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Cryptocurrency

4 Pitfalls to Avoid When Investing in Crypto

2024-12-03

Investors are increasingly drawn to the world of cryptocurrency, with recent events like Trump's reelection adding to the allure. However, it's crucial to approach this asset class with caution. Robert Cannon of Experity Wealth shares valuable insights on the common pitfalls that beginner crypto investors should avoid.

Secure Your Crypto Investments with These Tips

Overallocating to Crypto

In the past decade, crypto has gained significant mainstream acceptance, but that doesn't make it a safe asset. As Robert Cannon warns, one common mistake is being overly bullish and allocating too much of one's portfolio to crypto. It depends on individual factors like age, financial needs, and risk tolerance. Generally, Cannon recommends allocating between 1% and 10% of the portfolio to crypto. This helps mitigate the risk of losing everything if the market takes a downturn.Another aspect to consider is the potential for emotional biases. When crypto prices are soaring, it's easy to get carried away and invest more than planned. However, a disciplined approach is essential. By setting clear allocation limits and sticking to them, investors can avoid the pitfall of overcommitting to crypto.

Not Having an Exit Strategy

In Cannon's experience, some investors hold onto their crypto assets for too long without a clear exit strategy. They believe that the price of bitcoin will continue to rise indefinitely and miss out on taking profits at the right time. Having an exit strategy is crucial when dealing with a risky asset like crypto.Investors should have a rough idea of how much money they want to make or are willing to lose and set an investment time period. For example, they might decide to exit a position once they double their initial investment or set up a stop-loss to automatically close out if the asset falls below a certain price. This way, they can protect their profits and minimize losses.

Buying Highly Speculative Coins

The cryptocurrency market is filled with a wide variety of coins, but not all are created equal. Cannon advises beginners to start with the basics and invest in bitcoin. Other cryptocurrencies can be highly speculative and can lead to significant losses in a short period.For example, some new or niche cryptocurrencies may have little to no underlying value and are driven mainly by speculation. By focusing on bitcoin, which has a more established market and a track record, investors can gain stability and reduce the risk of losing all their money.Investors can purchase bitcoin through popular exchanges like Coinbase or Robinhood. Some also prefer self-custody wallets for more control over their assets. Additionally, there are alternative ways to invest in crypto, such as buying a bitcoin ETF, which is less risky than buying cryptocurrency outright.

Not Thinking about Cryptocurrency Tax Implications

Similar to stocks, crypto transactions are subject to capital gains taxes. However, due to the nascent nature of the crypto market, certain tax laws are still evolving.When purchasing crypto on an exchange, investors may receive a cryptocurrency Form 1099. But there are no explicit rules requiring exchanges to provide these documents. This means that investors may need to be proactive in reporting their gains to the IRS.New legislation starting in 2025 will require crypto exchanges to issue Form 1099-DA to track digital asset transactions. Meanwhile, President-elect Trump has suggested eliminating capital gains taxes on crypto, which could have a significant impact on the tax landscape. Buying bitcoin through an ETF simplifies tax reporting as the security is treated like any other stock.By being aware of these tax implications and taking appropriate measures, investors can avoid potential tax headaches and make more informed decisions.

Coinbase COIN CEO Brian Armstrong has emerged as a prominent figure in the ongoing debate surrounding the U.S. government's handling of its Bitcoin BTC/USD holdings. His strong stance against the potential sale of these holdings has sparked significant discussions within the cryptocurrency community.

"Coinbase's Armstrong Urges Against US Govt Bitcoin Sell-Off"

Debate Intensifies After Bitcoin Transfers

On Tuesday, Coinbase COIN CEO Brian Armstrong voiced his vehement opposition to the U.S. government selling its Bitcoin holdings. This came in the wake of a significant event where 19,800 bitcoin, valued at $1.9 billion, was transferred to a Coinbase Prime deposit address on December 2. The debate surrounding this transfer has intensified, with various experts and industry players weighing in.Jason Lowery, a U.S. Space Force major and author of Softwar, tweeted that this is a "huge strategic mistake." He emphasized that there is no price at which it makes sense for the U.S. to sell any Bitcoin it holds. Armstrong echoed Lowery's sentiment, stating, "Agreed – the U.S. government should never sell Bitcoin IMO."

Strategic Concerns Over Bitcoin Sales

Lowery argued that the government lacks an understanding of Bitcoin's strategic value. He drew parallels to past shortsighted policies and warned that the U.S. may later attempt to reclaim Bitcoin sold off due to its ignorance of its importance. Referencing Executive Order 6102, a 1933 directive that forbade hoarding gold, Lowery suggested that future policies might aim to reacquire Bitcoin in a similar fashion.Crypto educator Toby Cunningham labeled the potential sale as "dumb," asserting that the supply would be instantly absorbed by the market. Meanwhile, Tether USDT/USD strategy adviser Gabor Gurbacs speculated that the transfers could be routine custody updates rather than sales. He noted, "There is also a lot we don't know. It's not guaranteed they will sell. I haven't seen any official auction information yet."

Mixed Signals and Market Implications

While the government has moved 25,999 bitcoin worth approximately $2.49 billion to Coinbase this year, analytics platforms suggest that not all these transfers are intended for sale. Spot On Chain indicated that some movements could involve consolidating wallets or upgrading security for older addresses. CryptoQuant's head of research, Julio Moreno, noted that it was "highly likely" only 10,000 bitcoin were sold in the latest transactions, with the remaining 9,800 BTC transferred to a newly created wallet.Currently, the U.S. government holds approximately 183,850 BTC valued at $17.7 billion across various addresses. Armstrong emphasized, "The U.S. should recognize the significance of this technology before making irreversible mistakes."

As the year 2024 comes to a close, it's time to reflect on the vast array of entertainment that graced our screens. Television emerged as a dominant source of amusement, offering a diverse range of genres and captivating stories. From fantasy to sci-fi and comic book shows, viewers were treated to an abundance of new characters, narratives, and beloved favorites.

Honoring Television's Best with Golden Issue Awards

At ComicBook.com, we take pride in celebrating the television shows that brought joy to our homes throughout the year. Chosen by our dedicated staff, these Golden Issue Awards represent the pinnacle of television entertainment. Let's delve into the nominations and discover the stars that shone brightest.

Best TV Show

Television offered a plethora of captivating shows this year, and the Best TV Show category showcases the ones that held our attention. Fantasy and sci-fi dominated, captivating audiences with their imaginative worlds. Doctor Who, with its timeless adventures, Fallout, set in a post-apocalyptic landscape, House of the Dragon, bringing the world of Game of Thrones to life, Shogun, with its historical grandeur, and Star Wars: The Acolyte, expanding the Star Wars universe, all made the cut. These shows demonstrated the power of television to transport us to different realms and engage our imaginations. 2: Each of these shows brought something unique to the table. Doctor Who continued to charm audiences with its time-traveling antics and the evolution of the Doctor. Fallout offered a gritty and intense post-nuclear world, while House of the Dragon captured the essence of Westeros with its epic battles and political intrigue. Shogun transported viewers to feudal Japan, immersing them in a world of samurai and honor. Star Wars: The Acolyte added a new chapter to the Star Wars saga, introducing exciting new characters and storylines.

Best Comic Book TV Show

Comic book-inspired television remains a fan favorite, and 2024 was no exception. This category celebrates shows that draw inspiration from the world of comics, bringing beloved characters and stories to life. Agatha All Along, Batman: Caped Crusader, The Boys, The Penguin, and X-Men 97 all vied for the top spot. These shows offered a mix of action, drama, and humor, appealing to both comic book enthusiasts and casual viewers alike. 2: Agatha All Along brought a unique twist to the Marvel universe, with Kathryn Hahn's portrayal of Agatha Harkness stealing the show. Batman: Caped Crusader continued to be a fan favorite, with its dark and gritty take on the Caped Crusader. The Boys delivered its usual dose of social commentary and action, while The Penguin introduced a new and intriguing version of the iconic villain. X-Men 97 brought back the beloved X-Men with a fresh new spin, captivating audiences with its nostalgic charm.

Best Animated TV Show

Animation took center stage in 2024, especially in the comic book space. This category highlights the best animated shows that entertained audiences of all ages. Batman: Caped Crusader, Creature Commandos, My Adventures With Superman, What If…?, and X-Men 97 all made the nominee list. These shows proved that animation can be just as engaging and exciting as live-action television. 2: Batman: Caped Crusader continued to be a visual masterpiece, with its stunning animation and thrilling storylines. Creature Commandos brought a unique team of heroes to life, each with their own distinct personalities and abilities. My Adventures With Superman offered a fresh take on the Man of Steel, exploring his adventures in a more lighthearted manner. What If…? pushed the boundaries of storytelling, presenting alternate versions of familiar characters and events. X-Men 97 brought back the X-Men with a modern twist, captivating fans with its vibrant animation and exciting storylines.

Best Male TV Character

The male TV characters of 2024 were diverse and captivating, ranging from heroes to villains and everything in between. Ncuti Gatwa as the Fifteenth Doctor in Doctor Who, Walton Goggins as The Ghoul in Fallout, Alan Ritchson as Jack Reacher, Colin Farrell as Oswald Cobblepott / The Penguin in The Penguin, and Hiroyuki Sanada as Lord Yoshii Toranaga in Shogun all made the cut. These characters brought their respective shows to life with their charisma and talent. 2: The Fifteenth Doctor brought a new energy to the Doctor Who franchise, captivating audiences with his charm and wit. The Ghoul in Fallout was a menacing presence, adding a dark and gritty element to the show. Jack Reacher was a tough and resourceful hero, while The Penguin became a complex and intriguing villain. Lord Yoshii Toranaga was a powerful and commanding figure, adding depth to the historical drama of Shogun.

Best Female TV Character

The female TV characters of 2024 were equally impressive, with witches, survivors, and mystical twins stealing the show. Kathryn Hahn as Agatha Harkness in Agatha All Along, Ella Purnell as Lucy MacLean in Fallout, Cristin Milioti as Sofia Falcone in The Penguin, Anna Sawai as Toda Mariko in Shogun, and Amandla Stenberg as Osha and Mae in Star Wars: The Acolyte all left a lasting impression. 2: Agatha Harkness was a powerful and mysterious witch, adding a touch of magic to the Marvel universe. Lucy MacLean was a resilient survivor, facing the challenges of a post-apocalyptic world with courage. Sofia Falcone was a complex and cunning villain, adding depth to the Penguin's story. Toda Mariko was a strong and independent character, representing the spirit of feudal Japan. Osha and Mae in Star Wars: The Acolyte were a dynamic duo, bringing a unique perspective to the Star Wars universe.

Best TV Scene Stealer

Some characters may not have been the main focus of their shows, but they stole every scene they were in. Basil in Star Wars: The Acolyte, Cody Lightning as Biscuits in Echo, Tadanobu Asano as Kashigi Yabushige in Shogun, Jennifer Hale as Madelyne Pryor in X-Men '97, and Aubrey Plaza as Rio Vidal in Agatha All Along all had that special something that made them stand out. 2: Basil added a touch of humor and charm to Star Wars: The Acolyte, becoming a fan favorite. Biscuits in Echo was a loyal and endearing sidekick, adding heart to the show. Kashigi Yabushige was a mysterious and intriguing character, adding depth to the story of Shogun. Madelyne Pryor in X-Men '97 was a powerful and complex character, adding a new dimension to the X-Men universe. Rio Vidal in Agatha All Along was a captivating and unpredictable character, stealing the show with her wit and charm.

Best TV Villain

Television wouldn't be complete without a villain, and 2024 delivered some of the best. Theo James as Bastian in X-Men '97, Aubrey Plaza as Death in Agatha All Along, Antony Starr as Homelander in The Boys, Cristin Milioti as Sofia Gigante (née Falcone) in The Penguin, and Manny Jacinto as Qimir / The Stranger in Star Wars: The Acolyte all brought their villainous personas to life with style. 2: Bastian was a mysterious and dangerous villain, adding a new level of intrigue to the X-Men universe. Death was a powerful and imposing force, adding a dark and macabre element to Agatha All Along. Homelander was a terrifying and corrupt hero, representing the darker side of society. Sofia Gigante was a cunning and ruthless villain, adding a new dimension to the Penguin's story. Qimir / The Stranger was a mysterious and menacing character, adding a sense of mystery to Star Wars: The Acolyte.