Are you considering investing in cryptocurrency? If yes, then you might want to follow the essential tips below so that you can effectively navigate the unique risks and prospects of the volatile market. As a new investor, you can easily be overwhelmed by the complex technical aspects and the regulatory uncertainty of the cryptocurrency market.
Nonetheless, to mitigate the risk, you should enter the market with your eyes wide open and with the readiness to commit to long-term speculations.
Keep reading.
Avoid Investing More than What You Can Actually Afford
Cryptocurrency is trending in 2025; however, it is an extremely volatile market, which is why it is important for you to avoid investing more than what you can actually afford to lose. The cryptocurrency market has both skepticism and opportunism. With that said, the best you can do is to be mindful of the amount that you are investing in crypto.
If you are considering setting up an investment portfolio, make sure that crypto assets make up 5% of your overall portfolio.
Try to Stick with the Fundamentals
When vetting a crypto investment, you will assess various stock market assets. Vetting the market involves analyzing real-life adoption potential. You will review the technical specifications and study the founders and developers. Make sure to scan community engagement and also evaluate your competitors.
With that said, as a newbie investor, it is in your best interest to invest in assets that are tied to the fundamentals and have been time-tested.
Understand Cold Wallet vs Hot Wallet
As a newbie investor, you should know that while cryptocurrency lives on the blockchain, you need a wallet to hold the private keys with which you can access, sell, or buy your digital assets. On that note, you can benefit from both the cold wallet and hot wallet; however, you also know the difference and the perks of cold wallet vs hot wallet, as wallets make trading so much more convenient.
You can hire a dedicated service provider to manage your wallets. However, you can also manage the wallets yourself. A cold wallet offers stronger protection against cybersecurity threats compared to a hot wallet. More on cold wallet vs hot wallet can be read in a detailed guide by BitGo.
Invest in Major Cryptocurrencies
As a first-time investor, we recommend that you start the digital investment journey with the major cryptocurrencies, such as Ethereum and Bitcoin. These established crypto assets provide first-mover and other benefits. The established cryptocurrencies are linked with a series of digital assets that are built upon them, such as EFTs and NFTs.
These well-known digital assets have gone through several market cycles and potential downturns. Of course, the risks remain; however, bigger cryptocurrencies have exhibited resilience, unlike smaller coins.
Final Thoughts
You definitely want to play it safely as a beginner investor in cryptocurrency. With that said, make sure to use safe storage, such as storing your crypto with a reliable crypto custodian or opting for a hot or cold wallet. Wallets and crypto custodians establish reinforced security layers, such as encryption, offline crypto storage, and multi-signatures. Simultaneously, make sure to keep the recovery phase safe, too.
