How to Invest in Cryptocurrency in 2024

In this guide, we will walk you through how to invest in cryptocurrency for beginners.

Updated: April 11, 2024
Matt Crabtree

Written By

Matt Crabtree

 
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In recent years, cryptocurrency has become one of the growing trends. Everyone wants the opportunity to invest and there are new types of crypto popping up all the time.

The process of mining crypto took the world by storm, so much so that it caused a major shortage with certain technology parts in the last few years. 

Cryptocurrency is still pretty new.

While it’s come a long way since Bitcoin debuted in 2009, there are still a lot of unknowns. If you have never invested in crypto before, it can be a little overwhelming. The prices of Bitcoin are through the roof, so where do you even begin if you’re interested in trying other types of crypto? 

We’ve got you covered. In this guide, I'll walk you through how to invest in cryptocurrency. Keep reading to find out everything you should know. 

What is Cryptocurrency?

When it comes to investments, for years people used the stock market to do so. And while that certainly isn’t going anywhere, cryptocurrency brought a new type of investment to the industry, and it has its own exchange system. 

Cryptocurrency, which you may also see referred to as just crypto, is a 100% digital monetary system. Every last bit is in digital form and it’s all tracked in that manner. It’s another form of payment. Much like different forms of currency, there are different measurements of crypto as well. 

And much like the stock market, there is a vast exchange of crypto assets out there that you can purchase and invest in. You can use crypto for spending, although the options to do so are still pretty limited. Most of the options for paying with cryptocurrency are on specific virtual platforms. 

Most people choose to invest in cryptocurrency and hold it in a wallet or a crypto account.

They trade it and exchange it much like you would stocks. It’s an interesting combination of currency and stocks wrapped up into one. That’s simply the easiest way to really describe what crypto is. 

The first form of cryptocurrency came from Bitcoin. It entered the market in 2009 and sold for pocket change at the time. It took several years to gain any type of momentum. It hit highs that surprised the world. Now, it hangs out around £20,000, sometimes being much higher and sometimes dropping lower. 

Now, the market has grown to somewhere around 12,000 different cryptocurrency assets and counting. It’s a vast world. And that number keeps growing. In 2022, nearly 1,000 new cryptocurrencies were added to the market almost every month. 

The challenge is that because it’s still new, the knowledge is still increasing and the world is just getting to know cryptocurrency and what it really is. It’s still going to take some time to figure out the details and get regulations properly enforced across the board. 

That being said, you can safely invest in cryptocurrency. You just need to be willing to do a little bit of research and understand how this market operates. 

Examples of Cryptocurrency Brands

It’s challenging to figure out what crypto to invest in. This is because there are so many different ones and you really don’t know much about any of them. Of course, there might be certain names you recognize, but how can you choose which crypto you want to invest in? 

There are several different types of crypto. They can fall into specific sectors, much like stocks do. There are four primary sectors at this time. Those include Standard crypto, and sectors like NFTs or utility tokens. Then there are value stores and central bank digital currency. Every cryptocurrency on the market right now will fall into one of these sectors. 

To invest in cryptocurrency, you will need a crypto wallet and you will need a crypto trading platform.

We will dig into those details here shortly. The next thing you need is to understand the cryptocurrency choices so you can pick where you want to invest. 

These are some of the most popular names in the industry. 

  • Bitcoin
  • Ethereum
  • Tether
  • BNB
  • USD Coin
  • XRP
  • Binance
  • Cardano
  • Polkadot 
  • Stellar
  • Dogecoin

But remember, while these might be some well-known names, there are 12,000+ choices and the market continues to grow.

How to Invest in Cryptocurrency

As a beginner, there is a lot of information to take in. It’s a great idea to do a little bit of research and gather as much information as possible before you start. This guide has a lot of great overall information to understand how cryptocurrency works and the steps that you need to take to invest accordingly. 

There may still be some information to sort through, such as choosing what cryptocurrencies to invest in. This guide would take hours to read if we went into detail on every single aspect. We want to give you a solid foundation that you can build on. And then you can take it from there. 

Let’s walk through the steps of buying cryptocurrency. Then, we have more information about trading platforms, crypto wallets, and more below. 

The basic steps that you’re going to follow are these. 

  1. Choose your crypto broker or exchange
  2. Fund your account
  3. Choose cryptocurrency and purchase
  4. Store cryptocurrency
  5. Buy, sell, and exchange as you please

1. Choose Crypto Broker or Exchange

The first step to being able to buy cryptocurrency is to choose a crypto trading platform to work with. You may want to look for a broker that allows you access to a wallet as well, but this will be your choice. 

As you check out options, consider how many crypto assets you will be able to access and whether or not you can access the ones you are most interested in. These are some of the top picks for crypto trading platforms available. 

  • eToro
  • Coinbase
  • Kraken
  • Revolut
  • Coin Jar

These are not your only options. You will want to take a little bit of time to sort through the choices and pick which platform you feel will be the best fit for you. While some people might rave about Coinbase, you may find that eToro seems most appealing to you.

It’s alright to choose based on your preferences rather than someone else’s. 

A broker or a trading platform will grant you access to an exchange with all of the cryptocurrency that platform has gained access to. Most platforms will allow you to buy, sell, or exchange your crypto. However, every broker is different which is why you need to learn a little bit about the different options before you just randomly choose one. 

Once you settle on a platform, go ahead and go through the process of opening and verifying your account. This process may vary slightly from broker to broker, but it’s going to be similar. 

2. Fund Your Account

Once you’ve got the account set up, you’re going to need to fund this account to be able to buy crypto. Most people will connect a bank account, a debit card, or even their PayPal for this. Your chosen crypto trading platform is going to have different options to choose from. 

When you’re trying to decide how to fund the account, you might also look at the fee structures. For example, some platforms will charge higher fees to use your debit card and lower fees to transfer directly from the bank. This might impact how you choose to fund the account. 

Some types of funding are almost instant. Others will require you to wait for the transaction to process and settle before you can use those funds to buy cryptocurrency. This might be another thing to pay attention to as well. 

If you’re in a hurry to make a purchase, then you should fund the account with whatever method will be the fastest. You should also be aware that it might not be instant and you may have to wait, even with fast methods. 

It’s a good idea to keep some cash funded in your account so that it’s there and ready if you decide there is a crypto you want to invest in immediately. It’s up to you how you manage this, but keep in mind the potential of having to wait for funding purposes. 

3. Choose and Purchase Cryptocurrency

Once your account is funded, it’s time to figure out which cryptocurrency you want to start investing in. You may decide to invest in a few different options just to see how they do. Or maybe you’ve heard a lot about some select names and you already know where you want to start investing. 

If you aren’t sure, start by doing some basic research to learn a little bit about the different names in the crypto industry. Remember that there are more than 12,000 to choose from. You should also remember that you won’t necessarily have access to all of them on the trading platform that you chose.

You will need to buy from one that you can access through your account. 

Pick out the cryptocurrencies that you want to invest in initially. Don’t forget to account for any possible trading fees as well. Now, head into your trading platform and make the purchase. Most of the platforms are easy to use. It should be clear what steps to follow when you are logged into your app. 

A lot of different apps and brokers have extensive training videos as well. It’s not a bad idea to go through tutorials and get to know your platform so you don’t make mistakes that could cost you. 

4. Store Cryptocurrency

Now, it’s time to store your cryptocurrency so that it is safe. Since these assets are 100% digital, it’s very important that you maintain security and keep them protected. Most people will utilize some sort of crypto wallet for storage. 

The broker that you opened an account with may have a crypto wallet as part of the platform. If they do and you feel secure with that platform, this is perfectly ok to use. Some people prefer to use wallets outside of their exchange platform, and that’s ok too. There are a lot of choices. 

Finally, you can even store your cryptocurrency in a cold wallet device. These are physical devices that are external. You connect them through a USB drive and offload your crypto into them. They have specific entry requirements to access and they track the crypto you are holding. The downside is if you break this or lose it, you could lose your assets too. 

Many platforms have made great strides in providing secure and reliable wallets so that you don’t have to utilize multiple different places to track, manage, or store your cryptocurrency. In the end, it’s up to you to choose what you feel most comfortable with. 

5. Buy, Sell, and Exchange

Now, you’ve got your first crypto purchase taken care of. It’s time to decide how you want to play the markets. You can hold and see what happens, but you also have the ability to buy, sell, or exchange your cryptocurrencies as you see fit. 

This is where it’s completely up to you. Perhaps the right fit for you is going to be to just hold the crypto you purchased and see what happens. Maybe you really want to try several different options. 

This is your strategy so make it work in whatever way you want to. That’s the beauty of this market. Just like investing in the stock market, you can create and manage your strategy in a manner that is suited to you. 

Obviously, you will want to stay informed and make sure you understand how the crypto markets work. Once you get started, you can continue to build up your portfolio and learn more and more about the crypto markets. 

This is your portfolio so make it how you want it. Understand the risks, decide how you want to invest, and continue forward from there. 

Choosing a Crypto Trading Platform

Earlier, we talked about choosing a crypto trading platform. If you want to be able to buy, sell, and exchange crypto, this will be an important part of the process. There are a lot of options out there.

The first step is to ensure you are looking at choices that are accessible for the UK area. 

Some apps won’t have access in every country, while others will have a wide variety of places that can use them. It’s just a matter of sorting through the options and choosing one that works for your needs. We’ve put together a few simple tips to help you find the best crypto trading app for your needs. 

Consider these things. 

What Crypto is Available?

You’re going to want a crypto app that has a lot of different availability. While you might be solely focused on a specific crypto right now, you may want access to others at some point too. What different platforms have access to will vary. 

Take the time to see how many different assets they have available. If there are specific tokens you are interested in, check it out to see if they have the ones you want. 

It’s nice to be able to access a variety of options. While there are 12,000+ cryptocurrencies out there, not every platform is going to have access to every single crypto on the books. Although many of them will have exchange capabilities where you might be able to go out and find a name if they don’t have it. 

We recommend looking to ensure they have some of the top names in their ranks. But you want to make sure that’s not all there is. The majority of the apps and platforms out there will give you direct access to more than 100 cryptocurrencies. Some of them are much higher. 

If you’re looking at specifics, try looking for diversity. Do they have multiple options? Do they have tokens that fall into several sectors so you can diversify your portfolio if you choose to? 

Fee Details

While a crypto app itself might be free, chances are you are not going to be trading for free. So, what is the cost of trading cryptocurrency? Well, it depends. There are a lot of factors that might affect your costs. 

Most crypto trading apps will impose percentage fees on your trades based on the volume of the trade. Others might charge a static fee for every trade. This is something that you will want to pay attention to and be familiar with. It’s going to affect the things you’re doing and how they work overall. 

In addition to trading fees, you will likely also pay fees for things like transferring cash into or out of the account. Again, this is something that could vary from broker to broker. 

As you’re looking at the different crypto trading platforms that have your interest, take a moment to look at their fee structures. These should be publicly available, but sometimes they are harder to find than others. 

Getting to know the fees will be an important part of making an informed decision. 

Security

What type of security is used for access to this crypto broker? Will you feel like your cryptocurrency is safe or that your financial information and private details are safe? Just like everything else, the security details will vary from app to app. 

Some companies have had breaches in the past, so take a look at those breaches and how they occurred. Have the companies that have experienced these issues taken steps to protect their clients from it happening again? There are also plenty of companies that have never had a breach. 

One popular protection method is to use two-factor authentication. While this can sometimes be a nuisance, it’s an important step to stay protected. Ask yourself this question. What measures are in place to protect your personal information, your assets, and your cash? Does it feel like enough?

Customer Service

Finally, consider the customer service available to you. You’re starting out as a beginner and it’s safe to say you might have some questions. Will customer service be easy to reach if you need help? 

Sometimes customer service isn’t just getting to talk to a person. That’s definitely an important part of it. However, it might also include how much helpful information a company makes available to you as well. Do they have valuable insight, tools, and resources so that you might be able to answer your own questions? 

And if you absolutely need to speak to a customer service person, how challenging is that going to be?

Choosing a Crypto Wallet

Now, let’s talk for just a moment about choosing a crypto wallet. You may not need a crypto wallet. Many of the apps have turned to offering a wallet. It can be far more convenient to utilize the wallet that your app or broker has available to you. But you also need to feel as though your holdings are safe and secure so keep that in mind. 

You have three basic options when it comes to wallets. 

  • Use the wallet the app offers
  • Use a specific digital wallet (hot wallet)
  • Use an external wallet device (cold wallet)

What you use is entirely up to you.

There are a lot of great names out there that are designed just to be a wallet for your crypto holdings. It’s a way to keep your crypto all in one place and keep it secure in a way that is good enough for you. 

Here are a few things to consider. 

Security

Most of the time, users look for crypto wallets because they want their investments gathered together and 100% secure. For that reason, security should be a priority in choosing the wallet that best meets your needs. 

As you look at the different types of wallets and the various companies that you can choose from, your primary question should be whether or not this will be secure. There is no amount of worry about your holdings that is worth it. 

Whether you choose to use the exchange provided wallet or a hot or cold wallet should purely be based on your comfort level and ensuring your assets are safe and secure. 

Accessibility and Compatibility

The other thing that we recommend thinking about is how accessible those assets will be. Is it complicated to access your wallet and then utilize it in coordination with trading, selling, buying, etc.?

Is it a complete pain to access your own assets? Every type of crypto wallet is going to be different. Their security requirements and their compatibility may differ. 

What do you need to think about? You need to know that you can access your cryptocurrency when you need to, but also that it’s secure. You also need to know that your crypto wallet of choice is going to be compatible with your crypto trading platform of choice. 

Top Tips for Beginner Cryptocurrency Investing

To wrap up our guide, we thought it might be helpful to provide the beginner with some basic tips. The cryptocurrency industry can feel a little overwhelming.

Anything that is new to you can quickly feel this way. 

Check out these tips and keep them in mind as you start diving into the crypto world. 

Learn, Learn, Learn

The best thing that you can possibly do is educate yourself. This is so important and yet it is so often failed at. It takes extensive research and learning to become an expert at anything. The same is true of the cryptocurrency industry. 

Even the advanced and experienced users are continually learning and discovering new things. With a market that has only been around since 2009 and only just started growing in the past few years, there is a LOT to learn. 

It can be overwhelming and that’s ok. You don’t have to learn everything in one day. However, we do recommend that you make a concerted effort to watch videos, read news and resources, and take advantage of learning materials so you can truly understand what it is you are investing in. 

Learn about the industry as a whole, educate yourself on how crypto trading works, learn about different forms and brands of crypto, and then continue to build your knowledge base as you go. 

People Make Mistakes

Have you ever invested in the stock market? What do you know about investing? Here’s the thing. Not every choice you make is going to be perfect. This is a speculative market and you never know what is going to happen. 

You may choose a crypto investment that is a total bust. This is one of the reasons you should be carefully researching. However, even the best research may not guarantee an asset that you pick. 

You’re bound to make mistakes. You can either learn from them and keep moving on or you can let them scare you away. 

Volatility

The cryptocurrency market will be riddled with volatility. Prices will go up and down and they will cycle over and over again. Some prices may go down and then never come back up. Any type of investment, especially speculative investments, works this way. 

Have you ever looked up the history of Bitcoin prices? This asset started at less than £1 and it stayed there for a lot of years. Then one year it went to more than £60,000. It’s continued to fluctuate but it remains pretty high now, especially when you consider where it started. 

This is just one example. These assets are known for their volatility. Sometimes the price bottoms out in a matter of seconds. You may need to stay on top of things and be prepared to act. Other times, you may just need to ride it out and see if it comes back up. 

The volatility is something that scares a lot of beginners. Be prepared for it. Stay in the know and pay attention to what is going on. 

And to piggyback on that, there is no guarantee. There is always risk involved and this is considered a high-risk market for many reasons. 

Invest Wisely

Finally, invest wisely. Remember that there are no guarantees in this market and it can be volatile. If you’re taking money that you’re going to need to pay the bills, that’s not a great idea. It’s a lot like gambling. 

The rule of thumb is that you should never invest more than you can afford to lose. Don’t go into debt to invest in cryptocurrency. Don’t use your emergency fund either. Make sure that your finances are not going to be drastically affected should you lose money in the markets. 

Losing money is always possible. Keep that in mind and make wise investment choices. 

Final Thoughts

There is a lot to know about how to invest in cryptocurrency as a beginner. You could learn new things about this industry every day, and new options continue to come out quite regularly. It’s a market that is growing at an astronomical rate. Get to know all the details and always invest wisely. 

We hope this guide helps you as you get started working with cryptocurrency.

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