Crypto Investment: 5 Strategies to Get Started

crypto investment
Feb 13, 2024 Reading time : 7 min

In 2023, the world’s cryptocurrency market saw a record increase in the number of people who use it and growth, with as many as fifty million new users becoming crypto-investors. This rapid growth was fuelled by the enticement of huge profits promised by these revolutionary digital assets. 

When traditional finance paradigms changed, more investors were looking to diversify their investment portfolios and take advantage of the opportunities offered by cryptocurrency. Growing demand for digital currency signaled a significant transformation in the market, and decentralized technology continued to alter the traditional strategies for investing and rethink concepts of value and accumulation globally.

But how do you get started in crypto?

What steps do you follow to safely buy a cryptocurrency and maximize your chances of success? In this article, we walk you through the five key Crypto investing strategies to start your journey into crypto-investing.

Strategy1: Understand the Technology Behind Cryptocurrency

Technology Behind Cryptocurrency

Crypto investing begins with understanding the technology that supports it: blockchain.

This technology, often compared to a digital ledger, is the heart of all cryptocurrencies.

It allows data to be saved and transmitted easily, safely, and securely without intermediaries.

When you decide to buy cryptocurrency, you directly interact with this technology.

Each transaction is recorded in a blockchain block, verified by thousands of computers 

worldwide, making the transaction transparent and virtually impossible to tamper with.

Investing in crypto, therefore, means investing in this technology of the future.

Cryptocurrencies, like Bitcoin or Ethereum, have the potential to transform the way we transact, just as the Internet has revolutionized the way we communicate.

Trading may seem intimidating to a beginner, but it is an accessible practice.

It involves selling and buying cryptocurrency to earn profits.

This can be done in the short term by taking advantage of price fluctuations or, in the long term, by investing in promising cryptocurrencies and waiting for their value to increase.

Understanding the technology behind cryptocurrencies is, therefore, the first step for any investment.

Get informed, and take the time to learn, mainly through training or learning videos.

This base will enable you to navigate with confidence through the maze of crypto.

Strategy 2: Select the Most Suitable Exchange for Your Successful Crypto Investment

Crypto Investment

When investing in crypto, choosing the right exchange platform is paramount.

There are two main types of exchanges:

  • Centralized exchanges ( CEX)
  • Decentralized exchanges (DEX)

CEXs, like Binance, Bybit, or Bitfinex, are managed by a company that facilitates transactions between buyers and sellers.

They are generally more user-friendly, offer more services (like crypto trading), and have greater liquidity.

However, they are also more likely to be targeted by hackers, and you should entrust the custody of your cryptos to the company.

On the flip side, decentralized exchanges (DEXs) enable users to trade directly with one another, eliminating the need for intermediaries.

They offer more privacy, and you stay in control of your cryptos at all times.

Nevertheless, they may present a steeper learning curve and typically offer reduced liquidity.

For a beginner, start with a CEX.

These platforms are easier to use and often offer educational resources to help new users understand how to buy and invest in cryptocurrency.

Choosing the exchange is, therefore, a key step for your investments.

Going for a platform that aligns with your requirements and comfort level is paramount.

Strategy 3: Determining the Optimal Crypto Wallet Tailored to Your Needs

Optimal Crypto Wallet

Once you have decided to invest in crypto, picking your wallet is one of the most vital decisions.

A wallet allows you to store and manage your cryptocurrencies securely.

It is necessary for buying cryptocurrency, trading crypto, and securing your assets.

There are two types of wallets, each with advantages and disadvantages.

Hot wallets

Hot wallets encompass web-based, desktop, and mobile wallets.

You install These programs on your computer, browser, or smartphone.

This is the case of Trust Wallet or MetaMask,  for example.

The term “hot wallet” originates from their practicality for frequent, everyday use.

They are user-friendly and particularly suited for crypto novices.

However, they remain vulnerable to malware attacks and user errors.

Physical wallets or “cold wallets.”

These physical devices look like a USB stick that stores your cryptocurrencies offline.

Ledger and Trezor stand out as some of the market’s most recognized and widely-used options.

They offer superior security, as they are safe from online attacks.

However, they can be more expensive and less practical for everyday use.

This type of wallet is mainly used by people with some experience and long-term investors.

Choosing the ideal wallet depends on your specific investment needs.

Consider your technological comfort level, the number of digital currencies you plan to manage, and the level of security you want.

Strategy 4: Invest in Crypto: Know How to Select the Best Assets

Invest in Crypto

Crypto investing is not limited to purchasing Bitcoin or Ethereum.

Numerous cryptocurrencies exist, each offering its potential for returns.

Nonetheless, cryptocurrencies vary significantly in their attributes and value propositions.

Some have enormous growth potential, whereas others may be risky investments.

Some investors focus on cryptocurrencies with the largest market capitalizations, like Bitcoin or Ethereum.

These cryptocurrencies are generally more stable, but their return potential may be limited.

On the other hand, other investors look to invest in small-capital cryptocurrencies that can potentially explode in value.

However, these investments are also riskier and can sometimes be scams.

So, how do you find the right compromise?

The major step is conducting research, often called “DYOR” (Do Your Research).

A DYOR involves thoroughly analyzing a cryptocurrency before investing.

This may include studying its white paper, evaluating its development team, understanding its usefulness, and reviewing its past pricing performance.

Investing in digital currency requires in-depth analysis and research.

If you are a beginner or an experienced trader, DYOR is a necessary step to succeed in investing.

Strategy 5: Buy Cryptocurrency: Taking Action

 Buy Cryptocurrency

Buying cryptocurrency for the first time is a significant step in your crypto investing journey.

This is when you move from theory to practice and implement everything you have learned.

It is noteworthy to note that buying cryptocurrency does not necessarily mean investing all of your capital in a single crypto.

Even when a cryptocurrency appears promising, exercising caution and diversifying your investments is advisable.

When you’re ready to buy cryptocurrency, you must decide how to invest.

  • Are you considering spot buying, meaning purchasing the cryptocurrency for long-term holding?
  • Or will you invest in futures, that is to say, bet on the future evolution of the cryptocurrency’s price?
  • Will you use leverage to increase your return potential?
  • And what about staking, a method that enables you to earn interest on your cryptocurrencies? There isn’t a one-size-fits-all answer to these inquiries.

There is no single answer to these questions.

Each investor has a strategy based on their goals, risk tolerance, and comfort level with trading.

For a beginner in crypto, the ideal is to start by buying a small amount on the spot and then familiarize yourself with the other options.

Buying cryptocurrency may seem intimidating, but it’s the start of your quest for financial success.

And always keep in mind that you’re not alone.

The Stradoji community is here to support you through every step of your journey.

Bonus: TradingView, Trading Algorithm… Equip Yourself With the Best Tools

Crypto investing is not limited to buying and selling cryptocurrencies.

To succeed, you must equip yourself with the best tools available.

Utilizing these tools can assist you in market analysis, making well-informed decisions, and optimizing your returns.

Among these tools, CoinGecko and CoinMarketCap are two major platforms for any investor.

They furnish comprehensive data on various cryptocurrencies, encompassing their current price, market capitalization, trading volume, and more.

This data can aid in recognizing market trends and picking optimal investment opportunities.

TradingView is another major tool for any investor.

It provides live charts and tools for technical analysis in real-time.

Finally, trading algorithms can be a valuable asset to your investment.

These tools use algorithms to analyze the market and execute trades on your behalf securely.

They can help you maximize your returns, even when you can’t monitor the market constantly.

If you’re new to crypto or a seasoned trader, these tools can assist you in optimizing your returns and attaining success in investments.