecoins and create high yield savings accounts.
If you’re just too risk adverse to buy anything beyond Bitcoin and Ether, consider stablecoins, which, like its name suggests, are crypto assets meant to hold their value — most of which are backed by real-world assets. One of the most popular stablecoins, USDC, is backed by the US dollar. And you can just buy USDC using USD.
The two platforms I use to deposit USDC are:
- Blockchain.com: Used by millions of users since 2011 with more than $1 trillion in crypto transactions, Blockchain.com offers 13.5% APY on USDC deposits.
- Crypto.com: Deposit USDC and earn 10% APY, although it’s locked-up for 90 days.
These are some basics to start earning interest and rewards with your crypto. For my next post, I will get into DeFi, including where you can buy and deposit crypto and earn 20% to 50+%.
Happy investing, Crypto Dads!