Editor’s note: Bitcoin and cryptocurrency in general is, at the moment, something of a gold rush. Like all gold rushes, some people in it will make their fortunes, while others will lose their shirts. We urge caution to any traveler who is looking towards cryptocurrency to fund their travels — there are some signs that crypto is a bubble, and even at its best, it is a very volatile investment. We don’t suggest putting all of your money into it. Diversify and keep yourself safe. But, if you’re willing to take some risks, learn from us: here’s how one traveler made his fortune on cryptocurrency.
Nearly a decade ago, I hit the open road in search of adventure. I traveled on a budget of just $10 a day, and sometimes less, across far-flung lands such as India, Venezuela, Myanmar, and Israel. I was a broke backpacker — I hitched, I slept rough, I picked up work wherever I could, no question asked. I worked behind bars, I herded goats, I sold marijuana on the beaches of Goa, I did whatever it took to keep myself on the road — and to avoid living in England.
That all changed two years ago when I met my wife Esme while I was hitchhiking across Iran. We fell madly in love and backpacked across Iran, Pakistan, Bhutan, and Nepal. At the time, I had a somewhat popular travel blog and was able to pull in about $500 a month from advertisers, but it was a ton of work for not much reward and, as both myself and my wife had no money, we quickly found ourselves sliding into bankruptcy.
I had read about many successful bloggers making a killing online, and I decided the time had come to focus on building a reliable online income. I launched several new online ventures — teaching myself as much as possible about SEO, affiliate marketing, drop shipping and brand partnerships. I launched an SEO agency, a travel gear company, and started running my own backpacker adventure tours to Pakistan — if I sensed an opportunity to make some cash, I went for it.
While I did find all of this incredibly exciting, there was one opportunity which was to turn into a total game changer — cryptocurrency trading.
Turning to Bitcoin
I was aware that cryptocurrency was exploding into mainstream culture and so I took to the interwebs and started researching the best way to get involved in this gold rush. I got chatting to a friend who was an old hand at trading Bitcoin and had turned a few thousand dollars into several million in three years. Encouraged, I decided to put in everything I had, and then some, into cryptocurrency.
One year ago, I piled my last $4000 plus an additional $5000 on credit cards into Bitcoin and I taught myself how to trade cryptocurrency. I made a lot of stupid mistakes: losing money along the way by buying into huge bumps at the very top, and panic-selling falling coins just before they bounced back up again to new all-time highs.
But luckily, the market was on such a strong upwards trend that I quickly doubled my initial investment just by having my foot in the door. Over time, I got better at reading the charts and learned to follow cryptocurrency news on Twitter and in Facebook groups to pre-empt big movements across new coins. Slowly but surely I got more and more confident at identifying good coins to invest in.
I diversified into multiple new coins, I spent hours researching and finding opportunities for crazy growth. Within a year, I had turned $9,000 into $350,000 trading Cryptocurrency.
Spreading out risk
My strategy is pretty simple: I spread my risk across multiple different coins and focused on choosing coins that solve real problems — for example, one of my favorite coins is Siacoin. This is a nifty project which provides users with decentralized cloud storage at a fraction of the price of the Amazon cloud. As the world’s data needs continue to grow, the value of this coin should increase.
Another coin worth mentioning, and one that has been in the news a lot recently, is 2017’s best-performing cryptocurrency — Ripple. Ripple is one of the most cost-effective and fastest ways to send funds across international borders and is being championed by several banks, most notably by Santander. While most cryptocurrencies focus on disruption of traditional financial institutions, Ripple aims to join the crypto world with the traditional banking world.
It’s important to realize that trading cryptocurrency carries a risk and there is a huge amount of misinformation surrounding the market — wise investors should research far and wide before choosing which coins to buy into.
So, how exactly can enterprising backpackers join the crypto-train and invest in Bitcoin and other cryptocurrencies?
What travelers can do to get in
Getting money IN to the crypto market is, unfortunately, not as simple as one would hope. Most trading exchanges do not allow you to buy cryptocurrencies with fiat currency – e.g. Euros, pounds, dollars, etc. — so you must first purchase Bitcoin elsewhere and then send that Bitcoin to an exchange.
There are a few different reputable, and safe, sites out there that allow you to purchase Bitcoin using bank transfer or Paypal, the best-known one is undoubtedly Coinbase. Once you have bought your Bitcoin, you can transfer it to a trading exchange and then use your Bitcoin to diversify into other cryptocurrencies.
If you do choose to invest in cryptocurrency, here are my top tips for happy trading:
- Chill out — Perhaps my biggest tip is to simply buy several coins and wait two years — if the crypto market continues at this pace you will make a killing simply by having your foot in the door. Saying that, be sure to properly protect your investment and to take out your initial seed money, and perhaps some profit, along the way so that you reduce your risk.
- Always use 2 Factor Authentication — This adds an increased level of security and drastically reduces your chances of getting hacked or phished and having your coins stolen.
- Spread your risk across multiple coins — Like traditional stocks and businesses, coins can and do fail: choose several coins so that if one of your coins fail you do not lose your whole investment.
- Take profit out — Set a target and when you hit it take out some of your profit. For me, this target was five times my initial investment — once I hit this, I took out double my investment — this meant I was playing with profit and had recouped my seed money (x2) back into my bank account.
- Focus on swing trading, not day trading — Day trading is stressful and challenging so I highly recommend you simply create a portfolio of your favorite coins and then wait for a year or two. If you do want to actively trade — i.e. buy coins, sell them at a profit, rebuy them when the price dips and so on — then I recommend trying to catch big movements in the market. This takes longer but it’s easier and safer than day trading.
- Foster nerves of steel — There is a huge amount of disapproval of cryptocurrency and media posts bashing Bitcoin as a bubble are pretty common. News DOES move cryptocurrency prices and the volatility in the market is massive — one day the whole market can be up 15%, only to be down again the next day. When the market is down people tend to freak out and act as if the sky is falling. So far, though, crypto has always bounced back.
- Open a trading account sooner rather than later — Many cryptocurrency trading exchanges are closing their doors to new members on account of insane demand that is overloading the servers. If you are interested in trading today or even a year in the future, open an account as soon as possible to avoid disappointment. You can see a list of exchanges that are currently taking new members in this post.
What it can mean for travelers
For me personally, $350,000 is a life-changing amount of money and I am unbelievably excited to be living the dream — I love working online and building my businesses while traveling the world with my partner. It doesn’t get much better than that.
If you do choose to invest in cryptocurrency, do not invest money you cannot afford to lose and be warned that this is a waiting game — the market goes up, the market goes down — you need to be able to choose when to take your money out so it’s important that you only put money into cryptocurrency that you will not need to touch anytime soon. Good luck!