The Basics of How to Invest in Crypto

A Thought Leadership article we liked from Alto:

How to Invest in Crypto: A Beginner’s Guide

Want to invest in crypto but feel intimidated or aren’t sure how? Here, we talk about how to invest in crypto for the first time, whether you want to start small or dive in. 

Getting into crypto can be intimidating at first. Especially when it seems like just about everyone is talking about it.

If crypto is new to you, you’re not alone. A recent survey by the University of Chicago found that only 13% of Americans have invested in crypto to date—most of whom did so within just the past year.

What’s more, about a third of respondents who hadn’t invested in crypto said it was because they didn’t know how.

So today we’re looking at the basics of how to invest in crypto. But first, a few words…

Investing in Crypto for the First Time

Crypto is an extremely broad topic. To keep things simple, we’re focusing on some of the most common and easiest ways to invest in crypto for the first time. In other posts and articles, we’ll explore related concepts, like what a crypto wallet is.

We also will not be making recommendations about what crypto you should invest in. Before investing in a certain coin or token, it’s important that you do your homework. You might also consider talking to a financial advisor. And as always, never invest more than you can afford to lose.

Remember: Crypto is a highly volatile asset class. While the value of cryptocurrencies like Bitcoin and Ethereum have grown tremendously, others have failed, and past performance is just that. It is by no means a guarantee of how a certain asset or the overall market will perform in the future.

Now, with that all said, let’s talk about ways to invest in crypto as a beginner.

Where to Invest in Crypto

From exchanges to managed crypto funds and even individual retirement accounts (IRAs), you have options when it comes to where to invest in cryptocurrency.

Here, we’re taking a look at three easy ways to invest in crypto. Keep in mind though that there is no one best way to invest in crypto, and this is by no means an exhaustive list.

1. Centralized Cryptocurrency Exchanges

When most people think about buying and selling crypto, it’s via a centralized exchange (CEX) like Coinbase, Binance.US, or Kraken. And these are often good places to start due to their relative ease of use.

Think of a CEX as a marketplace where you can purchase investment opportunities. Centralized exchanges allow you to buy and sell cryptocurrencies in much the same way you would stocks. But they also hold your funds for you, as well as make it easy to send and receive crypto, and add and withdraw USD funds.

Perhaps most important to the newly cryptocurious, most of these exchanges allow small investments. That means you won’t need to commit a large sum of money to dip your toes. (Note: You do not need to buy, for example, an entire Bitcoin to gain exposure to BTC. Instead, you can buy a fraction of a given crypto asset.)

Additionally, with a CEX, you don’t need to worry about...

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