How to Invest in Cryptocurrency: A Step-by-Step Guide

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  • December 1, 2021
How to invest in crypto

So, you’re interested in investing in cryptocurrency, but you don’t really know how to invest in cryptocurrency. This is a common story. Considering its explosive cultural relevance and emerging markets, it’s no wonder there are so many newcomers to the industry! 

That said, because of the decentralized nature of cryptocurrency, it can be difficult to get the information you need to start buying and selling coins. Online resources are helpful, but the sheer amount of information can be overwhelming and hard to digest. Not to worry; we’re here to clear the air and help get you started with crypto. In this brief guide, we’ll go through the very first steps you’ll take on your journey to becoming a knowledgeable crypto enthusiast. Keep reading to discover four steps to investing in cryptocurrency! 

Browse This Content: 

  1. Consider Your Motivations for Investing in Cryptocurrency 
  2. Pick a Crypto Coin (or More!) 
  3. Set Up Your Crypto Wallet
  4. Find a Place to Buy and Sell Cryptocurrency

Step 1: Consider Your Motivations for Using and Investing in Cryptocurrency 

While you may be eager to purchase your first crypto coins immediately, we encourage you to reflect on your reasons for investing before you get started. It’s important to identify what you’d like to get out of an investment before diving in head-first. People who invest in cryptocurrencies do so for a variety of different reasons, including the following:

  1. Hobby Investing: Investing in cryptocurrency can be exciting and community-building! Hobby investors aim to capitalize on crypto market opportunities with the help of other investors and enthusiasts in online communities. 
  2. Transferring Money: Cryptocurrencies can rival wire transfers with lower fees and faster transfer speeds. This can make it easier and less expensive for individuals to send money internationally. 
  3. Making Private Transactions: Decentralized currencies offer a way to essentially be your own bank without having to share personal information with governments or intermediaries. 

Step 2: Pick a Crypto Coin (or More!) 

Once you’ve identified your reasons for investing in cryptocurrency and have outlined your general goals, it’s time to get a little more granular. Specifically, you’ll have to identify which coin(s) you want to invest in, how much money you want to invest and your game plan for investment. While your personal investment strategy will be unique to you, these general tips may be able to help you decide how to invest in cryptocurrency: 

Get Familiar With Crypto Coins

There are thousands of digital tokens out there. To start, it’s best to familiarize yourself with the most popular crypto coins (Here’s a list of the most popular crypto coins as of September 2021). You can also learn about the key differences between Bitcoin and Ethereum, the top two crypto coins, here. Some of the most defining features of a coin that can help you identify if you feel confident making an investment into its future include: 

  • The purpose behind the coin’s creation: What goals do the creators hope to achieve with this coin? 
  • The market capitalization: How big or small is the coin, relatively?
  • The coin’s history of volatility: What is the coin’s track record like? 
  • The technology behind the coin: Blockchain, smart contracts, etc. 
  • Offline applications of the coin and utility: Can this coin be used for your desired purposes? 

Quick Crypto Tip: Starting your crypto investments with Bitcoin and/or Ether can make it easier for you to buy altcoins in the future, as some of these coins can only be purchased with Bitcoin or Ether and not fiat currency. 

Get an Expert Opinion and Educate Yourself! 

As popular as it is becoming, cryptocurrency is still very much in its infancy. A whole host of factors drive the increase and decrease of crypto coin prices, making the markets rather volatile and speculative. Due to their decentralized, unregulated nature, the future of cryptocurrency can be difficult to predict, but seeking out expert opinions and insights can help you make more confident decisions. 

Experts say that cryptocurrency regulation will likely continue to be a topic of discussion going forward, which will undeniably influence cryptocurrency markets. Many experts believe that regulation will help make crypto safer, but the way the markets will react to regulation is still up in the air. For example, in September 2021 when China made cryptocurrency illegal, the prices of many crypto coins actually increased, to the surprise of many. Other factors such as crypto ETFs coming to the USA and the further adoption of cryptocurrency in everyday transactions, are sure to impact crypto markets as well. 

All of this is to say that crypto coin markets are still volatile; that’s why it’s often recommended by experts to keep your cryptocurrency investments at 5% or less of your overall investment portfolio.


Step 3: Set Up Your Crypto Wallet

With your plan of action in place, you’ll need a device and a crypto wallet so that you can make transactions and store your crypto coins safely. A crypto wallet can be a physical device or a program on a website or app. You’ll need one to store the public keys (address) and private keys required to access, buy and sell coins.

When making transactions with decentralized coins that use a public ledger, your wallet address will appear on that ledger with the amount of coins that were transferred. Not to worry, though, this address is not tied to your identity and it’s not the same as the private key needed to access your coins. 

For more information on crypto wallets, the transaction process and more, consult our guide here

Quick Crypto Tip: It’s important to note that physical wallets disconnected from the internet are generally thought to be safer from cybersecurity threats. 

Step 4: Find a Place to Buy and Sell Cryptocurrency 

Finally ready to buy coins? Crypto enthusiasts can use online tools such as trading platforms, exchanges, peer-to-peer platforms and more, depending on what’s available where you live. Crypto ATMs offer a convenient and barrier-free way to get involved with cryptocurrency. You can learn more about what you can do at a crypto ATM and how to use one step-by-step.

Buy and Sell Cryptocurrency With Localcoin!

Localcoin ATMs offer an accessible, user-friendly and secure way for anyone to buy and sell cryptocurrencies in their communities. This is especially meaningful for beginners who are seeking a hassle-free way to dive into the world of digital currency with confidence! Plus, by reading this beginner's guide on "how to invest in cryptocurrency" you will have fewer misunderstandings regarding the crypto investment process.

Newcomers and experts alike can easily access Localcoin ATMs when and where they need to. As Canada’s largest Bitcoin ATM network with more than 900+ terminals, it’s never been more convenient to buy and sell cryptocurrency.

Note: Information provided on this Site is for general educational purposes only and is not intended to constitute investment or other advice on financial products. Such information is not, and should not be read as, an offer or recommendation to buy or sell or a solicitation of an offer or recommendation to buy or sell any particular digital asset or to use any particular investment strategy.


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