A number of friends have been asking us how to buy crypto assets. This is not the first time we’ve gotten this question and it won’t be the last.
When I first started getting this question, my answer was “open a Coinbase account and buy Bitcoin.”
Then there was a period when my answer was “open a Coinbase account and buy Bitcoin and Ethereum.”
Today, my answer is “open a Coinbase account and buy a diverse set of crypto assets.”
A diverse set of crypto assets would include Bitcoin, Ethereum, the other major layer one blockchains (Solana, Flow, Avalanche, Polkadot, Algorand, etc), the major Defi protocols (Uniswap, Aave, Compound, etc), storage protocols (Filecoin, Arweave, etc), telecommunications protocols (like Helium), some layer two protocols (like Stacks, Polygon, etc), some gaming assets (like Axie, Decentraland, etc), a maybe some NFTs.
That last paragraph is not meant to be specific. It is meant to be illustrative. And that list contains assets that I own and USV owns as well as many assets that I and USV do not own. I am not recommending any specific assets here. I am recommending a diverse portfolio and those are some good examples of what might be in one.
I do not believe the web3/crypto opportunity can be captured by simply holding Bitcoin and Ethereum anymore. You must own a broader set of assets because the market is expanding beyond the OGs now and you need to be exposed to more of it.
I believe there will be index funds that can do this for you someday. But today your options are limited unless you have the wealth and access to the premier token funds and that is hard to achieve.
Finally, I have no idea where we are in this bull cycle we are in (that is leading to so many people asking us this question right now), so I would be conservative and dollar cost into crypto. If you want to put $10,000 into crypto, I would put $1,000 a month each month for the next ten months, for example. It is hard to be patient like that when prices are rising so fast, but they can fall even faster so it is best to be careful and conservative with an asset class like this.
Finally, these are very long-term investments. If you want to buy crypto assets, you should think of them as a ten-year buy-and-hold portfolio (or longer). That will help you make better decisions as you invest in this exciting new asset class.
I wrote this mostly to send to friends who ask but figured I’d share it with everyone else too. Good luck, be careful, be patient, and have a long-term view when investing in high-risk assets.