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How to invest cryptocurrency: a beginner's guide for 2025

A simple, educational guide to everything you need to know about investing in crypto - from ETFs to buying coins.

How to invest cryptocurrency: a beginner's guide for 2025
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From Bitcoin’s meteoric rise to the nonstop influx of new blockchain projects, digital currencies have captured the imagination (and wallets) of millions of people around the world. Crypto isn't just disrupting finance - it's rewriting the rules of money.

Unlike stocks or bonds that sleep when markets close, crypto never does. It’s borderless, always on, and untethered to any one country or institution, making it a magnet for those chasing new ways to diversify and bet on the future.

But it’s not all moonshots and memes. Volatility is real. Prices can rocket, or crash, within hours. And with rules still catching up, the landscape remains wild and unpredictable.

Here’s a guide to entering the market in 2025 - everything you need to know (and why it’s important). It’s not all high risk, high reward, so if you’re jumping in, make sure you know what’s going on.

What is cryptocurrency and how does it work?

Think of cryptocurrency as digital money that exists only online. Unlike the dollars in your bank account, which are controlled by banks and governments, cryptocurrencies run on networks of computers around the world.

The blockchain foundation

At its core, digital currency relies on something called blockchain technology. Imagine a ledger book that's copied across thousands of computers worldwide. Every time someone makes a transaction, it gets recorded in this ledger, and all the computers have to agree it's valid.

This system creates trust without needing a central authority like a bank: it's essentially having thousands of witnesses verify every transaction.

Types of cryptocurrency

There are plenty of different types of crypto on the market, each serving different purposes - from payment-focused currencies to utility tokens to memecoins.

Bitcoin (BTC) is the original and most well-known crypto, designed primarily as a decentralised digital alternative to traditional money. It's often referred to as "digital gold" due to its limited supply and store-of-value appeal.

Ethereum (ETH) introduced smart contracts (self-executing agreements), which opened the door to decentralised applications (dapps). This innovation gave rise to other development-focused platforms, like Solana (SOL) or Avalanche (AVAX), which power other smart contract ecosystems.

Then there are stablecoins, such as Tether (USDT) and USD Coin (USDC), which are pegged to fiat currencies like the U.S. dollar. These aim to reduce volatility and are often used for trading, lending, or cross-border transfers.

Utility tokens, like Chainlink (LINK) or Uniswap (UNI), serve specific functions within a platform, such as paying for services or governance participation. 

Meanwhile, security tokens represent ownership in real-world assets, like shares in a company or real estate. Examples include tZERO (TZROP), which offers tokenised equity in the tZERO platform, or INX (INX), a regulated token representing equity in the INX digital trading platform. These tokens are typically issued under securities regulations and grant holders rights like dividends or profit-sharing.

Lastly, memecoins (e.g., Dogecoin (DOGE) or Pepe (PEPE)) often start as jokes or community experiments but can gain traction through viral attention.

This is by no means a complete list, but it offers a sizable overview and a great place to start. 

Crypto vs stocks

When you buy a stock, you’re purchasing a share of ownership in a company. That ownership may entitle you to dividends (a portion of the company’s profits), voting rights, and access to company reports. These stocks are regulated by financial authorities, like the SEC in the U.S., and the value of a stock typically reflects the company’s performance, market conditions, and investor sentiment.

By contrast, when you buy crypto, you’re acquiring a digital asset - not a stake in a company. Most cryptocurrencies don’t grant ownership rights, dividends, or governance over a legal entity (unless structured as security tokens). Their value is driven by a combination of factors, including:

  • Supply and demand: Many coins have a limited supply (like Bitcoin), which can affect price.
  • Utility: Tokens may serve a specific function within a blockchain ecosystem, such as paying for network fees, accessing services, or participating in governance.
  • Market sentiment and adoption: Speculation, media attention, and global events often play a large role in price fluctuations.

Crypto markets are also 24/7 and borderless, unlike stock markets, which operate during fixed hours and are tied to specific jurisdictions.

Is cryptocurrency a good investment?

This question doesn't have a simple answer: the answer depends on your individual financial situation and risk tolerance. Let’s take a look at some of the potential benefits and risks. 

Potential benefits

  • Growth potential: Some cryptocurrencies have delivered extraordinary returns over the years
  • Decentralisation: Not controlled by any single government or institution
  • Accessibility: Markets operate 24/7, and you can start with small amounts
  • Portfolio diversification: May behave differently from traditional assets

Significant risks

  • Extreme volatility: Prices can dramatically drop in hours/days
  • Regulatory uncertainty: Government actions can dramatically impact prices
  • Security risks: Hacking, scams, and lost passwords can result in total loss
  • Complexity: The technology can be difficult to understand
  • Limited track record: Most cryptocurrencies haven't been around long enough to establish long-term patterns

If you're considering crypto as part of your broader financial strategy, it's worth consulting with a qualified advisor who understands digital assets.

Different ways to invest in cryptocurrency

The good news is that you don't have to buy a full Bitcoin to get exposure to the crypto market. Here are several approaches, each with different risk levels and complexity.

Buy crypto directly

This is the most straightforward approach - purchasing actual crypto through a regulated platform. Note that you can buy a fraction of a cryptocurrency, spending what you want instead of committing to buying a whole coin at market value (i.e. you can buy $100 worth of BTC as opposed to $100,000 for a full one).

What you need to buy crypto through Tap:

You can safely store your crypto in unique wallets created for you within the app. Utilising top security measures and fully regulated, Tap offers peace of mind alongside crypto endeavours. 

Crypto ETFs and ETPs

Exchange-traded funds (ETFs) let you invest in crypto through your regular brokerage account, just like buying stocks.

Examples include:

  • Bitcoin ETFs (like IBIT, FBTC)
  • Ethereum ETFs
  • Broad crypto market ETFs

Benefits:

  • No need to manage wallets or private keys
  • Familiar investment process
  • Potential tax advantages
  • Professional management

Drawbacks:

  • Management fees
  • No direct ownership of crypto
  • May not perfectly track crypto prices

Crypto-related stocks

You can gain indirect exposure through companies heavily involved in the crypto space.

Examples include:

  • Strategy (MSTR): Company that holds significant Bitcoin reserves
  • Riot Platforms (RIOT): Bitcoin mining company

These stocks often move with crypto prices but aren't direct replacements for owning crypto.

Blockchain investment funds

Some mutual funds and ETFs focus on companies developing blockchain technology, providing broader exposure to the ecosystem beyond just cryptocurrencies.

Advanced options (futures and options)

Experienced investors might consider crypto futures or options, but these are complex instruments with significant risks and aren't suitable for beginners.

How to choose the right investment strategy

Your approach to crypto should align with your overall financial goals and risk tolerance.

Consider your goals

  • Growth seeking: Looking for potentially high returns over time
  • Speculation: Short-term trading (highest risk)
  • Diversification: Adding a small crypto allocation to a traditional portfolio
  • Learning: Starting small to understand the technology

Time horizon matters

Crypto markets can be extremely volatile in the short term. If you might need the money within a few years, the high volatility could be problematic. As with any investment, never risk more than you’re willing to lose. 

Risk tolerance check

Some financial commentators say that because crypto can be so volatile, it's often kept as a small part of a larger investment portfolio, usually less than 10%. The right amount for you depends on your goals and how much risk you're comfortable taking.

Diversification within crypto

If you decide to invest in crypto, consider spreading your investment across different types rather than putting everything into one coin.

How to start investing in cryptocurrency: step-by-step

If you've decided to explore crypto investing, here's a systematic approach:

Step 1: Choose your platform

Research different exchanges and brokers. Look for:

  • Strong security track record
  • Good customer support
  • Reasonable fees
  • User-friendly interface
  • Proper regulatory compliance

For the sake of this guide, we will continue by using Tap as an example. 

Step 2: Set up security

  • Create and verify your account
  • Enable two-factor authentication (2FA)
  • Use a strong, unique password
  • Consider using a dedicated email for crypto accounts

Step 3: Do your research

Before buying any crypto, understand:

  • What problem it aims to solve
  • How it works
  • Who's behind the project
  • Its track record and community

Step 4: Make your first purchase

Some people start by purchasing small amounts as a way to learn about the ecosystem without overcommitting financially. On the note of beginners, well-established cryptocurrencies like Bitcoin or Ethereum tend to receive more attention because of their track record and broader adoption.

Step 5: Monitor and learn

Track your investment's performance, but avoid making decisions based on daily price movements. Use this time to continue learning about the technology and market.

Top mistakes to avoid when investing in crypto

FOMO investing

Fear of missing out can lead to buying at peak prices. Avoid making investment decisions based on hype or social media buzz.

Skipping research

Each crypto is different. Don't assume they're all the same or that past performance predicts future results.

Ignoring security

Using weak passwords, falling for phishing scams, or keeping large amounts on unsecured exchanges can lead to total loss. Be vigilant, check that the platform is regulated. 

Misunderstanding costs

Crypto transactions often involve multiple fees - trading fees, network fees, and spread costs. These can add up quickly. Be sure to check the final transaction costs before confirming the trade so that you never get blindsided by hidden fees.

Tax neglect

Cryptocurrency is taxable in most jurisdictions. Be sure to know what the current rules are in your area, or consult a tax advisor who is clued up on cryptocurrencies. Keeping good records from the start is much easier than trying to reconstruct them later.

Is it safe to invest in cryptocurrency?

Safety in cryptocurrency investing involves multiple layers of consideration.

Platform security

Choose exchanges and brokers with strong security track records. Look for:

  • Insurance on customer deposits
  • Cold storage of customer funds
  • Regular security audits
  • Transparent communication about security practices

Personal security practices

  • Never share your private keys or seed phrases
  • Be wary of phishing attempts
  • Use reputable wallets and software
  • Keep software updated

Regulatory environment

The crypto regulatory landscape is still developing. Changes in government policy can significantly impact prices and accessibility. Stay informed and be aware.

Scam awareness

Be wary of anything that sounds too good to be true. Common cryptocurrency scams include:

  • Fake exchanges or wallets
  • Ponzi schemes promising guaranteed returns
  • Social media manipulation
  • Fake celebrity endorsements

Should I invest in crypto for retirement?

Some retirement account providers now offer crypto options, but this comes with additional considerations.

  • Higher fees are common for crypto retirement accounts
  • Limited cryptocurrency options compared to direct investing
  • The extreme volatility may be inappropriate for retirement funds
  • Regulatory changes could affect availability

So, should I invest in crypto?

Crypto markets can be volatile and unpredictable. While some early adopters have seen significant gains, many others have faced substantial losses. This isn’t a guaranteed path to wealth - it’s a volatile, evolving market that demands clarity and caution.

Before you dive in, make sure you:

  • Understand the tech and the risks behind it
  • Know your own limits (financially and emotionally)
  • Start small - only with what you can afford to lose
  • Diversify, don’t go all-in on any one asset
  • Stay current: regulations shift fast, and ignorance isn’t bliss

This isn’t for everyone. Crypto’s wild swings and legal grey zones mean it’s best approached like any high-risk bet: informed, cautious, and never with more than you’re willing to lose.

Disclaimer

This article is for general information purposes only and is not intended to constitute legal, financial or other professional advice or a recommendation of any kind whatsoever and should not be relied upon or treated as a substitute for specific advice relevant to particular circumstances. We make no warranties, representations or undertakings about any of the content of this article (including, without limitation, as to the quality, accuracy, completeness or fitness for any particular purpose of such content), or any content of any other material referred to or accessed by hyperlinks through this article. We make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up-to-date.

faq

Frequently Asked Questions

1
How much should I invest in cryptocurrency?

Many financial experts suggest limiting cryptocurrency to less than 10% of your total investment portfolio due to its high risk and volatility, consider what works for your financial situation.

2
What is the safest way to invest in crypto?

The safest approaches typically involve: Using reputable, regulated platforms Starting with well-established cryptocurrencies Implementing strong security practices Investing only money you can afford to lose

3
Which crypto should I invest in?

This depends on your research, risk tolerance, and investment goals. Bitcoin and Ethereum are the most established, but all cryptocurrencies carry significant risks.

4
Can you invest in crypto without buying coins?

Yes, through crypto ETFs, cryptocurrency-related stocks, or blockchain-focused mutual funds, you can gain exposure without directly owning cryptocurrency.

5
Is crypto still worth investing in 2025?

The cryptocurrency market continues to evolve, with both opportunities and risks. The decision depends on your individual financial situation, risk tolerance, and investment goals. Read Is it too late to buy Bitcoin in 2025 for more insights.

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