Millions of traders worldwide have already turned to cryptocurrency to set off or expand their portfolios. Crypto is a highly appealing option for new and experienced traders alike due to its wide variety, robust security, and abundance of real-world use cases. 

However, cryptocurrency investing is a daunting task for many, as this digital currency has a reputation for being highly complex and volatile. But this mustn’t discourage you! If you want to purchase cryptocurrency to diversify your portfolio, make fast international transactions, or potentially make a long-term profit, then you should not have any obstacles in your way.

In this article, we’ll provide a simple step-by-step guide on how to invest in cryptocurrency. This guide is suitable for all kinds of traders but is tailored towards those who are completely new to the world of crypto. We’ll also discuss what cryptocurrency actually is and give examples of popular coins you can trade right now. So, if you’re ready to embark on your trading adventure, let’s get started! 

What Is Cryptocurrency?

Cryptocurrency is a type of digital asset that utilises cryptography for secure financial transactions. Unlike traditional currencies that we’re familiar with, such as pounds, euros, and dollars, cryptocurrency only exists in an electronic form. It relies on decentralised blockchain technology and doesn’t have any issuing or regulating authority. 

Instead, crypto coins are generated through a process called mining. Mining is an extremely energy-intensive technological process that involves the verification of transactions on the blockchain. Put simply, miners must solve a complex mathematical puzzle to be rewarded with a new coin. 

After the mining process is complete, coins join a distributed ledger. In this system, rather than a single financial intermediary having a ‘master copy’ of the ledger, every individual who’s part of the system has their own copy. Therefore, when a new transaction is made, all copies on the ledger are updated. This prevents the falsification of transactions, which is a key advantage crypto has over other currencies.   

This transparency and security is one of the many reasons why crypto investing has become so popular. Traders can make fast and pseudonymous transactions without relying on third parties or financial intermediaries such as banks. 

Furthermore, the sheer variation of cryptocurrency is a key selling point of this asset. Traders are able to establish a fully diverse and balanced portfolio from their crypto holdings, allowing them to make a stable profit over time. There are currently thousands of crypto coins to choose from, with more coming into circulation every day. So, when investing in cryptocurrency, you’ll have no shortage of interesting assets to choose from!  

How to Invest in Cryptocurrency (Step-By-Step Guide) 

If you want to invest in cryptocurrency and begin building up your portfolio, then look no further! In this 3-step guide, we’ll show you the best way to become a crypto trader. Before you know it, you’ll be ready to face the crypto market and reap the benefits of this fascinating asset. So, let’s begin!

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1) Choose an Exchange or Brokerage

To start with, you must decide whether you want to invest in cryptocurrency through a crypto exchange or a brokerage. Both of these options have their own benefits, so the best one for you entirely depends on factors such as your experience level, preferences, and confidence as a trader. 

Exchanges

A cryptocurrency exchange, similar to a stock market exchange, allows users to buy, sell, and trade various digital assets. You can typically use a crypto exchange through your phone or desktop device, allowing you to manage your portfolio on the go. 

Crypto exchanges usually charge users a fee for each transaction, but this varies between companies. Some exchanges, such as Coinbase, even offer various tools and security features to enhance the user’s trading experience.
However, with crypto exchanges, users will receive little-to-no guidance or additional help. They will be left on their own to manage their portfolio and navigate the cryptocurrency market alone. Due to this, crypto exchanges are best suited for more experienced users and those who don’t require assistance when trading. 

Brokerages 

Crypto brokerages, on the other hand, are perfectly suitable for traders of all experience levels, especially first-timers. These brokers are there to help you advance your skills and develop more confidence as you learn the ins and outs of the crypto space. Many brokers offer a range of tools and resources that will significantly aid you along your journey, making them the ideal option for inexperienced traders.
To find a crypto broker that can best assist you and tailor their services to your preferences, we suggest joining a brokerage-matching platform. A website such as Bitcoin 360 AI will automatically connect you with a compatible broker, saving you time and eliminating the hassle of finding one alone. 

Once you’ve chosen either an exchange or a brokerage, you’ll need to create an account and make a deposit. After this, you’ll be ready to move on to the next (and most exciting) stage. 

2) Choose Coins To Invest In 

Yes, that’s right – your next step is to decide which coins you want to buy! As we’ve said, there are plenty of exciting cryptocurrencies to invest in, and often, the hardest part is narrowing all your options down to just a handful. To streamline this process, we recommend heading to a crypto marketplace to see a comprehensive list of all available coins. After that, you can plan out which type of coins you want to trade.

Cryptocurrencies fall into several categories, which reflect their main purpose and use cases. For example, stablecoins have their value pegged to that of another asset, such as fiat currency. The main purpose of stablecoins is to be used as a medium of exchange since they’re less volatile than other cryptocurrencies. 

Other types of crypto coins and tokens include governance tokens, security tokens, privacy coins, NFTs, DeFi tokens, and meme coins.

Here is a selection of the most popular crypto assets that you can add to your portfolio as a beginner trader: 

• Bitcoin (BTC)
• Ethereum (ETH)
• BNB (BNB)
• XRP (XRP)
• Cardano (ADA)
• Tether (USDT)
• Dogecoin (DOGE)
• TRON (TRX)
• Polkadot (DOT) 
• Solana (SOL) 

Many experts recommend that traders invest in between 3 and 9 different cryptocurrencies to mitigate risk and optimise their potential for high returns. It’s also a good idea to balance your portfolio with a mix of coins with varying market caps, use cases, and value. 

3) Start Trading Crypto 

Now that you know which cryptocurrencies you want to trade, it’s time to buy them! If you have opted to use a brokerage to help you out, then you can turn to them to help you make your first investments. Otherwise, we recommend referring to reputable news sources to see the current state of the markets and plan your trades accordingly. Good luck! 

Final Thoughts

All in all, diving into the world of crypto investments provides unmatched opportunities for success as a trader. Even if you’re new to trading, after reading this article, you have enough knowledge to help you take your first steps. All you need to do is find a suitable exchange or brokerage, create an account, and choose coins to invest in. It really is as simple as that! After this, you’re free to plan out your portfolio and unlock all the benefits of cryptocurrency. 

Our final advice to you is to remember to create a diversified portfolio, never invest more than you’re willing to lose, and always do plenty of research before buying cryptocurrency. Now, what are you waiting for? The world of cryptocurrency eagerly awaits you!