March 18, 2025
While investing in cryptocurrency is said to be riskier than traditional assets like stocks, bonds, and mutual funds, it doesn't have to be if you approach it with the right knowledge and guidance. If you take the time to understand how the market works and get the right advice, you can navigate the risks more effectively. It's important to be well-informed before diving in fully.
In this article, the Sperax Team will cover all the essentials that beginners need to know about cryptocurrency investment. We'll explore how different digital currency types function and the best options for new investors. Additionally, we'll offer a step-by-step guide on how to start investing in crypto.
Continue reading to discover valuable tips and strategies detailed in this guide that will assist you in learning about crypto investing and making a well-informed investment decision. But first, we should know what a cryptocurrency is.
What is Cryptocurrency?
Cryptocurrency is a type of digital or virtual currency that uses cryptography for security. Unlike traditional currencies, it operates on decentralized networks based on blockchain technology, which is a distributed ledger that records all transactions. This means no central authority controls it like a bank or government. Popular cryptocurrencies include Bitcoin, Ethereum, and Litecoin. Cryptocurrencies can be used for various purposes, including online purchases and investments, and as a way to transfer money across borders quickly and securely.
These digital currencies, often called coins or tokens, are generated through a validation process that utilizes blockchain technology.
Blockchain is a versatile tool with applications far beyond just cryptocurrencies. It's also referred to as distributed ledger technology and works by creating a secure, encrypted log of each virtual coin's value and every transaction linked to it. These records are spread out and interconnected across the network of users or computers with access to the blockchain. Someone with an internet connection can access it. The designers of this system prioritized security, transparency, speed, and precision.
Although government regulations are absent from the cryptocurrency market, they are taxable assets. You may need to file any profit or loss with the Internal Revenue Service (IRS).
How are Cryptocurrencies Created?
Mining refers to the process of generating new cryptocurrency. It involves validating crypto transactions, ensuring their legitimacy, and subsequently minting new digital coins. This process relies on specialized hardware and software to record these transactions on the blockchain.
However, it's important to note that not every cryptocurrency originates from mining activities. Instead, developers bring them into existence via a mechanism known as a hard fork. A hard fork splits the blockchain into two distinct paths. One that adopts the new changes and another that sticks to the original rules.
Types of Cryptocurrency
Cryptocurrencies come in two primary forms: coins and tokens. The key distinction lies in how they operate. Crypto coins have their own separate blockchain and function primarily as digital currency. On the other hand, crypto tokens are built on top of an existing blockchain, which serves as a platform for creating and executing decentralized applications (dApps) and smart contracts. These tokens facilitate transactions within a blockchain ecosystem and often originate through Initial Coin Offerings (ICOs) before transitioning into their functional roles after completing the ICO phase.
On the other hand, crypto tokens, including utility tokens, are designed to facilitate transactions or provide access to specific services within a blockchain ecosystem. Additionally, stablecoins offer price stability by being pegged to assets like fiat currency, while Central Bank Digital Currencies (CBDCs) are government-issued digital currencies operating on blockchain technology.
Bitcoin was the first cryptocurrency and is still the most traded in the market. The second most valuable is Ethereum, which is used for more complicated transactions. Other popular cryptocurrencies, known as altcoins, include Cardano, Solana, Dogecoin, and XRP. The following list shows the top seven cryptocurrencies in terms of market capitalization as of 01.03.25.
Bitcoin (BTC)
Ethereum (ETH)
Tether (USDT)
XRP
BNB
Solana (SOL)
USDC
Now that we have learned the types of cryptocurrencies. Let's understand how crypto works.
How Does Cryptocurrency Work?
Cryptocurrency, often just called crypto, is a type of digital currency. Bitcoin and Ethereum are two of the most well-known players in the crypto world.
Most cryptocurrencies operate on a decentralized network that's powered by blockchain technology. Think of blockchain as a shared, public record-keeping system that's really hard to mess with. Because of this, it's virtually impossible for crypto owners to counterfeit their holdings or spend them twice.
They can be a different way to pay for things you buy or services you use. These digital assets can also be your ticket to joining specific platforms, like online games or certain financial products. Some people also see them as a good way to make speculative investments.
Also Read: Idea Paper: Yield Optimization on Stablecoins on Arbitrum Chain
How To Start Investing In Crypto: A Step-By-Step Guide For Beginners
Cryptocurrencies are known for their unpredictable swings, making them a better fit for seasoned investors who are comfortable with a lot of risk. However, that doesn't mean crypto is entirely off-limits to newcomers. Just as with traditional investments, it's wise to begin with a small amount and only use money you wouldn't miss if it disappeared.
If you're new to the world of digital assets, here's a quick, step-by-step guide on how to start investing in cryptocurrency.
Learn about the various key factors before investing in cryptocurrencies.
Select a platform for crypto trading.
Set up your crypto trading account and put money into it.
Decide which cryptocurrency you want to invest in.
Explore earning opportunities beyond trading, such as staking, auto-yield with USDs, or liquidity farming for passive income.
Keep your crypto investment somewhere safe.
Is that too fast? Let's take a closer look at the process.
Step 1: Learn About The Various Key Factors Before Investing in Cryptocurrency
The cryptocurrency market is flooded with thousands of options, and new ones are constantly emerging. This can make it incredibly daunting for investors, particularly those just starting like you, to decide where to put their money.
Just like with stocks or bonds, figuring out which digital currency aligns with your comfort level, risk, and financial goals takes some serious homework. Look at the main factors you should consider when hunting for the best cryptocurrency investments.
Market Capitalization: This gives you an idea of how much people use and put their money into a cryptocurrency. The bigger the market cap, the more popular and trustworthy a crypto is to invest in - generally, but not always.
Technology And Project Goals: Every digital currency is backed by unique technology and has a specific purpose for its creation. This information is thoroughly explained in its white paper. Knowing the reason behind a cryptocurrency's existence can assist you in determining if it aligns with your investment objectives.
Development Team: A solid development team is key to a healthy cryptocurrency investment. It's worth putting in your efforts to look into the people behind a cryptocurrency to see what they've accomplished in the past.
Regulatory Requirements: SEC and CFTC each play a significant role in defining and enforcing regulations. The SEC oversees the securities, and the CFTC regulates commodities. The rules for investing in crypto differ in each province and territory. It's a good idea to learn these rules so you can be sure your investment is safe and in compliance with the law. Check if the platforms adhere to regulations, including Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements.
Warning: Market Capitalization is subject to risk, so you should make any investment cautiously and after thorough research about the crypto you want to invest.
Now that you have understood the key factors to look for, it's time to move ahead and find a suitable platform.
Step 2: Select A Platform For Crypto Trading
To start with cryptocurrency, you must choose a broker or crypto exchange. Think of an exchange like a digital marketplace as a platform where you can buy, sell, and trade different cryptocurrencies. On the other hand, brokers act as middlemen, using their own user-friendly interfaces that connect to these exchanges behind the scenes.
Using an exchange means you're cutting out the third party and trading directly. But that also means you must find buyers and sellers for your crypto yourself. A broker takes care of that matching process for you.
Here is a list of the top firms on Forbes' third annual Best Crypto Exchange ranking and top Cryptocurrency Spot Exchanges that are globally used:
1. CME Group (#1): It is a Chicago-based CME Group valued at $85 billion and has strong regulatory backing from the CFTC.
2. Coinbase (#2): It is the most publicly traded U.S. crypto exchange. Coinbase holds $245 billion worth of Bitcoin and has 8 million active users. It is known for its strong asset security and remains a trusted choice for retail investors.
3. Bitstamp (#3): It is a UK-based platform and leads in Europe.
4. Binance (#4): Binance, the world's largest exchange, remains dominant despite legal challenges, boasting 245 million users and a $14 billion daily trading volume.
5. Robinhood (#5): It is predominantly oriented toward stocks and options expanding beyond stocks; Robinhood now holds $15 billion in DOGE and has acquired Bitstamp for $200M, signaling industry consolidation.
Other major players on the list are Kraken, Bybit, OKX, Gemini, Crypto.com, and Fidelity.
Kraken (#11): Kraken, a U.S. company, manages over $30 billion in client assets. They offer a wider range of products and lower fees than competitors like Coinbase. The firm has been actively seeking strategic acquisitions, particularly in the area of launching an offshore derivatives business.
Bybit (#16): Dubai-based Bybit, a major crypto provider known for high trading volumes, has shifted toward greater regulation. It has secured licenses in the Netherlands, Turkey, and Canada, though a significant portion of its 26 million visitors come from the Russia-Ukraine region. However, its earlier approach of operating without licenses led to blacklisting in France, a ban in Hong Kong, and a temporary suspension in India. Bybit’s popularity largely stems from its low fees, which are comparable to Binance and OKX.
OKX (#17)
OKX, formerly known as Ok Coin, wasn't part of the Forbes survey, but its recent shift towards a more regulated structure and its significant size made them impossible to ignore for the rankings. The company has secured regulatory approvals in France, Turkey, Dubai, Singapore, and Australia and even became a sponsor of the McLaren Formula 1 team. As of November 2024, OKX manages at least $15 billion in Bitcoin and Ethereum, and its website has over 22 million unique visitors.
You could also follow the top Cryptocurrency Spot Exchanges list to decide to choose the platform.
The above lists will give you an idea of where to start. Once you have decided on the platform, you can set up your crypto trading account.
Step 3: Set Up Your Crypto Trading Account
After settling on a crypto trading platform, the next step is to open an account. Although the specifics can differ between platforms, you'll generally be required to verify your identity and link a funding source. There are multiple methods for adding funds to your account, such as:
wire transfers
e-transfers
credit card
debit card
Depending on your funding method, you may need to wait a few days for it to clear into your crypto account.
Step 4: Buy Crypto
Once your account is up and running and verified, you're all set to make your first crypto purchase! You'll see a bunch of choices available to you. Whether you want to buy a large amount or just a little bit, it's totally up to you. After picking the cryptocurrency you want to begin with, just enter its ticker symbol and the quantity you wish to buy. Here are a few examples of popular cryptocurrencies and their symbols:
Bitcoin (BTC): Bitcoin is widely regarded as the world's first cryptocurrency. Since its launch in 2009, it has been a driving force behind the evolution of blockchain technology, helping to build it into a multi-billion-dollar powerhouse. Bitcoin's growth has been explosive since its first appearance, and it has even managed to surpass just about every other type of asset in performance over the last few years.
Ethereum (ETH): Ethereum is considered one of cryptocurrency's most easily tradable investment assets. It is readily available worldwide on crypto exchanges, trading platforms, and online brokerages. Swapping Ethereum for cash or other assets like gold is a breeze, and the fees are minimal.
Sperax (SPA): It is a blockchain-based project focused on decentralized finance (DeFi) solutions, particularly in the stablecoin and yield-bearing asset space. It is built on the Arbitrum network and also has a stablecoin yield aggregator called USDs within its ecosystem. Want to know more about USDs? Visit Sperax or join the X community for continuous updates.
When discussing cryptocurrency, it's crucial to understand the roles of crypto wallets and DEXs. These platforms form the foundation for securely holding and trading digital assets. Crypto wallets store, send, and receive digital assets, with non-custodial options offering complete control over private keys. Meanwhile, decentralized exchanges (DEXs) enable direct, peer-to-peer trading using smart contracts, making sure greater privacy and security.
Other types of cryptocurrencies that you can consider after investing:
Dogecoin (DOGE)
Tether (USDT)
USD Coin (USDC)
Uniswap (UNI)
Binance Coin (BNB)
Cardano (ADA)
Solana (SOL)
Tron (TRX)
XRP (XRP)
Note: The above mentioned coins are for reference only. You should do your own research before investing.
Cryptocurrencies operate uniquely, making investing in them a complex endeavor, particularly for those new to the game. If you're not fully equipped to tackle crypto investments alone, consider reaching out to Sperax through our Telegram and Discord channels and start earning.
Step 5: Smarter Ways to Grow Your Crypto
Crypto investing is more than just trading. There are intelligent, lower-risk methods to increase your assets. Staking allows you to earn rewards by helping to secure a network, while auto-yield with USDs offers a straightforward, hands-off method to generate passive income. Another choice is liquidity farming, which enables you to earn yields without the need for constant market surveillance. Start earning effortlessly with Sperax. Just stake, gain, and grow your crypto with ease! Get Started Now.
Step 6: Select A Storage Method
Typically, you'll keep your cryptocurrency in a digital wallet.
Hot wallets: Hot wallets are crypto wallets that you can access online via your computer, phone, or tablet. However, online access has a drawback: it's more exposed to cyber-attacks than other options.
Cold wallets: A cold wallet is like a physical vault for your crypto. It's not linked to the internet, so it's more secure. You can store your cryptocurrency on something like a USB drive. When you set it up, you'll receive a keycode to keep in a safe place. It's essential to keep this code safe because if you lose it, you could be locked out of your wallet and lose all your cryptocurrency.
Also Read: Ways to Make Money with Cryptocurrency in 2025
With these above steps, you will be able to start investing in cryptocurrencies. But if you want to learn about crypto investing with peace of mind, then keep the following eleven rules in mind:
Eleven Rules Of Crypto Investing in 2025
The world of cryptocurrency offers some exciting opportunities, but it also comes with challenges and risks that you won't find in more traditional markets. When you're first starting out, things like wild price swings, complicated technology, and unclear regulations can feel overwhelming. However, if you stick to some basic rules, which include spreading your investments around, keeping your assets safe, averaging out your purchases over time, and focusing on substantial projects. You can include crypto in your investment mix responsibly.
1. Only Invest What You're Willing To Risk
Cryptocurrencies are still relatively new, and their value can fluctuate wildly, shooting up or crashing down dramatically in just a day. Even though they've generally been on an upward trajectory, there's still a lot of uncertainty and a fair bit of get-rich-quick sentiment surrounding them.
Because of this, the most crucial rule is only to put in money that you're completely okay with losing if the market decides to nosedive. You should have a solid rainy-day fund before putting cash into crypto. And once you're ready to take the plunge, keeping your crypto holdings to no more than 5% of your total investments is wise. That way, you're in the game enough to score significant gains, but a wipeout won't completely wreck your whole portfolio.
2. Research And Stick To The Fundamentals
When considering a cryptocurrency investment, you'll want to use a different set of criteria than you would for the stock market. This often includes evaluating the potential for real-world use, examining the technical details, looking into the backgrounds of the founders and developers, gauging the level of community involvement, and analyzing the competition.
It's generally a good idea to lean towards projects that have stood the test of time or those that provide unique features that aren't easily replicated and show signs of widespread adoption. Be cautious of assets that are based solely on speculation without any substantial underlying value.
Some key factors to investigate are the token's utility, the speed and scalability of transactions, the network's security, the team's transparency and experience, and any competitive edges it holds over other cryptocurrencies.
3. Use Dollar-Cost Averaging
For your crypto investments, consider using a method called dollar-cost averaging. This means you buy small amounts of crypto regularly, say each week or month, instead of making one big purchase. Set up automatic buys on an exchange so you don't have to remember to do it yourself every time.
This approach helps you steadily grow your crypto holdings without getting caught up in trying to guess the best times to buy. Since crypto prices generally increase over time, the value of what you buy will likely increase, making the price ups and downs less of a worry. Of course, if the market takes a big dip, you can always buy a bit extra then.
4. Stick to the Major Crypto Currencies
Significant, established crypto assets like Bitcoin and Ethereum enjoy first-mover and adoption benefits, have large market capitalization, and are tied to a series of financial products built on top of them, such as ETFs and derivatives markets. These well-known coins have weathered several significant market cycles and downturns.
While risks remain, more significant cryptocurrencies (by market cap and trading volume) have generally demonstrated their resilience, unlike newer or smaller-cap coins. However, if the chance arises, consider rebalancing periodic profit-taking from major assets into promising newer projects with real-world utility. Avoid heavily overweighting major cryptos relative to your overall investment portfolio size and risk tolerance as with any particular asset or security.
5. Use Safe Storage
If you're holding onto a significant amount of cryptocurrency, it's best to move it from the exchange to either a hardware wallet or a reputable crypto custodian for long-term storage. Popular hardware wallet options are Trezor and Ledger, and some software wallets like Electrum are also deemed safe. These methods offer enhanced security features such as offline storage, encryption, PINs, multi-signatures, recovery phrases, and tamper resistance.
Your recovery phrase should be kept in a very secure location, such as a safe or a bank vault. Avoid storing your recovery phrase digitally; if you absolutely have to, make sure it's encrypted or protected by a password. Be cautious when typing in sensitive wallet information on any device. Always use strong, unique passwords and seed phrases, plus make sure you have secure backups.
6. Take the Time to Understand the Technology
Take some time to delve into the technical foundations that drive various cryptocurrencies. Understanding the intricacies of blockchain networks' consensus mechanisms, such as proof-of-work, proof-of-stake, hash algorithms, and smart contracts, will give you a clearer picture of a project's potential.
Getting a handle on the fundamentals of cryptography can also aid in comprehending the capabilities of innovations like zero-knowledge proofs. Keep abreast of new technological advancements in the field by following reputable industry news sources and blogs that aren't tied to any specific crypto you've invested in.
7. Employ Objectivity
When you're looking at crypto investments, try to stay neutral and level-headed. Don't let yourself get swept up in the "fear of missing out" (FOMO) or get drawn in by trendy meme coins or the latest hype. Also, steer clear of any assets that promise quick riches, guaranteed returns, or anything that just sounds too good to be true - because it almost always is.
It's important to spread your investments around and not put all your eggs in one basket. Don't go all in on crypto. Before you make any decisions based on crypto news, double-check the information to make sure it's accurate. Remember, crypto investing is still a pretty risky business, so be prepared to cut your losses if the market shifts. If you're unsure, consider talking to a financial advisor who charges a fee for their services - they can give you personalized advice based on your specific financial picture and what you're aiming for.
8. Pay Attention to Regulations and News
Follow relevant legal cases and regulatory developments, as well as legislative proposals related to crypto, both domestically and abroad. Major regulations can significantly affect prices and adoption. For example, when China banned crypto mining in 2021, many miners moved their operations. Stay on top of governance changes enacted by blockchain projects and the posturing of politicians and their promises. These can substantially alter staking yields, development funding, and other dynamics.
9. Use Crypto Indicators to Inform Decision-Making
While crypto's volatility makes accurate predictions impossible, tried-and-true technical indicators like moving averages, relative strength, and crossovers can provide valuable signals. Moving average crossovers, for instance, may identify momentum shifts. Crypto-specific indicators like on-chain activity, average transaction fees, addresses by time held, and so on are also important.
Assessing indicators can help you better time your entries and exits. Combine technical and blockchain-based analysis for a more complete perspective. Always maintain a long-term outlook rather than reacting to daily price swings.
10. Stay Disciplined
Create a robust, rules-based framework. A systematic approach based on predefined criteria helps prevent costly emotion-driven decision-making. Continually refine your portfolio and strategy based on lessons learned. Remain flexible and open to new information rather than rigidly locking yourself into any one system.
11. Protecting Access by Avoiding Phishing Scams
Cybercriminals frequently use phishing emails, fake websites, and fraudulent links to steal login credentials. Always double-check website URLs, enable hardware-based authentication, and avoid clicking on suspicious links.
The above rules will help you to learn about crypto investing and make the most of your crypto investments in the future. Moreover, proper investment comes with the following advantages:
What are the Advantages of Cryptocurrency?
There are some advantages to cryptocurrency over traditional currency. An advantage of cryptocurrency is privacy. When you make a cryptocurrency purchase, you don't need to provide any personal information. This protects you from potential identity theft and other fraudulent activities. And no matter what happens to the government, your investment is secure.
Another advantage of cryptocurrency is that it's global, so there's no need to figure out or pay foreign exchange rates, although cryptocurrency isn't legal in some countries. You also don't need to worry about bank account restrictions, such as ATM withdrawal limits. Ready to get started? Visit Sperax and start earning.
Conclusion
Cryptocurrency is both a virtual currency and an investment asset driven by decentralized blockchain technology. With thousands of options like Bitcoin and Ethereum, investors must assess volatility, risks, and long-term potential. A more structured approach, like starting with thorough research, choosing a secure exchange, selecting proper storage solutions, and implementing sound risk management strategies, is essential for navigating this dynamic space. Security is crucial, requiring reputable platforms and phishing protection. Successful investing involves consistent strategies, avoiding speculation, and portfolio monitoring.
Beyond direct crypto investments, opportunities related to ETFs and blockchain technology stocks provide diversified exposure.
Additionally, platforms like Sperax allow you to earn automatic yields on stablecoins just by keeping them in your wallet, with minimal gas fees. Connecting your crypto wallet to Sperax lets you easily set up auto-yielding or dive into DeFi farming. With DeFi farming, you can benefit from earning higher returns by providing liquidity to decentralized finance protocols, helping to grow your crypto while maintaining control over your assets.
Ready to start your crypto journey? Explore Sperax and take the first step toward informed yielding today!
FAQs
Q. Can you make $100 a day with crypto?
Day trading is all about making the most of the market's ups and downs daily. If you can spot those little price changes and jump on them quickly with well-timed trades, you might be raking in an extra $100 daily. But it's not a passive gig; you must keep a close eye on the market and be ready to make prompt decisions. However, day trading's fast pace brings its own risks, like high volatility and emotional decisions based on feelings, which brings in the possibility of losing big if things don't pan out. So, do your research before investing.
Q. How much is one bitcoin?
92,727.50 USD as of 3 Mar 2025, 4:26 am UTC.
Q. Can I buy 1 Bitcoin?
Investors can buy less than a whole Bitcoin.
Q. Is it possible to buy one Bitcoin or less?
Yes, it is possible. You can buy less than a whole Bitcoin.
Q. Who invented Bitcoin?
Based on a free-market ideology, bitcoin was invented in 2008 by Satoshi Nakamoto.
Q. What is Sperax USD?
Sperax USD is a stablecoin yield aggregating protocol that generates auto-yield natively. Currently, USDs is available on Arbitrum, Ethereum's most extensive Layer-2 Ecosystem.
