Cryptocurrency is a promising avenue for investing. The market is incredibly volatile, which can yield higher returns when done correctly. At the same time, the extreme volatility can lead to big losses fast.
Investing in cryptocurrency safely is paramount for successful investments. Ultimately, riding the waves of cryptocurrency investment bolsters and diversifies your investment profiles. There are several key strategies for mitigating the volatility of cryptocurrency.
Search results
Guide to Cryptocurrency
How to Buy Cryptocurrency
*Transacting in virtual currencies is subject to various risks, such as price volatility, and is therefore not suitable for everyone. Your capital is at risk.
How To Invest Into Crypto
Find your coin
Get $100,000 to practice your trading skills
Every new account on eToro is credited with $100,000 in a virtual
portfolio, so you can practice trading risk-free. Join eToro and discover how
simple and intuitive it is to trade, talk and own crypto. Access over 40
cryptocurrencies and crypto2crypto pairs. Get $50 when you sign up, and we will also.
What is Cryptocurrency?
Cryptocurrencies operate on blockchain technology. Decentralizing the financial operations of cryptocurrencies provides significant benefits including:
The reduced overhead cost associated with traditional financial institutions.
International transactions
No reliance on the federal reserves.
Direct coding of trading strategies ad loans via the cryptocurrency blockchains. Eliminates the need for financial intermediaries.
How Does Cryptocurrency Work?
The blockchain powers cryptocurrencies. Blockchain technology maintains a ledger for every cryptocurrency. You need a set of public and private keys to facilitate every cryptocurrency transaction. The keys operate like passwords, connecting with a crypto wallet and allowing you to send and receive cryptocurrency.
How to Invest
*Transacting in virtual currencies is subject to various risks, such as price volatility, and is therefore not suitable for everyone. Your capital is at risk.
There are several different ways to invest in cryptocurrency. Here are the most common ways for how to invest in cryptocurrency.
Direct Investment
You can directly invest in cryptocurrency, without a middleman. When investing directly, you hold cryptocurrencies in a digital wallet. You must use a specialized cryptocurrency exchange to do this. Some examples of crypto exchanges are:
To invest in cryptocurrency directly, you must understand base coins and altcoins.
Invest in Cryptocurrency Funds and Futures
Aside from investing directly, you can also invest in cryptocurrency funds and futures. Investing in funds and futures reduces the volatility of the investment. When you do this, you do not need to exchange fiat currencies for cryptocurrency. You also will not need to maintain a digital wallet. Investing in crypto funds and futures is like investing in stocks or mutual funds.
The crypto fund available is the Grayscale Bitcoin Trust (GBTC). This fund holds Bitcoin, but it does not track it 1-1. The GBTC is far less volatile than Bitcoin. However, you must pay a 2% management fee for GBTC. This management fee is far higher than the fee for most managed mutual funds.
Another option is Bitcoin Futures. Bitcoin Futures Contract from the Chicago Merchantile Exchange tracks Bitcoin 1-1. This option is ideal for holding futures short-term. However, it is not great for long-term investments since it expires and must be rolled into another contract. You do not need to rely on a cryptocurrency exchange with the BTC, and it s a reliable option with significant liquidity.
Invest in Cryptocurrency Companies
You can also invest in companies involved in cryptocurrencies. They power crypto mining, work to develop their cryptocurrencies, or create platforms that power cryptocurrencies. There are many companies with publicly traded stocks available to invest in. To invest in them, you use a stockbroker to buy shares in the company.
There are several different ways to invest in cryptocurrency. Here are the most common ways for how to invest in cryptocurrency.
Direct Investment
You can directly invest in cryptocurrency, without a middleman. When investing directly, you hold cryptocurrencies in a digital wallet. You must use a specialized cryptocurrency exchange to do this. Some examples of crypto exchanges are:
Robinhood
eToro
Coinbase
Binance
To invest in cryptocurrency directly, you must understand base coins and altcoins.
Base coins. You can purchase base coins directly with fiat currency. For example, if you use USD, you can buy the base coins with USD. You’ll likely need to pay a fee for exchanging the fiat currency for cryptocurrency.
Altcoins. You cannot purchase alt coins directly. Instead, you must exchange currency for base coins. Then, you can use the base coin to buy altcoins.
Invest in Cryptocurrency Funds and Futures
Aside from investing directly, you can also invest in cryptocurrency funds and futures. Investing in funds and futures reduces the volatility of the investment. When you do this, you do not need to exchange fiat currencies for cryptocurrency. You also will not need to maintain a digital wallet. Investing in crypto funds and futures is like investing in stocks or mutual funds.
The crypto fund available is the Grayscale Bitcoin Trust (GBTC). This fund holds Bitcoin, but it does not track it 1-1. The GBTC is far less volatile than Bitcoin. However, you must pay a 2% management fee for GBTC. This management fee is far higher than the fee for most managed mutual funds.
Another option is Bitcoin Futures. Bitcoin Futures Contract from the Chicago Merchantile Exchange tracks Bitcoin 1-1. This option is ideal for holding futures short-term. However, it is not great for long-term investments since it expires and must be rolled into another contract. You do not need to rely on a cryptocurrency exchange with the BTC, and it s a reliable option with significant liquidity.
Invest in Cryptocurrency Companies
You can also invest in companies involved in cryptocurrencies. They power crypto mining, work to develop their cryptocurrencies, or create platforms that power cryptocurrencies. There are many companies with publicly traded stocks available to invest in. To invest in them, you use a stockbroker to buy shares in the company.
NVDA, INTC, and AMD. These companies make micro-processes and supply crypto mining technologies. NDVA GPUs can be used to mine Bitcoin.
Mastercard and Visa. Both Visa and Mastercard facilitate digital cash, and both entered the crypto space. Visa partnered with Coinbase to issue debit cards for Coinbase wallets. Mastercard has done the same via a partnership with Bitpay.
Riot. Riot Blockchain is a small company. They create and support blockchains. However, the company does not produce revenue yet.
What Brokers are Available
Fortunately, you can choose between many options for crypto brokerages. Here are some of the most common brokers:
Robinhood
Robinhood supports some crypto coins and multiple altcoins. It provides easy-to-use applications to purchase crypto or stocks. Users do not need to pay commissions, but they must pay an order flow feed depending on the trade. Compared to other brokers, Robinhood has limited cryptocurrencies available. It’s only available to U.S. users, and you cannot withdraw crypto funds directly.
Binance
Binance is a jack-of-all-trades that includes advanced charting, custom API keys, robust security, address whitelisting, Two-factor authentication, free education platform, and one of the widest arrays of trade types on any exchange. Here is a quick list of just some of the trade options available: Limit order, Market order, Stop limit order, Stop market order, Trailing stop order, Margin trading. Binance partners with Trust Wallet, a leader in the digital wallet space with over five million users. Binance also charges much lower fees than most other exchanges and incentivizes high-volume traders with their fee structure. The higher the trading volume, the lower the fees become. Binance can lower your costs significantly. If you are an active trader, Binance just makes sense.
eToro
eToro provides forex products and social trading options with excellent features. It’s ideal for U.S.-based crypto traders, those who like to copy trading profiles, and people looking for a great community. However, only U.S. traders are allowed to buy cryptocurrency. eToro only offers 15 trading pairs.
Coinbase
Coinbase is an incredibly popular online crypto trading platform. It allows you to trade crypto for any other token the broker supports. With Coinbase, you can easily trade major cryptocurrency pairs. Additionally, you can earn rewards. Beware that Coinbase does not offer the lowest pricing or fees.
Coinbase is ideal for newer traders, those interested in major pairs, or those interested in a simple platform.
Robinhood
Robinhood supports some crypto coins and multiple altcoins. It provides easy-to-use applications to purchase crypto or stocks. Users do not need to pay commissions, but they must pay an order flow feed depending on the trade. Compared to other brokers, Robinhood has limited cryptocurrencies available. It’s only available to U.S. users, and you cannot withdraw crypto funds directly.
Binance
Binance is a jack-of-all-trades that includes advanced charting, custom API keys, robust security, address whitelisting, Two-factor authentication, free education platform, and one of the widest arrays of trade types on any exchange. Here is a quick list of just some of the trade options available: Limit order, Market order, Stop limit order, Stop market order, Trailing stop order, Margin trading. Binance partners with Trust Wallet, a leader in the digital wallet space with over five million users. Binance also charges much lower fees than most other exchanges and incentivizes high-volume traders with their fee structure. The higher the trading volume, the lower the fees become. Binance can lower your costs significantly. If you are an active trader, Binance just makes sense.
eToro
eToro provides forex products and social trading options with excellent features. It’s ideal for U.S.-based crypto traders, those who like to copy trading profiles, and people looking for a great community. However, only U.S. traders are allowed to buy cryptocurrency. eToro only offers 15 trading pairs.
Coinbase
Coinbase is an incredibly popular online crypto trading platform. It allows you to trade crypto for any other token the broker supports. With Coinbase, you can easily trade major cryptocurrency pairs. Additionally, you can earn rewards. Beware that Coinbase does not offer the lowest pricing or fees.
Coinbase is ideal for newer traders, those interested in major pairs, or those interested in a simple platform.
Robinhood supports some crypto coins and many altcoins. It's an easy-to-use platform for buying crypto and stocks. Users do not pay commissions, but they must pay an order flow feed depending on the trade. Robinhood has a limited amount of cryptocurrencies available, compared to its competitors that only focus on crypto. It’s only available to U.S. users, and you cannot withdraw crypto funds on the platform.
Best For
Social Copy Trading
Overall Rating
Learn More
Get Started
eToro USA LLC; Virtual currencies are highly volatile. Your capital is at risk.
Show Details
eToro provides social trading options with excellent features. It’s ideal for crypto trader who like to copy other users trading profiles. It's perfect for people that are looking for a trading community and don't mind being limited on the trading pairs.
Binance is a jack-of-all-trades that includes advanced charting, custom API keys, robust security, address whitelisting, Two-factor authentication, free education platform, and one of the widest arrays of trade types on any exchange. Here is a quick list of just some of the trade options available: Limit order, Market order, Stop limit order, Stop market order, Trailing stop order, Margin trading.
Binance partners with Trust Wallet, a leader in the digital wallet space with over five million users.
Binance also charges much lower fees than most other exchanges and incentivizes high-volume traders with their fee structure. The higher the trading volume, the lower the fees become.
Binance can lower your costs significantly. If you are an active trader, Binance just makes sense.
1 Minute Review
Coinbase is one of the most popular and user friendly
cryptocurrency trading platforms. It also makes it super easy to buy and sell major
cryptocurrency pairs like Bitcoin, Ethereum, Litecoin, Cardano, and many others.
Coinbase does not offer the lowest fees, but it does make it simple for beginners to make their first purchase or trade.
Quick Review
Beginner traders
Cryptocurrency traders interested in major pairs
Traders looking for a user friendly platform
Pros
Easy to operate
Mobile App mimics desktop experience closely
The Coinbase Earn feature rewards you with crypto for completing the educational content
Cons
Higher fees than competitors
The Different Types of Coins
Bitcoin was almost synonymous with the term cryptocurrency. However, that is no longer the case. While Bitcoin is still a top cryptocurrency, there are several other coins available. According to coinmarketcap.com, the top coins to invest in are:
Ultimately, there is not a single cryptocurrency that’s the best. Each currency has unique benefits for different use cases. Many people label Bitcoin as a top option for reserve assets because of its finite supply and widespread adoption.
Small market cap cryptocurrencies are seen as riskier than larger market cap coins.
When choosing a cryptocurrency, evaluate its team. Read the corresponding whitepaper and learn about the way the currency works and its intended use.
Overall, altcoins are on the rise. Some of the most popular DeFi tokens are up 500% in the last 6 months alone. According to market capitalization, the top 5 DeFi token include:
Ultimately, there is not a single cryptocurrency that’s the best. Each currency has unique benefits for different use cases. Many people label Bitcoin as a top option for reserve assets because of its finite supply and widespread adoption.
Small market cap cryptocurrencies are seen as riskier than larger market cap coins.
When choosing a cryptocurrency, evaluate its team. Read the corresponding whitepaper and learn about the way the currency works and its intended use.
Overall, altcoins are on the rise. Some of the most popular DeFi tokens are up 500% in the last 6 months alone. According to market capitalization, the top 5 DeFi token include:
Uniswap (UNI)
Aave
Maker (MKR)
Solana
Synthetix
How to Get Started
Here are the steps for how to invest in cryptocurrency:
Create a Cryptocurrency Brokerage Account
You need to make an account with a crypto brokerage of your choice. Provide your personal information, much like you would when opening a stock brokerage account. For example, you’ll need to submit your full name, address, date of birth, email address, and Social Security number.
Connect Your Account to Your Bank Account
Once you have a crypto brokerage account, you must fund the account. Connect the brokerage account with your bank account. Most times, you can fund your brokerage account via wire transfers and debit cards. On some platforms, wire transfers are free.
Choose Crypto to Invest In
There ae many different coins you can choose from. You’ll need to pick a crypto to invest in. Right now, Bitcoin and Ethereum are two of the most popular choices. Both of these cryptos offer greater predictability than many smaller altcoins.
While smaller altcoins are more volatile, they also present a greater potential. Small atcoins can grow at astonishing rates, like over 1000% in months. Many crypto investors dedicate a mportion of their investment to smaller atcoins for this reason.
Select an Investment Strategy
You must consider several indicators when purchasing and selling cryptocurrency. New investors may benefit from taking a cryptocurrency trading course. Generally, many investors follow similar strategies as they do for stock trading. Typically, it’s not good to buy at the pinnacle of a bubble nor during a crash.
Store Cryptocurrency
Active crypto traders need to store their currency. Storing your funds ensures you have access to them. You can choose a hot or cold wallet.
Create a Cryptocurrency Brokerage Account
You need to make an account with a crypto brokerage of your choice. Provide your personal information, much like you would when opening a stock brokerage account. For example, you’ll need to submit your full name, address, date of birth, email address, and Social Security number.
Connect Your Account to Your Bank Account
Once you have a crypto brokerage account, you must fund the account. Connect the brokerage account with your bank account. Most times, you can fund your brokerage account via wire transfers and debit cards. On some platforms, wire transfers are free.
Choose Crypto to Invest In
There ae many different coins you can choose from. You’ll need to pick a crypto to invest in. Right now, Bitcoin and Ethereum are two of the most popular choices. Both of these cryptos offer greater predictability than many smaller altcoins.
While smaller altcoins are more volatile, they also present a greater potential. Small atcoins can grow at astonishing rates, like over 1000% in months. Many crypto investors dedicate a mportion of their investment to smaller atcoins for this reason.
Select an Investment Strategy
You must consider several indicators when purchasing and selling cryptocurrency. New investors may benefit from taking a cryptocurrency trading course. Generally, many investors follow similar strategies as they do for stock trading. Typically, it’s not good to buy at the pinnacle of a bubble nor during a crash.
Store Cryptocurrency
Active crypto traders need to store their currency. Storing your funds ensures you have access to them. You can choose a hot or cold wallet.
Hot Cryptocurrency Wallet: A hot wallet is on a device directly connected to the internet. Desktop clients, mobile itwallets, and exchange wallets are all hot wallets. They make it easy to access funds and can be used for daily transactions that allow cryptocurrency. It’s best to only carry a small amount of your funds in the hot wallet for easy access. The major con of hot wallets is their lack of security. Cybercriminals can easily hack them.
Cold Wallets: Cold wallets are completely offline. They provide ultimate storage, and are ideal for long-term holders. Hardware and paper wallets are examples of cold storage. Cold wallets are still susceptible to security risks, but the risks can be mitigated much easier.
Hardware wallets. Physical devices that store cryptocurrency are hardware wallets. One common example is a USB tick. To ensure maximum security, never use a pre-owned hardware wallet. Make sure to back up hardware wallets with secure restoration details.
Paper wallets. Paper wallets are the safest, most secure way to store cryptocurrency. They involve printing out public and private keys on paper. The printed keys are QR codes, which you scan in the future to access the funds.Those who invest in crypto for the long haul and plan to leave a portion of the crypto untouched should consider a paper wallet.
Invest in Cryptocurrency Today
Cryptocurrency is relatively new, but it shows incredible promise for investors. There are many different ways to invest in the space, making it easy to find an option that suits your investment portfolio and goals.
More on Investing
The Best Way to Save for Kids’ College Fund Without Sacrificing Your Retirement
1148 views
April 26, 2021
Read more
Traditional Long Term Care vs Hybrid Long Term Care Insurance Options
856 views
December 3, 2020
Read more
More From Shiirs
Best For
Beginner Traders
Overall Rating
Learn More
Get Started
securely through Robinhood’s website
Best For
Social Copy Trading
Overall Rating
Learn More
Get Started
eToro USA LLC; Virtual currencies are highly volatile. Your capital is at risk.
Best For
Simple User Interface
Overall Rating
Learn More
Get Started
securely through Coinbase’s website
1 Minute Review
Coinbase is one of the Internet’s largest cryptocurrency trading platforms. From Bitcoin to Litecoin or Basic Attention Token to Chainlink, Coinbase makes it exceptionally simple to buy and sell major cryptocurrency pairs.
You can even earn cryptocurrency rewards through Coinbase’s unique Coinbase Earn feature. More advanced traders will love the Coinbase Pro platform, which offers more order types and enhanced functionality. Though Coinbase doesn’t offer the most affordable pricing or the lowest fees, its simple platform is easy enough for complete beginners to master in as little as a single trade.1 Minute Review
New cryptocurrency traders
Cryptocurrency traders interested in major pairs
Cryptocurrency traders interested in a simple platform
*Transacting in virtual currencies is subject to various risks, such as price volatility, and is therefore not suitable for everyone. Your capital is at risk.
Pros
Simple platform is easy to operate
Comprehensive mobile app mirrors desktop functionality
Coinbase Earn feature rewards you with crypto for learning about
available coins
Cons
Higher fees than competitors
Bitcoin
Price and Market Stats
BTC Price
$50,499,00-12.25%
Market Cap
$728,630,541,849
Trading Volume
$32,973,062,174
24h Low / 24h High
$32,499,00 / $50,499,00
All-Time High
$64,804.72-40.0%
Apr 14, 2021 (about 2 month)
All-Time Low
$64,804.72+57222.8%
Jul 06, 2013 (almost 8 years)