How to Invest in Cryptocurrency

Author: James Page

Estimated read time: 4 minutes

Publication date: 26th Jan 2021 12:34 GMT+1

In some cases, to say that cryptocurrency has never been in a better position to win the global market might be too risky and far-fetched but this year has certainly been one of the best for the crypto market.

We’ve seen Bitcoin breaking its all-time high record, a number of individuals and companies investing in cryptocurrency, and a growing interest in both hedging and decentralized finance. All this has opened new possibilities and use cases for cryptocurrency and has led to a major spike in their prices.

If this was enough to grab your attention, keep reading our step-by-step guide to find out where to start with crypto investing.


How to Invest in Crypto: A Step-By-Step Guide

Choose a Cryptocurrency 

It’s been nearly twelve years since Bitcoin first emerged on the market in January 2009. In the following years, Bitcoin’s success has encouraged developers to launch their own crypto projects and leverage the potential of blockchain technology. 

Today, you can choose from over 1,000 different assets, depending on what floats your boat. The value of a cryptocurrency relies on it having a clear purpose and obvious use cases.

For example, you can opt for prominent cryptocurrencies like Bitcoin (BTC) and Litecoin (LTC), hold onto them or use them to purchase goods and services. If you believe that decentralized finance (DeFi) is the future, you can invest in DeFi tokens like Ethereum (ETH), LINK, YVI, or AAVE instead. There are also currencies like Monero (XMR) and ZCash (ZEC) that focus on privacy and user anonymity, digital advertising tokens like Basic Attention Token (BAT), social tokens, etc. 


Make an Investment Plan

Before you engage in crypto investing for the first time, we suggest taking the time to jot down some rules and strategies to avoid getting carried away. For example, calculate how much money you can afford to lose and try not to spend more than that. Dedicate some time to observe the market, identify recurring trends and movements, and subscribe to crypto portals to stay up to date with the latest market news.


Find the Right Crypto Exchange 

There are numerous things to keep in mind when choosing a suitable cryptocurrency exchange. More info about this case you can find here.

First of all, the exchange should be available in your place of residence and offer the cryptocurrency you want to purchase. Since this is your first investment, you should look for fiat gateways that let you buy crypto in exchange for your local currency (e.g. USD, EUR, GBP, CAD, etc). This way you can avoid the conversion fee added on top of the existing trading and deposit fees. 

Before you make your final choice, don’t forget to check the platform’s security features, support team responsiveness, and verification procedures. Most platforms require new users to perform a KYC check and provide an ID to verify their identity. If you’re not comfortable with that, look for non-custodial crypto exchange, as most of them are KYC-free.


Store Your Coins

Once your account has been verified, you’re ready to buy some crypto. The platform will ask you to provide a wallet address unless it’s a custodial exchange in which case you can store your coins in the platform’s own crypto wallet. Although online wallets are safe enough if you want to store your funds temporarily, we advise you to keep your long-term investments in a hardware wallet instead. 


Why Invest In Cryptocurrency?

With a market capitalization of over $500 billion, it’s more than clear that cryptocurrencies are an extremely lucrative investment. 

The growth in market participants has turned cryptocurrencies into high-liquidity assets, meaning you can easily buy/sell them in exchange for cash. Contrary to stocks or real estate, digital currencies have low entry thresholds, and you can spend as little as $100 on your first crypto investment. 

You don’t have to be a tech whiz to capitalize on cryptocurrency. You just need a clear head, patience, and proper risk management. 


Disclaimer: The writer is an experienced financial consultant who writes for The observations he makes are his own and are not intended as investment or trading advice.