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I'm not sure if this is the right place to ask but I figured I'd post here since it's for questions about Money and Investing.

Lately I've been looking at cryptocurrencies and I want to speculate with some money. Does anyone have any recommendations on how much to speculate with and where to do it?

EDIT: I've looked at IOTA and Ravencoin. I am also Interested in mining but I think this is the wrong forum for mining questions. My goal would be to make some extra money and/or buy more coins.

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    What are your goals? What specific currencies are you looking at? Why to do you want to invest in cryptocurrencies? – Nosjack Oct 30 at 19:37
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    Why those two? Step one, do not pretend these things are currency. What the hell is a RavenCoin? I have invested in crypto, I have mined, I'm not just some disbelieving skeptic, but you will get eaten alive if you believe the perma-optimism of the snake-oil salesmen. – quid Oct 30 at 20:34
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    Product/service recommendation questions are off-topic. Sorry. – Chris W. Rea Oct 30 at 23:15
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    My recommendation would be to risk zero dollars in crypto currencies. If you hate money there are better ways to get rid of it. – Pete B. Oct 31 at 12:09
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    @PeteB. anything with any type of return has an associated risk. The whole point is for the risk-adjusted returns to be worth it. I don't see the need for such extreme negativity. – Leon Oct 31 at 13:47
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But lately I've been looking at Cryptocurrencies and I want to Invest some Money into it. Does Anyone have any recommendations on how much to Invest and where. Really any advice is appreciated.

Yes.

I have always said that to invest in gold, the best choice is a gold mine. Or, a mining equipment manufacturer.

To invest in cryptocurrencies, there are two options:

  • Create your own cryptocurrency mine, and start mining the cryptocurrencies, generating a profit. However, this is profitable only if you have the latest and greatest mining equipment and live in an area where electricity prices and taxes are low.
  • Or if you don't want to use a LOT of electricity and generate a LOT of heat, invest in cryptocurrency mining equipment manufacturers. In this case, the investment probably would be NVIDIA stocks as their GPUs are used a lot for mining. However, ASIC mining companies are appearing and may mean someday GPU mining will no longer be profitable.

The third option, buying cryptocurrencies is not investing at all. It is speculating. Apart from mining, there is no inherent return mechanism in cryptocurrencies. Unlike traditional currencies which yield interest, cryptocurrencies don't have such a mechanism.

Don't speculate. Invest!

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    Agree— betting on crypto is akin to gambling. If you want to invest then look into index funds. – Dugan Oct 30 at 21:14
  • Except that there is a burgeoning wealth of fin-tech companies offering (legit) financial instruments to yield interest from cryptocurrency, not to mentioned protocols where interest is yielded when using your stake to secure the network. – Leon Oct 31 at 13:21
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    This advice really doesn't make much sense. Investing in mining is just another way to make money if cryptocurrencies go up in value and lose money if they go down in value. It just has a lot of extra risk (because there's lots of other reasons mining can fail such as increased mining activities and inability to get out quickly because mining operations aren't liquid). So why would you condemn speculating on cryptocurrencies and advise the, strictly worse in literally every way, strategy of investing in mining operations? – David Schwartz Nov 2 at 4:41
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recommendations on how much to Invest

No more than what you're willing and able to completely lose. The value will heavily sway on people's confidence that it'll be useful/valuable in the future so having a significant chunk of the value you put into it completely tank isn't out of the question.

and where

An exchange. Coinbase is the simplest US-based exchange. There are many.

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First off, given your research, or lack thereof, thus far, you seem to be aiming to speculate on a coin price fluctuating. Given that margin trading and/or future contracts are commonly offered with up to 125x leverage, you can go short/long the highest market cap coin on leverage and achieve significant returns if your aim is indeed speculating/day-trading, without the added manipulation in prices that lower-cap coins are rife with.

HINT Chances are you WILL fail if you head into that with non-existing experience and no specific mentality to back it up in less wild markets than the still unregulated and at times manipulated, nascent crypto-market.

Then there is investing in crypto, where you should note that regardless of the nay-sayers here, there is absolutely a place in an investment portfolio for crypto, albeit a small one, especially if you re risk-aversive. Focus on large market caps, preferably THE largest market caps with a distinct purpose, aka Ethereum & Bitcoin since those are the most likely survivors even if things go awry. Returns of such assets, like crypto, are enough to make a meaningful impact even on small allocations, while a market failure won't hurt since the allocation was small, to begin with.

Then you can utilize a plethora of financial services to gain returns in kind, even if the assets themselves do not appreciate. These can be a centralized margin loan provider like BlockFi or Nexo or a decentralized one like Maker / Compound or lending directly on well-known exchanges like Binance.

If you feel like taking additional risks, then you can also have a look here for Proof-of-Stake crypto. Owning a stake/amount of those allows you to use that to take part in securing the network/validating transactions and get a yield based on the protocol's inflation. Again, you should practice extreme caution and thoughtful research if choosing to go this route. Ultimately the $ denominated value of the underlying asset is what will matter so that a wrong choice will again leave you with worthless tokens in the end(even if its a higher amount of those than you started with).

To sum up, you need to fix your mindset, get away from get rich quick schemes and play for the long run as it seems for the time being you re being impatient and want to make it big with crypto where the real (boring) answer would be to get your investment portfolio in order with crypto being a small disciplined portion of it.

  • Feel free to inform me on the downvote(s) you give so I can improve the quality of this answer. – Leon Nov 1 at 6:51
  • I'm not the one who downvoted, but I'll leave a comment nevertheless. Cryptocurrencies usually don't have mechanism for yielding risk-free interest. Forest grows, bonds yield interest, real estate yields rent, art (in a museum) yields ticket fees, stocks yield dividend, but cryptocurrencies, like gold, don't yield. As you said, crypto has high risk. Usually it makes sense to take the risk where the reward is large, i.e. stocks. If cryptocurrencies were stable, in today's world they could be part of a bond portfolio as bonds at least in Europe have a negative yield. But they aren't stable. – juhist Nov 1 at 16:11
  • @juhist Everything is a trade-off between risk and reward, and nothing is ultimately risk-free. Forests burn, companies/countries can default on bonds, real estate especially if leveraged as usual can create capital C crises, so on and so forth. Exactly because I recognize crypto isn't a stable regulated big volume market, not just yet that is, is why I talk about it as a structured small part of someone's portfolio. – Leon Nov 4 at 6:09

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