In 2017, you might have read about the Bitcoin boom where prices shoot up from USD 900 to USD 20,000 and the crash in 2018. I know, it seems a bit late to jump into the blockchain, crypto currency bandwagon. But after doing periodic research from 2018 to 2020 and seeing how central governments are moving to unlimited QE or printing money to push up the economy. It makes me feel that there is potential for crypto currency to appreciate in the future and its good to explore alternatives as the world’s fiat could potentially go into hyperinflation.
With that, I started to ask deeper questions which I would like to share in this post. Please feel free to add on or share your thoughts with me.
What is cryptocurrency ?
According to wikipedia, cryptocurrency is a digital asset that is used as a medium of exchange wherein individual digital token coin ownership records are stored in a digital ledger. The technology is mainly builded upon an open source software and typically supports decentralized control versus existing currency or fiat currencies are backed up by the country issuing them and its centralized via the monetary systems of the country.
If you look closer, fiat currencies are legal tender and recognised by the law. Here’s a definition from MAS about Singapore legal tender. Currency notes and coins issued by MAS are legal tender in Singapore. As legal tender, they are recognised by law to be valid means of payment.
Watch this video – https://www.youtube.com/watch?v=2GqpTkEOuKM
TL:DR – Cryptocurrency Basics, What do you need to start investing in Cryptocurrency?
- Ensure you have spare cash flow or are looking for alternative investment vehicles. Cryptocurrency is highly volatile and speculative.
- Determine which coin / currency you like to support or invest in.
- Select an exchange where you could buy or would you like to mine crypto currency (highly unprofitable now)
- Determine your wallet solution, would you use the exchanges wallet or a harder wallet like an offline ledger.
- Would you pledge your coins in exchange for interest in new services like Celsius.network or BlockFi or Coinbase.
Types of cryptocurrency in the World
There are 3,000 cryptocurrencies in the world, I will cover a few popular ones or at least those that have traction. Do note in 2017, 2018 there was a ICO boom where many people created altcoins and made them for initial coin offerings like an IPO. This was highly speculative and many got burnt during this period. So beware when you are exploring to invest in crypto.
- Bitcoin – Most popular and valued cryptocurrency. It is known as the granddaddy of the crypto world and widely used as payment options for several businesses worldwide.
- Ether – Commonly known as ETH or Ether is the cryptocurrency that’s used in the Ethereum blockchain which is the world’s programmable blockchain and widely used in businesses or other blockchain projects.
- Litecoin – a peer-to-peer Internet currency that enables instant, near-zero cost payments to anyone in the world. Litecoin is an open source, global payment network that is fully decentralized without any central authorities. .
- Stable Coins – are cryptocurrency that is pegged or backed by actual currency. This is to help ensure stability of the currency. See wiki description
- Types of stable coins
- USD Coin (USDC) is pegged to USD. 1 USD Coin = US$1 from Coinbase
- USD₮ is similar to USDC but its a stable coin from the company Tether which has real assets backing their coin as well.
- TUSD, similar USD backed crypto currency from TrueUSD which you can check out as well.
- Types of stable coins
- Tether Gold (Gold) – a digital asset that is backed with gold. It’s offered by TG Commodities Limited. One full XAUt token represents one troy fine ounce of gold on a London Good Delivery bar. The XAUt token can be transferred to any on-chain address from the purchasers’ Tether wallet where it is issued after purchase. Specific gold bar(s) will be associated with each on-chain address where Tether Gold is held.
What is a crypto wallet and types of wallet?
Watch this YouTube video about the types of wallets
I normally have 3 types of wallets, 1 is the exchange, mobile wallets like Guarda and a third is an offline ledger wallet (safest) and where you want to keep most of your money in. Lately I am trying this wallet XAPO as well but have yet to get the time to do up my KYC.
Where and how to buy cryptocurrency in SIngapore?
When I first explored cryptocurrency in 2017, my initial finding was the technology is too early for widespread adoption. It wasn’t easy for me to deposit money to buy bitcoin, how can the masses adopt it. Fast forward 3 years, its now a lot easier to deposit money to purchase or sell and extract out your profits from bitcoin.
Here’s a list of platforms that you can explore
- Coinbase.com – a leading US based crypto exchange which allows you to buy many types of cryptocurrency via credit card, fees @ 3.99%
- CoinHako.com – a Singapore based exchange, which allows fund transfer for Singaporeans to purchase crypto on their platform. You can buy in SGD, but its based on their spread.
- Binance.com – one of the world’s largest crypto exchange by daily trading volume, soft-launched Binance Singapore, enabling users in Singapore to purchase and sell crypto assets like bitcoin using the Singaporean dollar (SGD) through FAST, better known as Fast and Secure Transfers electronic funds transfer system. source
- Crypto.com – offers a MCO visa card with cashback paid in cryptocurrency. You are able to transact and make fiat purchases with the card. You can also purchase crypto currency on the platform. If you deposit your cryptocurrency on the platform, you can earn interest if you pledge it as well.
- FYB-SG – used them before in 2018, high spread as there wasn’t any option then but they have since stop operations.
Transferring Money to Buy
Most of these platforms allow you to use a credit card to make a purchase but transaction fees might be high, exchanges like coinhako or Binance have bank transfer options in SGD.
How to Sell My Crypto in Singapore?
Another barrier for me to buy crypto was how could I sell and convert my cryptocurrency into fiat / money. After solving the barrier to purchase crypto, I decided just to let my crypto investment grow and stay as crypto, more of a hedge against inflation that we will see in the fiat system.
But if you like to convert crypto back to fiat, you could use coinhako which has the option to transfer money to your account in Singapore. They are not linking up with Singpass and once verified the withdrawal limits are higher than what it used to be. So it might take awhile if you have a lot of cryptocurrency. In the past there was this service xfers.com which also allows bank transfer but I haven’t used them much lately so I wouldn’t comment too much.
I hope this was useful for you, my venture to crypto hasn’t been that promising since I started, but I still keep it and occasionally buy in to average out my cost as I view crypto as an alternative hedge against other asset classes. You never know when bitcoin because 50k, as of writing BTC is valued at 9k+ USD and the halfing of mining rewards is around the corner. This will reduce new bitcoin supply therefore increasing prices.
Chat with me – Do feel free to drop me a comment or email if you like to exchange ideas on cryptocurrency investing especially as a Singaporean where it’s so much harder.
Fun Facts & Reading
How does Bitcoin actually work?
Watch this video sharing the ins and outs of bitcoin. In depth video on how bitcoin and cryptocurrency works, very insightful, geeky stuff
Why do we need to verify our identity or KYC?
Most exchanges or wallets would require verification in order to comply with relevant anti-money laundering (AML) and counter terrorism financing (CTF) laws and regulations.
Did you know you could earn a high interest rate on your cryptocurrency?
Recently, there have been a few companies looking to disrupt the finance industry by offering high interest rates on your cryptocurrency when you deposit it in their system. The interest rate can be as high as 8% p.a. Way higher than what we have in the normal POSB or local banks.
You can visit Celsius.network, Coinbase, Crypto.com to explore potentially placing your cryptocurrency to earn some interest.
How many Bitcoins are there in the world?
The total number of bitcoins will converge to 21 million bitcoins in circulation. Bitcoins are traded not in whole numbers but can be transacted via decimal points as well.
Disclaimer: Some links on the articles include affiliate links which I will get rewarded if the requirements are met. Also I am not a financial advisor, all opinions are purely mine and are for sharing purposes only. Please consult a financial advisor or broker if you are looking to make any financial decision.
Update: 15 Feb 2021
Xfers transfer limits –
🔹The S$5,000 maximum personal e-wallet load capacity (the “Loading Limit”); and
🔹The S$30,000 maximum amount that can be transferred out of a personal e-wallet on a 12-month consecutive basis (the “Annual Spending Limit”).
This limits is set to comply with the Payment Services Act 2019, so do note the limits when looking to transfer funds.
Also if you are a Singaporean or working in Singapore, you can also register a Binance.sg account to get access to xfers to transfer out your crypto to your SG fiat wallet. Something to note, Binance.com and Binance.sg are different entities, so you need to register and verify yourself.
Update: 13 May 2021
Some other exchange you can explore, Gemini, Binance.sg, Liquid and Celsius.us that you can check out.