Crypto Investing: Tips and Strategies for Newbies

Yasi Zhang: Today my guest is Alexandre Lores, and since a young age, he was always fond of math, computers and economics as an avid self-learner. So when he found Bitcoin five years ago, he was hooked and has been studying crypto markets ever since. So earlier last year he founded his crypto news website and blog called thelatestblock.com and is the Director of Blockchain market research at Quantum Economics. And around the same time, he also became a full-time entrepreneur and created educational and news content on cryptocurrency, across social media, on Twitter, Medium and YouTube. There is no better person that I should interview other than Alexandre, to ask about everything about cryptocurrency and investments. Let’s hear about and welcome to Fast Track podcast Alexander.

Alexandre Lores: Hi Yasi, thank you so much. It’s an honor to be here and I really appreciate it. And I love what you do. Amazing introduction, I am honored. I also want to say one thing that I’m passionate about is freedom and financial freedom is an important part of that.

So thank you for what you do. It’s so important that you, put out this message and these tools that people can use, to improve their financial condition, increase their financial freedom, which, is the goal that attracted me to Bitcoin. And what also attracted me to, you know, create content, be an analyst and enter the industry professionally.

So I could help as many people as possible to achieve that in these interesting shall we say financial times? Yeah.

Yasi Zhang: And can you tell us a little bit more about, your background and the, how, what happens, lead you to Bitcoin and all, everything that started from there.

Alexandre Lores: Thank you.

So I had a number of different jobs in educational area, volunteer activities. So I spent a good amount of time doing tutoring and educational side. And then the pandemic hit and my life. I was living in New York life flipped upside down. I was unemployed and my wife and I decided to move down to Florida and start over.

And I did get a job, interestingly that is in the energy sector, which is adjacent to Bitcoin in some ways due to mining, which we’ll talk about in a moment, but moved down to Florida I restarted and decided to do this professionally. Skipped ahead a bit, I found Bitcoin in 2017, a friend told me about it in New York.

At first I was like, oh wow. I was into stocks and so on. And it could be, fast money, but then the more I learned about it the more I became interested in the technology and how that could change the world and also how you could interact as part of the community and that fascinating me.

Yeah.

Yasi Zhang: Which part of the, the decentralized technology and ledger technology, or which part of the Bitcoin that fascinates you the most in particular, because a lot of people talk about the community and you know that democracy, but is there anything in particular that you can relate to it?

Alexandre Lores: I’m a math geek and also in economics geek as well. So the concept of money. Finance and computers combining into one was kind a fascinating to me. A comedian who was actually making fun of Bitcoin, made a comment though that it’s everything you don’t understand about computers plus everything you don’t understand about money, but I flipped that around and be like, okay, you can make this understandable.

And it’s fascinating technology that brings modern computer technology, the internet digitization with economics, with money, with finance and it’s an innovation that can change the world. And I wouldn’t go so far as to, there’s certain Bitcoiners that are extremely passionate and consider it’s going to change philosophy and religion and all this stuff.

I think that’s a bit extreme, but I would say: it’s an innovation that can improve the world. I think the best, most important innovations improve the world step-by-step in a mild evolution, not so much a revolution, which could be violent I like the whole idea of a improvement.

Yasi Zhang: Yeah.

And from Bitcoin then have you investing other projects, other cryptocurrencies, and how do you select in what cryptocurrency you want to invest?

Alexandre Lores: It’s a great question and I’ll make a quick comment. Just for those who are listening. My financial situation is not the same as yours necessarily, so I’m not a financial advisor, but I will say that everybody can get a pretty good idea of what risk they’re willing to take and what is their strategy.

And I think they should develop a strategy before they start. So in my case I was in a situation with very little capital. My goal was to, with, somewhat conservatively, but aggressively grow that capital. So I’m still the majority of my, net worth is in cryptocurrency. And the majority of that is Bitcoin, but I’d say a little over 50% is in Bitcoin.

Traditionally. The portfolio of a money manager, they suggest 60% stocks, 40% bonds or something. So to be like 60% Bitcoin, 40% riskier, other cryptocurrencies altcoins as we call them alternative coins that are other cryptocurrencies and Bitcoin. Bitcoins, larger, more value,

so it’s growth is going to be slow. And it’s volatility a little bit less than a newer cryptocurrency. I usually don’t go too heavily into the riskier ones. I do hold a good amount of Ethereum and I hold also a kind of cryptocurrency called stablecoins which are in my case tied to the us dollar, they can also be tied to the Euro, Canadian dollar, Australian dollar, yen, et cetera.

And they hold value generally if they’re put together properly with a national currency. So if you’re interested in. As a number of purposes, first of all, there’s venues where you can get more interest than you can in a bank account, decentralized finance places where you can put your can even hold us dollar coin, the stablecoin.

It doesn’t move up and down in price, but this place you can get five, 10, 15% interest on that complaint holding it there. So that’s better than you can in the United States and Canada and in Western Europe and in a bank. 1% interest or something.

Yasi Zhang: Yeah. So one question on that on behalf of the audience, some people might ask, the stablecoin is packed.

Is it packed again, USD or is there any risk or how would they have this confidence in this stablecoin is one equals two, one

Alexandre Lores: USC? That’s a great question. Point I want to make for this and other subjects, you need to do your own research. And I created a lot of content on my website, thelatestblock.com where I try to break that down for people.

So I would like to ask you to subscribe there, just like thelatestblock.com forward slash subscribe, but there’s some like US dollar coin has over, has undergone an audit where they’ve shown that their bank account has dollars to match which is why they maintain that there’s others a bit looser US dollar, Tether.

It’s a very popular one. Still the most popular one US dollar coin I think is catching up, but they were one of the original ones that were popular with crypto traders. So you could buy and sell using Tether so you could measure your gains in dollars. They found it certain times they weren’t actually back.

It was pretty much the market decided that was worth the dollar. With stable there’s others, like there’s one called DAI. DAI which is the con algorithmic stablecoin, which has a lot more complexity. They essentially have another cryptocurrency that’s attached to it. These two cryptocurrencies the other one is not as stablecoin, but they create or destroy it based on how many stablecoins there are.

So its value is essentially Actually kept stable by a volatile cryptocurrency in a ratio. So that works as long as it works. That one particularly is, has done well and has always been very stable and a popular one. There’s been some others that were supposed to be stable coins that crashed a very famous one was called Titan that unfortunately, Mark Cuban, a well-known entrepreneur invested in and promoted.

And it, it actually went to essentially to nothing. And then last week there was another stablecoin. I forgot it. It collapsed. So there’s various situations. They’re innovators in the space are trying to improve it. There’s a stablecoin called UST which was created by a cryptocurrency project called

Luna or Terra they have a cryptocurrency called Terra and the, they actually are buying Bitcoin to back their stablecoin. So they actually bought a billing and a half dollars a Bitcoin. So there’s various solutions to that, but I would say the safest and least risky would be US dollar coin because it’s, they have evidence that they have dollars in a bank account in the US they’ve been invested in by major us corporations at Coinbase.

One of the major investment banks, I believe it’s Morgan Stanley and recently BlackRock is actually endorsing it and Visa and MasterCard have been testing it. So that’s the more regulated, on the safer end with stablecoins, you don’t have much to gain, it’s not like some risky cryptocurrency that can go, but thousand percent it’s been a stay at dollar.

So you have lots to lose if it’s not really stable and you have really nothing to gain. I go with US dollar coin is my favorite because it’s safer one. I’ve used DAI as well. Cause it’s been there for years. And it’s, it is backed by a cryptocurrency that they can destroy or add to, to keep the thing stable.

So over time, those two have been the most stable, also in the United States on the Coinbase, which is the main place where people will buy crypto. You can actually sell it for a dollar no matter what, if the market crashes they pledge, you will always be able to sell it there for a dollar and you can always buy it for a dollar with no fees.

So it’s a pretty, pretty much backed by a multi-billion dollar company and invested in by massive corporations that are regulated. So US dollar coin, I would say is probably the safest.

Yasi Zhang: Yeah. And later I’ll ask you about the staking, but coming back to your investment you mentioned about the Bitcoin, Ethereum.

And then how do you select this volatile or risky coins to invest? What kind of a process you usually take to your analysis?

Alexandre Lores: Yeah, that’s a great question. I would say I still like to keep, I’m not super risky because there’s up markets and down markets. One goal I have is to hold Bitcoin and build generational wealth.

So I see that as more of a 10, 20 year process than timing the market. So whenever I get a chance to try to buy more Bitcoin, the other coins, Ethereum is pretty stable. I’ve dumped in, but it’s going to anywhere. Past that I think the strategy is to buy low and sell high. And I see it more as a trading thing.

When the market’s down, I try to evaluate some that I think have potential and hope to buy them cheaply and sell them expensively. There’s also the projects that I like that are like decentralized finance like a Cake, which is connected Pancakeswap that give yield. So some of the projects I like to hold because they give yield.

And I’ve more see that as speculating and really gambling. Whereas I see holding Bitcoin and Ethereum for the next 10, 20 years, it’s more of a more certain play to grow wealth. And I think we’re still early as regards to global adoption. So I think it’s hard to go wrong with those.

Yasi Zhang: Yeah. So earlier, you mentioned staking, and also you mentioned that yield. So the next question would be, can you give us a short introduction in a simple language or different kinds of ways to earn passive income or active income with crypto currencies?

Alexandre Lores: Great.

So the concept of your money working for you, isn’t new, it’s just difficult in the current banking sector. The money really works for the bank. So decentralized finance created a lot of tools to do that. And there’s also companies like Nexo, which is near up Celsius that have created passive income or, income, investment opportunities.

That are centralized companies, but they offer a simple, you put your money in there, but instead of like a bank, you get 6% interest, maybe less for crypto, but for stablecoins, usually it’s six to 8%. If you’re actually in the US that pretty much shut those down.

If you’re around the world, you still have that available to you. Those are technically centralized finance because they’re companies, then you have decentralized finance, which is a riskier model, but which has a lot of potential because, the chances of getting greater returns are there and anything investing your risk and return go together.

There’s no sure thing. I’m not the world’s greatest expert on that, but essentially the concept is you stick your crypto to be on your wallet or on a website, which it’s a little bit safer if it’s on your wallet, like a metamask, or a hardware wallet, if you can like a trezor or ledger for hardware, wallets.

And you get paid and if you lock your crypto there for longer, you’re giving that ecosystem, liquidity, essentially like a bank would be, and you’re enabling them to operate and people to trade on it and do various things. So the law generally there’s different options. The longer you lock, the more higher your interest rate will be.

Yasi Zhang: And that is the staking.

Alexandre Lores: Yes. And then there’s other things you could do that get even more complex yield farming, where you’re basically also providing liquidity, but if the price of the coin goes too far up, you actually can lose some coins. So it gets a bit more complex and risky, but staking is the most simple way and it’s a bit more certain you’re expecting to return.

Now Defi is still in a very new state. There’s over a billion dollars hacked last year. I would not recommend putting your life savings in there. Anything you make in there. I would recommend putting it in there and taking out your original investment as soon as possible, especially some of the more, and there’s some really risky ones that give you like thousands of percent interest that, become less over time.

But I would recommend getting your original investment out as quickly as possible. And then only really seeing that as speculation, like money that you could grow by a hundred times. And it could also go to zero if you’re okay with it. It’s a good place to put your money, right? Same for an NFT.

Some people try to buy NFTs at the beginning and sell them high. I I think it’s a very risky market with a bit of a bubble. And I think some people make a lot of money. I think 99% of people trying to do that will lose money in NFTs. Decentralized finance is a bit more, you have some options that are a bit more stable, as long as it doesn’t get hacked.

With stablecoins and you can put you have options to take your Bitcoin and put it into a different platform. Basically use your Bitcoin to create another asset, which is based on your Bitcoin. And then you make interest on that asset. So there’s ways of doing it that are not as risky, I think that NFTs, at least in terms of buying and selling JPEGs is probably the riskiest thing you could do.

And then most people will lose money in that.

Yasi Zhang: Yeah. And so can you also tell us a little bit about mining? Because at the beginning, when Bitcoin started to become popular, right? Everybody knows, oh, I need to mine Bitcoin, mine. So now there’s people talk about stake. Just give us our audience a basic introduction.

What is the difference? Why they are mining and staking?

Alexandre Lores: So Bitcoin mining is a process of not really mining your computers are actually verifying transactions on the network and providing the service security and essentially being the kind of traffic cop for the network. You get rewarded in essentially Bitcoin. Now due to the size of the network it does provide a lot of security, but it’s pretty much unrealistic to do mining in a profitable way, unless you are either have a very unique situation where your electricity is almost free which doesn’t really exist in Europe right now. It does exist or you have a massive facility, like you’re able to put in millions of dollars into it.

And mine maybe if you have a connection to a wind farm, solar farm natural gas oil, if you’re right there. So Texas is a very place in the United States to do mining China was until abandoned. So a lot of the, if you have immediate access to a hydroelectric plant so it’s very complex.

This point 10 years ago, you could mine Bitcoin from your laptop. That’s no longer the case. They have high powered computer chips called Asic. And, but essentially, you would have the facility, you would actually join a pool that would increase your odds and you would get paid in Bitcoin.

So before electricity prices essentially doubled this year than last year, I think it was very profitable. There’s still ways to make it profitable, but it’s very hard. It’s not really something you can do as an average person, mining Bitcoin. Smaller cryptocurrencies that you probably could possibly could.

And do you know if you have a reasonable electricity rate, at least in the United States, maybe about 20%, 30% of the United States as kind of electricity rate, or if you’re somehow renting somewhere and the owner is okay with you mining and they pay the electricity bill, otherwise it’s difficult and it takes a lot of initial investment.

If you put in millions and you’ve been mining for years it’s a fantastic investment. You’re essentially your only cost is Bitcoin minus the cost of electricity. So if you’ve been mining, you’re doing fantastic. It’s very difficult to get into mining Bitcoin, which is probably another reason why a lot of people that were maybe mining Bitcoin in their laptop are excited about going to smaller cryptocurrencies and being a bigger fish in the pond.

So there’s a lot of opportunities out there. It’s an extremely risky things that I would touch with a 10 foot pole, but others may want to experiment with it to see if it makes them money.

Yasi Zhang: Yeah. Now, It’s getting harder and harder to, to mine Bitcoin and be profitable.

So on the other hand the staking, can you say, like anyone can stake from the home computer?

Alexandre Lores: Yeah, staking is, staking is something that you could even do from your phone. If you have a internet connection, staking, doesn’t use your computer’s power.

Essentially it works just like the bank account where you just put your money there. We deposited essentially with some differences, but you essentially deposit it. You can, even, as long as you have your account, you’re logging info, your address, your wallet address, you essentially don’t need to stay connected.

Your money is there. They can, the network utilize it. So you get rewarded for your money. They put your money to work. You it’s essentially like a bank except it’s decentralized. So it’s essential institution taking 99% of the profit and you getting almost nothing. You get a fair share.

Yasi Zhang: Yeah. And also the network decides what’s the ROI, not the bank decides the ROI.

Alexandre Lores: That’s right. Yeah. Depending on how many users there are. And, and how much gets you straight? How much of your currency gets you?

Yasi Zhang: Usually what’s the range of let’s say common APW can someone expect when they stake a token?

Alexandre Lores: If anything, I would touch I would be extremely happy with things from, anywhere above 5% to around a hundred percent, which I would consider more risky. I have definitely learned about options that oftentimes when a new cryptocurrencies launching, they reward the first investors, like in anything, if you get in first.

So there’s some ones that have ROI starting at a hundred thousand percent or something. I wouldn’t consider that an investment. I would consider it, extremely risky. So I wouldn’t be comfortable with that. I generally, when anything hits above 100%, 200%, I start to deem it so risky that I would, even if I made the money, I would feel bad because the people coming after me are going to get scammed.

So I’m not saying they’re all scams. I’m saying that I personally don’t feel comfortable with anything above 100, 200%. I would still research it, but again, I might be missing out on some opportunities. When I get around to researching it I look forward to doing that, but I prefer a model that’s a more kind of as long-term value and worth than simply, I think anyone can now put together with technology.

Some coin that offers massive rewards that is unsustainable and only rewards early investors with no actual value.

Yasi Zhang: You know why I asked you this question is just to let the audience know what’s the expected, ROI, with the staking, as you mentioned, maybe above 5% up to 100%, and even in Switzerland, the banks interest rate is negative or zero. If you put a lot of money, not a lot, maybe 200 K or something in the bank in Switzerland, you get negative interest rate. On the other hand, you can stake like stablecoin. Get, I don’t know how many percent, like 7% or something like that per year.

Alexandre Lores: Yeah. I’m very happy with Bitcoin and Ethereum.

Unfortunately their services are closing the new deposit. Depending on how much you have a small amount, you can usually get about five, 6% interest on Ethereum and Bitcoin. If you have a larger amount, though, usually you’re limited to 1% for the larger amounts. If you’re really like a whale and stablecoins, eight to 10%, I’ve seen, I saw one platform which just launched this actually decentralized in the US it’s offering 16%.

So I’m going to check it out, but. Look, if you’re making five to 10%, at least you’re keeping up with inflation at this point. So you’re making less, you’re actually, at least for a stablecoin you’re losing value. Inflation in the us is an eight and a half percent

Yasi Zhang: right now. Oh my God.

Alexandre Lores: Yeah. In Europe, it’s somewhere, it’s getting up to five, 6%, which is highest in 30, 40 years in both places. So you’re looking at what they call real inflation, if you’re making 1% interest, you’re losing 7%. Your a hundred dollars is turning into $92. .

That’s a lot when inflation is around 1%, 2%, it doesn’t really impact you because you generally get 1%, 2% raise and a job where, you can generally keep up with it right now that situation is become out of control.

Yasi Zhang: Yeah. I think for the audience, maybe you might just start to consider if you are interested in cryptocurrency study it.

And also if you are interested in earning passive income or kind of, hedge against inflation, maybe say, Bitcoin is an option right now, again, here, we’re not, it’s not a financial advice. Do your own research. And I will ask you, about more about your platform, like thelatestblock.com, because I think then my audience could find a lot of useful information there.

Could you tell us a little bit more about, what your rights and then what’s the main topics you cover?

Alexandre Lores: Thank you so much. I did write an article about, beginning investors and I think beginning investors I think, I wouldn’t do much more than buy some Bitcoin or a Ethereum and then just sit on it for six months and see how you feel.

When it goes up 30%, it’s great. But when it goes down 30% or more, how can you handle it? It’s different for everyone. And if you can’t handle it you know that at least, you don’t go invest in 37 things and steak, and then it crashes 50% and you have a panic attack.

We don’t want that. So stablecoins are a great option, especially if you’re starting or if you are trying to preserve capital. If you’ve grown lot of people that make a lot of money in crypto and trading, they’re smart. If they move it over into stablecoins, that kind of, taxes to pay on their gains and they want to keep preserving it and growing it at a more conservative, pace, more moderate pace.

They have stable coins and get 10% interest. So as opposed to, a crypto that could triple and then we could lose value again in a month. It’s a good way to preserve a percentage of it and kind of capture gains. Yeah. And yeah, like you said, it’s, you can experience the benefits of crypto sending it, receiving it, and without the volatility with stable coins.

Yasi Zhang: Yeah,

I’m on your website, thelatestblock.com. Then you have Bitcoin, you have stocks, you have personal finance or crypto NFTS and learn, I think is a great platform to anyone who wants to, get started with crypto investment. I want to find out more. So my last question would be, where can people find your work?

And they follow you? How can they reach out to you if they have questions or if they want to reach out?

Alexandre Lores: I would say the first thing is aside from buying some Bitcoin, you need to learn, you need to read a lot. So I try to take a bunch of knowledge and put it in a small little packet. So it takes you a couple minutes to read is not 10 hours. Thelatestblock.com forward slash subscribe. This is a great way to sign up for the newsletter.

You get a weekly piece, it’s usually educational nature. You can also find me on Twitter. There’s The latest block is on Twitter, Instagram, Facebook, LinkedIn, also my name Alexander Lores. Google me. Most of my content is on Twitter. So that’s a great place. If you want to follow me in more, more actively day-to-day otherwise just go to thelatestblock.com for slash subscribe and get a weekly update you can read in five minutes or so.

Yeah. Okay.

Yasi Zhang: Thank you so much for beinghere Alexander.. And then we will put the links, thelatestblog.com and your Twitter link in the show notes. So I hope the audience can, follow you, check out your blog, subscribe, and thank you so much for sharing your knowledge here.

Alexandre Lores: Thank you so much Yasi. It’s been a pleasure and an honor to chat with you.