Coins: 15,124
Exchanges: 1,146
Market Cap: $2.631T 0.7%
24h Vol: $196.746B
Gas: 25.854 GWEI
Go Ad-free
Sponsored Content
TABLE OF CONTENTS

How to Start Investing in Cryptocurrency

4.3
| by
CoinGecko
-

eToro is a publishing partner of CoinGecko

The words “Bitcoin” and “cryptocurrency” have been uttered a lot in the media recently. In early 2021, Tesla bought $1.5 billion in bitcoin and is accepting bitcoin as one of the methods of payment. Its CEO, Elon Musk, has been known to support cryptocurrency and indeed, his investment has helped push up the price of crypto.

This kind of news on mainstream media has increased our awareness about cryptocurrency. So what is it really and should we all start investing in cryptocurrency while it’s hot?

Cryptocurrency 101

A cryptocurrency is a digital currency that is based on blockchain technology and secured by cryptography. This digital asset is distributed across a large network of computers so it is not under the control of central authorities or any single institution. This decentralized system is one of the factors that attract people to support and invest in crypto. Eliminating the middleman such as banks meant that buyers and sellers can perform transactions directly with lower fees. 

Furthermore, it is assumed that the fall of the dollar imperium will inevitably happen and so some people want to hedge their net worth by investing in cryptocurrency. Each cryptocurrency project has a social vision behind it and that is also a factor that encourages people to keep investing in crypto.

How to Start Investing in Crypto

It can be daunting to invest in crypto when it is known to be volatile and risky. But with the right information and preparation, you can start investing in crypto with ease.

First thing’s first—know the basics

Read up on everything you can about cryptocurrency including the blockchain technology that supports it. Since bitcoin is essentially the pioneer of cryptocurrency, it’s good to understand its value proposition and keep updated with its price fluctuations. This is because the price of bitcoin will affect the price of other cryptocurrencies. It’s also worth knowing what bitcoin and cryptocurrency miners do and how mining works. Without miners who solve cryptographic problems, crypto transactions can hardly be performed.

Allocate a small percentage into cryptocurrency

Typically, you would probably start investing in cryptocurrency once you have experience in other types of investment. You would most likely already have an investment portfolio so all you need to do is reassess your goals. Then, you may want to decide to allocate a small percentage of your existing investment portfolio into cryptocurrency. However, you need to understand that investing in crypto isn’t the same as that in stocks. It’s more like investing in gold where you’re not paid any interest or dividends.

Choose your cryptocurrency

Bitcoin isn’t the only cryptocurrency available; there are hundreds more. The main reason we’re hearing more about bitcoin is that its market cap is the highest. The next in line are Ethereum, Ripple, Zcash, and Dash. High market cap cryptos are usually considered reliable or stable. Therefore, most investors would err on the side of caution and invest in those cryptos. Choosing a cryptocurrency should be based on factors such as your risk appetite and the project you’re interested in. If you’re willing to invest in lesser-known cryptos, remember that many have flatlined and your investment could go to zero.

Choose a platform to buy crypto

To invest in crypto, you would need to hop onto a crypto exchange platform because you can’t get them on the usual financial platforms like banks and brokerage firms. There are two types of crypto exchanges: fiat-to-crypto (lets you exchange a fiat currency to cryptocurrency) and crypto-to-crypto (exchanging between different cryptocurrencies). Notable exchanges include Coinbase, Binance, Coindesk, eToro and Kraken. On these exchanges you may expect to pay a fee and may only be limited to buying, holding, and selling cryptos.

Storing your cryptocurrency

To own your crypto funds and prove that you own the digital assets, you would need a digital wallet. This digital wallet or better known as crypto wallet contains public and private keys. The public key identifies a certain cryptocurrency and the private key authenticates a transaction. Consider your crypto wallet like the key to the blockchain car. Without those keys, you can’t get in and the car won’t run. So if you lose your crypto wallet, you lose access to your cryptocurrencies.

There are different types of crypto wallets to choose from depending on your preference and convenience.

Hot wallet

A hot wallet keeps your crypto in a device connected to the internet. This could be on your desktop, mobile or online where you can have quick access to your crypto assets. On the flip side, you may be easily exposed to cybercrime.

Cold wallet

This type of wallet stores your cryptos offline. This makes it more secured for longer-term storage and since it’s not connected to the internet, it’s unlikely to get hacked. However, you may lose your crypto if you lose your cold wallet, which is usually a type of hardware such as a USB device.

Know what you’re investing in

Like any other investment, you would need to do your own research and understand the project well enough. This is so that you know what you’re getting into and avoid scam projects. Learn the basics, choose your cryptos, get on a crypto exchange, and have your wallet ready to start investing in crypto. 

eToro is a publishing partner of CoinGecko

eToro USA LLC; Investments are subject to market risk, including the possible loss of principal. 

CoinGecko's Content Editorial Guidelines
CoinGecko’s content aims to demystify the crypto industry. While certain posts you see may be sponsored, we strive to uphold the highest standards of editorial quality and integrity, and do not publish any content that has not been vetted by our editors.
Learn more
Want to be the first to know about upcoming airdrops?
Subscribe to the CoinGecko Daily Newsletter!
Join 600,000+ crypto enthusiasts, traders, and degens in getting the latest crypto news, articles, videos, and reports by subscribing to our FREE newsletter.
Tell us how much you like this article!
Vote count: 4
CoinGecko
CoinGecko
CoinGecko's editorial team comprises writers, editors, research analysts and cryptocurrency industry experts. We produce and update our articles regularly to provide the most complete, accurate and helpful information on all things cryptocurrencies. Follow the author on Twitter @coingecko

More Articles

Select Currency
Suggested Currencies
USD
US Dollar
IDR
Indonesian Rupiah
TWD
New Taiwan Dollar
EUR
Euro
KRW
South Korean Won
JPY
Japanese Yen
RUB
Russian Ruble
CNY
Chinese Yuan
Fiat Currencies
AED
United Arab Emirates Dirham
ARS
Argentine Peso
AUD
Australian Dollar
BDT
Bangladeshi Taka
BHD
Bahraini Dinar
BMD
Bermudian Dollar
BRL
Brazil Real
CAD
Canadian Dollar
CHF
Swiss Franc
CLP
Chilean Peso
CZK
Czech Koruna
DKK
Danish Krone
GBP
British Pound Sterling
GEL
Georgian Lari
HKD
Hong Kong Dollar
HUF
Hungarian Forint
ILS
Israeli New Shekel
INR
Indian Rupee
KWD
Kuwaiti Dinar
LKR
Sri Lankan Rupee
MMK
Burmese Kyat
MXN
Mexican Peso
MYR
Malaysian Ringgit
NGN
Nigerian Naira
NOK
Norwegian Krone
NZD
New Zealand Dollar
PHP
Philippine Peso
PKR
Pakistani Rupee
PLN
Polish Zloty
SAR
Saudi Riyal
SEK
Swedish Krona
SGD
Singapore Dollar
THB
Thai Baht
TRY
Turkish Lira
UAH
Ukrainian hryvnia
VEF
Venezuelan bolívar fuerte
VND
Vietnamese đồng
ZAR
South African Rand
XDR
IMF Special Drawing Rights
Cryptocurrencies
BTC
Bitcoin
ETH
Ether
LTC
Litecoin
BCH
Bitcoin Cash
BNB
Binance Coin
EOS
EOS
XRP
XRP
XLM
Lumens
LINK
Chainlink
DOT
Polkadot
YFI
Yearn.finance
Bitcoin Units
BITS
Bits
SATS
Satoshi
Commodities
XAG
Silver - Troy Ounce
XAU
Gold - Troy Ounce
Select Language
Popular Languages
EN
English
RU
Русский
DE
Deutsch
PL
język polski
ES
Español
VI
Tiếng việt
FR
Français
PT
Português
All Languages
AR
العربية
BG
български
CS
čeština
DA
dansk
EL
Ελληνικά
FI
suomen kieli
HE
עִבְרִית
HI
हिंदी
HR
hrvatski
HU
Magyar nyelv
ID
Bahasa Indonesia
IT
Italiano
JA
日本語
KO
한국어
LT
lietuvių kalba
NL
Nederlands
NO
norsk
RO
Limba română
SK
slovenský jazyk
SL
slovenski jezik
SV
Svenska
TH
ภาษาไทย
TR
Türkçe
UK
украї́нська мо́ва
ZH
简体中文
ZH-TW
繁體中文
Log in
By continuing, you agree to CoinGecko Terms of Service and acknowledge you’ve read our Privacy Policy
or
Forgot your password?
Didn't receive confirmation instructions?
Resend confirmation instructions
Sign up
By continuing, you agree to CoinGecko Terms of Service and acknowledge you’ve read our Privacy Policy
or
Password must contain at least 8 characters including 1 uppercase letter, 1 lowercase letter, 1 number, and 1 special character
Didn't receive confirmation instructions?
Resend confirmation instructions
Forgot your password?
You will receive an email with instructions on how to reset your password in a few minutes.
Resend confirmation instructions
You will receive an email with instructions for how to confirm your email address in a few minutes.
Get the CoinGecko app.
Scan this QR code to download the app now App QR Code Or check it out in the app stores
coingecko
Continue in app
Track prices in real-time
Open App
Join us at our first hybrid conference on 11 Nov 2024. Secure your spot now before tickets sell out!