Guideline to investment in cryptocurrency for beginners

The growing acceptance and investment interest in cryptocurrencies have made many investors curious about entering the crypto world. This beginner's guide considering cryptocurrency as an asset will help you understand the basics of investing in cryptocurrency. Learn the details of what cryptocurrencies are, the different types of cryptocurrencies, and what to consider before investing, and it helps to determine where cryptocurrencies should fit in your portfolio. If you've decided to invest in crypto and are ready to get started, you can follow this guide step-by-step to get started.

What is cryptocurrency?

Cryptocurrency is a virtual currency that has the ability to be bought and sold just like cash. It is a means of investment like any other asset and can be bought and sold for financial gain. However, Cryptocurrency is one of the most volatile digital assets.

Unlike normal currencies, cryptocurrencies are decentralized, meaning they are not issued, backed, or regulated by a central authority such as the US government. The units of cryptocurrencies are called coins or tokens. Tokens are created digitally based on blockchain technology through a validation process. It is ‍a powerful technology that can be used in a wide range of applications, not just cryptocurrencies. Blockchain technology also known as distributed ledger technology, creates a secure encrypted record of the value of each virtual coin and every transaction associated with it. These records are distributed and linked across a network or computer of customers accessing the blockchain. Generally, anyone can access it with a device and internet connection to blockchain technology. This system is designed keeping in mind transparency, security, speed and accurate data storage.

Types of cryptocurrencies

Cryptocurrency is a general term for virtual currency, although it itself uses blockchain technology. There are many types of cryptocurrencies present in the market today. According to data from CoinMarketCap.com, there are more than 2.4 million cryptocurrencies in the crypto market as of May 2024. Bitcoin was the first of the cryptocurrencies to be created and is very popular. Collectively, all other coin-based cryptocurrencies are called "altcoins" which are considered alternatives to Bitcoin.

Several cryptocurrencies have achieved great success in the past years, gaining large market capitalizations and establishing solid foundations for users and investors.

Top 10 Cryptocurrencies in 2025

1.      Bitcoin

2.      Ethereum

3.      BNB

4.      Solana

5.      Tether

6.      XRP

7.      USDC (US Dollar Coin)

8.      Toncoin

9.      Dogecoin

10.   Cardano

Since the crypto ecosystem is a new concept and many cryptocurrencies are new, which currency will be the most successful is difficult to predict in advance. Although these currencies are at the forefront of the market, they still have risks. Investing in cryptocurrency has the potential for profit as well as loss. For example, after the crypto market price increase in 2021, the value of most cryptocurrencies fell sharply in 2022. 2024 crypto price reminds again 2021 so it is very important to know and understand the nature of each crypto before investing in crypto market. of the crypto market.

What to consider before investing in cryptocurrency

The cryptocurrency market is very volatile, which can cause large price swings in a short period of time, which may require you to pause if you want to avoid risk. Remember that anyone can launch a cryptocurrency and how it is regulated is up to them, so it's important to thoroughly vet potential investments to avoid scams. 

Thinking about why you are interested in investing in crypto can also be helpful. Are you looking for cash in on a trend, or have another new strategy in mind? Remember, there is no easy way to make a lot of money without risk so never invest in anything with the belief that you can't lose. Be careful and be clear about your intentions and expectations in advance. If you believe in the future potential of cryptocurrencies and want to see big price swings, you can consider cryptocurrencies as an investment.

When you invest, taking a long-term view is critically important. This is especially applicable to cryptocurrencies, where prices can go up or down quickly. When investing in highly volatile assets, letting emotions drive your decisions leads to mistakes, such as buying out of fear of missing out when the price goes up or selling when the price goes down. Such impulsive decisions usually do not bode well for investing in cryptocurrencies.

Is cryptocurrency a good investment?

Whether investing in cryptocurrency is right for you depends on a number of factors. Like all investments, crypto involves factors such as your tolerance for risk, both financial and psychological, and your time frame, as well as how diversified your portfolio is. The volatility of crypto means that the price of your coin can move up or down dramatically quickly.

Just because an asset is available to trade doesn't mean it's the right investment for you. All investments have risks and even you can lose money, as mentioned above.

Pros of investing in cryptocurrency

Before 2022, cryptocurrency prices were not highly correlated with other investment categories such as stocks and bonds, so a small exposure to these potentially high-growth sectors could improve risk-adjusted returns. Although correlations with cryptocurrencies and other investment categories are currently increasing, it is difficult to say whether this is a new trend.

Some experts compare certain cryptocurrencies like Bitcoin to gold: they are hard to destroy because they are scarce due to limited supply, both fungible and durable, and their purchasing power is not controlled by a central authority.

Due to the decentralization and transparency of the distributed ledger, fraud is less likely, making it difficult to compromise the network integrity behind cryptocurrencies.

Cons of investing in cryptocurrency

The cryptocurrency market is highly volatile; It is difficult to predict in advance when the value will rise or fall, and indicators of large price movements may not always be accurate.

The cryptocurrency market is highly volatile; It is difficult to predict in advance when the value will rise or fall, and indicators of large price movements may not always be accurate.

Cryptocurrencies are currently not heavily regulated by governments, so unlike conventional investments like stocks, crypto transactions have no legal protections.

How to keep your cryptocurrency secure

Taking precautions to protect your investment is one of the other concerns of crypto investing. Below are some tips that can help keep your crypto safe:

·        Only transact with trusted exchanges and digital wallet providers.

·        Secure access with strong passwords, two-factor authentication, and a secure Internet connection.

·        Beware of phishing scams targeting crypto users

·        Do not share your password or keyphrase with anyone.

How to invest in cryptocurrency 

If you are interested in investing in cryptocurrency, knowing where and how to buy and store it is very important. Like conventional investment platforms, there are numerous exchanges here, so set up an account on one of the better exchanges. However, thorough research must be conducted on each currency before investing. If newbies are wondering how to start investing, follow these five steps:

Choose which cryptocurrency to invest

Just as you evaluate a company's potential risk and financial health before buying its stock, you should understand and carefully evaluate the unique characteristics of each cryptocurrency you are considering investing in. You can invest in one or more different cryptocurrencies.

Cryptocurrency has become a popular means of fraud, ‍so it can be a bit difficult to pick reliable cryptos, because of pump-and-dump schemes projects. Considering all these risks, one needs to research how to invest in cryptocurrencies without falling prey to any scams. To avoid pump-and-dump schemes, avoid small and new crypto projects that are being heavily promoted on social media platforms. It is important to assess the risk of investing in a given cryptocurrency yourself as social media experts may not have your best interests in mind.

While you may be able to mitigate fraud and cyber security risks by investing in a large and reputable platform, the industry as a whole is unregulated, so risk cannot be completely eliminated. For example, FTX in 2022 was considered a trustworthy platform, run by bad actors who misused clients' funds. FTX's founder, Sam Bankman-Fried, was found guilty of fraud and money laundering on November 2, 2023. On March 28, 2024, US federal court sentenced Bankman-Fried to 25 years in prison.

Select a cryptocurrency exchange

Cryptocurrency must be purchased through an exchange or investment platform such as Coinbase, Gemini, or Kraken. Things you need to consider when choosing a crypto exchange are security, fees, trading volume, minimum investment requirements, and the types of cryptocurrencies available for purchase on a given exchange.

Consider storage and digital wallet options

Cryptocurrencies are completely digital-based, so you should have a digital place to keep your coins safe. An option is to keep them on the same platform where you are investing. Currently, many cryptocurrency investors prefer this option. You will ensure that the platform you choose guarantees the safety and security of your assets. These platforms are regulated, have strong protection against hackers and online threats and carry financial insurance guarantees.

If you decide to invest your cryptocurrency on popular platforms, you will need a crypto wallet. These wallets allow access to your crypto by unlocking the digital identity associated with your ownership recorded on the blockchain containing private keys. When it comes to choosing a digital wallet, you can choose a "hot" or "cold" wallet. Hot wallets are accessible over the internet and are generally convenient. A cold wallet, on the other hand, is a physical storage device, much like a USB drive, that keeps your cryptocurrency keys completely offline. Keeping your cryptocurrency in a crypto wallet gives you an extra layer of protection.

Decide how much to invest

As with any other investment, the amount you choose to put into crypto will depend on a number of factors such as your budget, risk tolerance and investment strategy. You should check the minimum investment requirements and transaction costs for any crypto, which vary on different crypto exchanges.

If you want to invest in a high-value cryptocurrency, most exchanges allow you to invest on a dollar basis rather than buying a unit of coin. This means you don't need huge amounts of money to invest in valuable cryptocurrencies like Bitcoin. The focus is on the amount of money you are investing rather than the coins you want to buy. Always keep in mind that the amount of money you lose will not affect your life much. Generally, at Stash, we recommend not investing more than 2% of your overall portfolio in any one crypto to minimize investment risk.

Manage your investments

Cryptocurrency is a unique investment because it can be used to purchase goods as well as be held as a long-term investment. How you manage your crypto holdings depends on your investment strategy and characteristics. You may consider applying the Stash Way, a philosophy that focuses on regular investing, diversification and long-term investing.

Conclusion

Currently, there are thousands of cryptocurrencies in the crypto market, generally, the crypto market is very volatile and risky. Investors in this market are exposed to a lot of losses in a short period as well as a lot of profit in a short time. All cryptocurrency investment advice above is based entirely on personal assumptions. So those who are planning to invest in Crypto should invest in Cryptocurrencies with a detailed understanding of Cryptocurrencies before investing or consulting people who are experts in Crypto. Otherwise, there is a possibility of major damage.