{"id":7728,"date":"2022-05-18T00:15:00","date_gmt":"2022-05-18T08:15:00","guid":{"rendered":"https:\/\/www.cultofmoney.com\/?p=7728"},"modified":"2023-01-09T14:49:34","modified_gmt":"2023-01-09T22:49:34","slug":"how-to-invest-in-crypto","status":"publish","type":"post","link":"https:\/\/www.cultofmoney.com\/how-to-invest-in-crypto\/","title":{"rendered":"How To Start Investing In Crypto In 2023"},"content":{"rendered":"

\"How<\/span><\/p>\n

If you\u2019re a total cryptocurrency n00b (that\u2019s crypto slang for a newbie), you might be wondering about the first steps to start investing in crypto<\/a> in 2023. <\/p>\n

While the blockchain technology behind cryptocurrencies may sound intimidating, making your first Bitcoin, Ethereum, or other cryptocurrency investment is just as easy as buying a share of stock using your favorite brokerage, if not easier.<\/p>\n

Follow this beginner guide to start investing in cryptocurrency, and you could have your first cryptocurrency in less than 15 minutes!<\/p>\n

What Is Cryptocurrency?<\/h2>\n

Before we cover how to invest in crypto, it’s important to understand a bit more about what this technology even is so you know what you’re buying.<\/p>\n

Cryptocurrencies are a type of digital asset. And what makes cryptocurrency exciting and unique is that transactions are verified and recorded using decentralized blockchain technology, not a central authority<\/strong>.<\/p>\n

The nature of cryptocurrencies operating with blockchain technology<\/a> is why you often hear the term DeFi<\/a>, or decentralized finance, when talking about crypto.<\/p>\n

With cryptocurrencies, anyone in the world can participate in the digital economy. You can send or accept crypto payments from around the world, and people are even using crypto to take out loans or buy virtual real estate without going through a middleman like a bank.<\/p>\n

Granted, some cryptos are more decentralized than others. And some are tied to specific platforms, companies, games, or other purposes. But the overarching principle of crypto and blockchain is to provide a medium of exchange that’s decentralized, trustless, and immutable.<\/p>\n

Of course, there\u2019s no guarantee that cryptocurrencies will hold their value or go up in value in the future. And the future of crypto regulation is still playing out.<\/p>\n

However, if you want to diversify your portfolio with digital assets and are considering crypto, it’s important to know how to invest safely and what your options are.<\/p>\n

How To Start Investing In Crypto<\/h2>\n

Now that you know what cryptocurrencies are, here are the four simple steps it takes to actually invest in digital assets.<\/p>\n

Choose A Cryptocurrency Exchange<\/h3>\n

If you\u2019re ready to buy your first cryptocurrency, the first thing you need is a place to buy it. The easiest way for most people to get started is with a cryptocurrency exchange, so that\u2019s where we\u2019re going to focus here.<\/p>\n

A crypto exchange is similar to a stock broker, except you’re dealing with digital currencies, not shares of Apple.<\/p>\n

Every exchange has unique pricing and features that make them more or less attractive to various users. Depending on your level of tech-savvy, trading experience, cryptocurrency knowledge, and desired currencies, you may find one platform, or a combination of a few, make the most sense for your needs.<\/p>\n

The best-known exchange in the United States is arguably Coinbase<\/a>, but that\u2019s far from your only option (and far from the cheapest). Other popular exchanges include Gemini<\/a>, Kraken<\/a>, and Binance<\/a> (which is great for global investors.)<\/p>\n

You can read our list of the best crypto exchanges<\/a> for a full guide. But for beginners, Coinbase<\/a> or Gemini<\/a> are excellent starting points.<\/p>\n

Verify Your Account<\/h3>\n

Once you choose a crypto exchange, you need to set up your account.<\/p>\n

Most popular exchanges are centralized<\/a>. This means there’s some regulatory oversight and that exchanges have to follow certain rules. One of the main rules most exchanges follow are know your customer requirements, or KYC requirements<\/a>.<\/p>\n

KYC requirements mean you have to verify your identity to use an exchange. So, when signing up, make sure you have your SSN ready and a copy of government ID, like a passport or driver’s license. Thankfully, many exchanges verify accounts instantly or within a business day or two.<\/p>\n

Once your account is established, you can link a bank account and add funds. Many exchanges offer the ability to trade cryptocurrency instantly, even while the transfer is still underway. (You can\u2019t withdraw until the funds have settled.)<\/p>\n

Place Your First Trade<\/h3>\n

Time for the exciting part: actually buying your first crypto!<\/p>\n

Most exchanges have beginner-friendly interfaces that let you spot trade different cryptos at current market prices. All you have to do is pick the crypto you want, choose your linked payment method, and select how much you’re buying.<\/p>\n

Exchanges like Coinbase<\/a><\/strong> make the process very simple. You even get a quote that tells you how much crypto you should get after accounting for trading fees and blockchain network fees.Once you click the buy button, your order should execute near instantly. Congrats, you\u2019re a cryptocurrency owner and investor! High five.<\/p>\n

Store Your Cryptocurrency<\/h3>\n

Your cryptocurrency adventure doesn\u2019t end with the first purchase. You\u2019re just scratching the surface of what\u2019s possible. If you\u2019re interested in getting more experience with crypto, you may want to transfer currency to an outside wallet<\/a>.<\/p>\n

Centralized cryptocurrency exchanges like Coinbase hold the currency as a custodian for clients, similar to most stock brokerages. But you can also transfer your currency to a software wallet like Trust Wallet<\/a> or a hardware wallet like Ledger<\/a> or Trezor<\/a>.<\/p>\n

The advantage to holding crypto in your own wallet is that you’re in charge of security. You get to control your own private keys<\/a>, which is basically the master key for unlocking your crypto wallet. This way, if the exchange you trade on gets hacked, you don’t lose your crypto.<\/p>\n

The trade-off is you need to take charge of your own security. And if you lose your private key, which is really just a long alphanumeric string that’s basically impossible to remember by memory, you could be locked out of your wallet for good.<\/p>\n

We recommend beginner investors keep their crypto on a secure exchange while they learn the ropes. But once you understand more about crypto and blockchain, you can and should move your crypto to your own wallet for increased security.<\/p>\n

Cryptocurrencies To Know Other Than Bitcoin<\/h2>\n

Many new crypto investors start out with Bitcoin<\/a>, the most popular crypto by market cap.<\/p>\n

This isn’t a bad idea, and many investors actually view Bitcoin as a store of value and inflation hedge rather than a crypto you’d day trade.<\/p>\n

However, what makes cryptocurrency investing so exciting is that there are thousands of coins. And many of the top coins have unique technology and use-cases which is why they’re considered valuable.<\/p>\n

Here are some other top currencies to know about when starting<\/strong>:<\/p>\n