Cryptocurrency has moved beyond speculation and into the mainstream as a recognized asset class. Investors are no longer limited to simply buying and holding tokens. These days, investors can choose from a range of crypto investment strategies, including long-term vs. short-term crypto investing, cryptocurrency staking and lending, and DeFi (Decentralized Finance) investing.
Are you wondering how to invest in cryptocurrency? This guide explores how to start investing in crypto, will teach you how to evaluate the risks of investing in cryptocurrency, and choose the right assets to suit your investment goals.
Cryptocurrency investing for beginners
Cryptocurrencies operate on decentralized networks, meaning transactions do not rely on banks or financial institutions. Instead, blockchain technology records and verifies all transactions, offering transparency but also introducing unique risks.
How cryptocurrency differs from traditional investments
Decentralization – Most cryptocurrencies run on blockchain networks, removing the need for a central authority. Many traditional assets, like stocks, on the other hand, are issued and regulated by companies and governments.
24/7 trading – Unlike stock markets, which have set trading hours, crypto vs. stock market investing allows for constant price movement, increasing both opportunities and risks.
Ownership and utility – Traditional investments might represent shares in a company or claims on assets, while cryptocurrencies function in various ways. Some act as digital currencies, others support blockchain infrastructure, and many enable smart contracts.
High volatility – Crypto prices react sharply to market sentiment, technological changes, and regulatory news.
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How to start investing in crypto & what to consider
Planning well reduces risk and improves long-term outcomes. Investors must evaluate security, strategy, and market conditions before making their first trade.
Secure cryptocurrency investing
Security remains one of the most critical aspects of how to invest in cryptocurrency. Digital assets are vulnerable to hacks, scams, and exchange failures, making secure cryptocurrency investing a top priority.
Use trusted wallets
Enable two-factor authentication
Beware of phishing scams
Choosing an investment strategy
Long-term vs. short-term crypto investing – Some investors hold assets for years, betting on the future, while others trade frequently to capitalize on price movements.
Passive vs. active strategies – Passive income with cryptocurrency, such as cryptocurrency staking and lending, generates rewards over time, while active trading requires constant market monitoring.
Diversification – Spreading investments across different cryptocurrencies reduces risk and prevents overexposure to a single asset.
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Understanding market drivers
Adoption and utility – Demand grows when cryptocurrencies gain real-world use cases.
Technological advancements – Network upgrades and scalability improvements affect price movements.
Regulatory environment – Government policies, taxation, and crypto-friendly regulations influence market trends.
A strong foundation in these areas allows investors to explore crypto investment strategies with confidence, balancing risk with growth potential.
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Long-term vs. short-term crypto investing
Investors approach cryptocurrency with different time horizons. Long-term vs. short-term crypto investing depends on risk tolerance, market outlook, and trading experience.
Long-term crypto investing (HODLing)
HODLing is a crypto investing term that originated from a misspelled word for “holding.” It refers to buying cryptocurrencies and keeping them long-term, regardless of short-term market fluctuations.
Investors who follow this strategy believe that blockchain and technological advancements will drive long-term value appreciation.
This works best for investors who believe in blockchain’s long-term potential and want a lower-maintenance strategy. For investors exploring how to invest in Bitcoin and Ethereum through HODLing, this typically involves choosing established assets, storing them in secure wallets, and staying disciplined during market fluctuations.
The main advantage of this strategy is reduced exposure to short-term volatility and lower trading fees. However, it requires patience, as crypto market cycles can take years to fully recover from downturns. For those who seek passive income with cryptocurrency while minimizing active trading risks, HODLing remains a popular choice.
Short-term crypto investing
Short-term crypto investing focuses on profiting from price fluctuations over days, weeks, or even hours. Compared to long-term investors who hold assets for years, short-term traders actively buy and sell based on market trends, technical analysis, and news events. This strategy requires a strong understanding of crypto investment strategies and the ability to react quickly to market movements.
There are several forms of trading within short-term crypto investing:
Day trading involves buying and selling cryptocurrencies within the same day to capture small price movements.
Swing trading focuses on holding assets for several days or weeks, aiming to profit from broader market trends.
Scalping is an ultra-short-term strategy where traders make multiple quick trades per day to capitalize on tiny price shifts.
This strategy suits investors who have the time and expertise to monitor markets closely. In the context of long-term vs. short-term crypto investing, short-term strategies offer the potential for high returns, but they also come with greater risk. Constant price volatility, high transaction fees, and sudden market shifts can lead to losses if trades are not managed carefully.
For investors with the ability to execute trades efficiently, short-term investing can provide lucrative opportunities to those with a high-risk tolerance. On the other hand, short-term trading may be too demanding for investors seeking passive income with cryptocurrency or a lower-maintenance strategy.
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Risks of investing in cryptocurrency
1. Market volatility
Crypto prices experience extreme fluctuations, sometimes rising or falling by double digits within hours. Volatility creates trading opportunities, but it also increases the risk of substantial losses.
2. Regulatory uncertainty
The legal status of cryptocurrency varies by country. Governments continue to develop policies on taxation, trading, and usage, which can impact market stability. Sudden regulatory changes may restrict access to certain assets or affect investor confidence.
3. Security threats
Unlike traditional bank accounts, cryptocurrency holdings are not insured. Hacks, exchange failures, and phishing scams pose risks, making secure cryptocurrency investing necessary. Storing assets in private wallets and using strong authentication measures help mitigate these threats.
4. Liquidity risks
Some cryptocurrencies lack sufficient trading volume, making it difficult to buy or sell without significant price slippage. Low liquidity increases market manipulation risks and limits exit opportunities during downturns.
A strong risk management strategy, combined with secure storage and a well-researched investment approach, helps mitigate the risks of investing in cryptocurrency while navigating an evolving market.
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How to buy and store cryptocurrency
Investors need a clear plan for both purchasing and safeguarding their assets. How to buy and store cryptocurrency depends on choosing a secure platform, selecting the right wallet, and ensuring protection against theft or loss.
Buying cryptocurrency
Purchasing crypto requires choosing a reliable exchange or trading platform. Investors should evaluate factors such as security, fees, and supported assets before selecting a platform. Many centralized exchanges offer user-friendly access, while decentralized exchanges provide greater control over private keys.
Best crypto wallets for investing
After purchasing, securing assets in a private wallet is a necessity. The best crypto wallets for investing depend on an investor’s priorities—convenience, security, or accessibility.
Cold wallets (offline storage)
Hardware wallets (e.g., Ledger, Trezor Model T) provide maximum security against hacks, making them ideal for long-term investors.
Paper wallets generate private keys offline, but require careful handling to avoid physical damage or loss.
Hot wallets (online storage)
Software wallets (e.g., Exodus, Atomic Wallet) offer a balance between security and accessibility.
Mobile wallets (e.g., Trust, MetaMask) provide quick access for active traders but are more vulnerable to cyber threats.
Storage considerations
Private key ownership – Investors who control their own keys have full access to their assets.
Multi-signature wallets – Adding extra authentication layers enhances secure cryptocurrency investing.
Backup and recovery – Keeping secure backups prevents loss of funds due to device failure.
Selecting the best crypto wallets for investing and understanding proper storage methods reduces security risks and strengthens investment protection.
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Best cryptocurrency to invest in 2025
The crypto landscape shifts rapidly, but some assets continue to dominate due to widespread adoption, technological advancements, and strong use cases. Choosing the best cryptocurrency to invest in 2025 depends on an investor’s strategy—whether prioritizing long-term growth, utility, or diversification.
- Bitcoin (BTC) – As the first and most recognized cryptocurrency, Bitcoin remains a store of value and a hedge against inflation. Institutional adoption and limited supply continue to drive long-term demand.
- Ethereum (ETH) – More than just a currency, Ethereum powers DeFi investing, NFTs, and blockchain applications. With its transition to proof-of-stake and ongoing scalability improvements, Ethereum remains a dominant force in the market.
- Solana (SOL) – Known for its high-speed transactions and low fees, Solana competes as a next-generation smart contract platform. This growth makes it appealing for both long-term investors, who see its potential, and short-term traders, who capitalize on its volatility.
- Cardano (ADA) – Designed for security and scalability, Cardano’s research-driven plan appeals to investors looking for a sustainable blockchain network. Its focus on interoperability and real-world applications could drive adoption.
- Polkadot (DOT) – Instead of operating as a single blockchain, Polkadot connects multiple networks, allowing them to share data. This cross-chain compatibility makes it a valuable asset for blockchain interoperability.
Regardless of which cryptocurrencies investors choose, the best crypto investment platforms depend on individual needs—whether prioritizing security, liquidity, or ease of use. Selecting the right platform ensures reliable transactions and aligns with an investor’s strategy.
Building a balanced investment portfolio
For those looking to build a balanced portfolio, Mintos offers a range of investments beyond crypto, including loans, bonds, passive real estate, and ETFs, providing stable returns and diversification outside the crypto market.
Investment options on Mintos
✔ Loans – Earn regular interest payments, diversify across sectors and regions, and choose between automated or hands-on investing.
✔ Bonds – Invest from €50, earn fixed returns, and benefit from fee-free investing. A great option for those looking for steady, passive income.
✔ Passive real estate – Generate monthly rental income from property-backed investments with a lower entry point than direct ownership.
✔ Smart Cash – Access an AAA-rated money market fund that offers higher interest than traditional savings with same-day withdrawals and no fees.
✔ ETFs – Invest in ETFs globally with a single portfolio, enjoy diversification, and zero commission fees, starting from just €50.
Disclaimer
This is a marketing communication and in no way should be viewed as investment research, advice, or a recommendation to invest. The value of your investment can go up as well as down, and you may lose part or all of your invested capital. Past performance of financial instruments does not guarantee future returns. Investing in financial instruments involves risk; before investing, consider your knowledge, experience, financial situation, and investment objectives.
Any scenarios or examples provided are for illustrative purposes only. They do not guarantee specific outcomes or returns and should not be relied upon when making investment decisions. Actual results may vary based on market conditions, issuer performance, and other factors.
