The crypto market is an emerging asset class.
Although major financial institutions embrace top cryptocurrencies with established brokerage channels for private investors — the road is yet to be paved for retail investors. Without a guiding hand, the crypto market may appear daunting to first-time crypto investors as thousands of crypto coin tickers flash across your screen.
Luckily, our beginner’s guide to long-term crypto investing is here to help you get your new portfolio on track. From buying crypto to safely storing it for the long haul, you’ll learn everything you need to jumpstart your first crypto portfolio below.
Create an account with a crypto exchange or investment advisor
The first step to any long-term crypto investment portfolio is to create an account with a top crypto exchange or investment advisor.
What is a crypto exchange?
Cryptocurrency exchanges are gateways to the 24/7 crypto market.
Similar to opening an online brokerage account, you’ll need to provide personal information and banking details. Overall, you must sign up with a reputable crypto exchange that legally operates in your country.
The top crypto exchanges in the United States that are best for beginners are:
What is a crypto investment advisor?
A crypto investment advisor is a service that buys, sells, and manages your entire crypto portfolio.
If you’re coming from the traditional stock market, using crypto investment advisors may not feel like such a giant leap. From curated baskets of crypto coins to personalized risk tolerance, you’ll have complete control of your long-term crypto account without having to fiddle with the actual process of buying, selling, and storing your crypto coins.
Do your research
Whether investing in mutual funds, bonds, or crypto, you must perform your due diligence to understand the investment's potential upside, risk, and compatibility.
Due diligence comes in the form of understanding the fundamentals of crypto. In other words, doing your own research will give you the who, what, when, where, and why that will ultimately shape your crypto investment thesis.
The best strategy to learn about the basics is to take a short crash course on crypto. Once you grasp the core values of crypto, it’s time to research the most popular cryptocurrency projects.
Whether you’re interested in decentralized finance (DeFi) projects or top coins like Bitcoin or Ethereum, educating yourself before investing is a necessary step that you’ll need to take.
Once you’ve signed up on a reputable cryptocurrency exchange or a registered investment advisor and completed your due diligence — it’s time to buy crypto.
The amount of money you invest in crypto is your choice, and you should always follow the golden rule of never invest more than you’re willing to lose. Whether you invest $500 or $50,000, your investment should be backed by an in-depth understanding of the cryptocurrencies of your choice.
Store your crypto
Now that you’ve bought crypto — it’s time to store it for the long haul.
Depending on your route, you’ll either self-custody with a personal crypto wallet or have an investment advisor act as a custodian. Both options have their pros and cons, which we’ll discuss further below.
Storing your crypto in a personal wallet
If you bought crypto on an exchange, you don’t want to leave it there for the long term.
Instead, you must transfer it to a personal wallet only you can access. Although a personal crypto wallet (i.e., hardware wallet or desktop wallet) is very safe, there are a few downsides to be aware of.
Pros of leaving your crypto on a personal wallet
- Relatively user-friendly design once set up
- Complete control over your crypto investment
- Most secure method to store your crypto for the long-term
Cons of leaving your crypto on a personal wallet
- You’re responsible for any mistakes
- Learning curve
In the case of being your own bank, storing crypto in a personal wallet is one of the best but most technical options. From safely hiding your private keys to avoiding crypto scams, using a personal wallet is a big responsibility that requires your utmost attention.
Storing your crypto with an investment advisor
If you’ve signed up with a crypto investment advisor, you’ll be presented with a much easier learning curve — especially if you have experience with online stock brokers and investment firms.
Crypto investment advisors allocate your funds into crypto tokens that fit your financial ambitions and risk tolerance. Once complete, the investment advisor secures your crypto portfolio, so you don’t have to.
Pros of storing your crypto with an investment advisement firm
- You are not responsible for storing your crypto investment
- Easy to withdraw at any time
Cons of storing your crypto with an investment advisory firm
- You do not have complete control over your crypto investment
Hold crypto for the long-term
Once you’ve successfully stored crypto on a personal wallet or with a trusted investment advisor — it’s time to kick back and relax.
Holding crypto as a long-term investment is the best way to maximize your gains while minimizing risk. Similar to traditional stocks and bonds, your investment horizon should span decades — not months.
Crypto is an emergent technology that’s taking the financial world by storm, making it a solid long-term investment alongside traditional stocks, bonds, and mutual funds. As a beginner in the world of crypto, an investment advisor with deep knowledge of the crypto industry will help your portfolio get in ship shape and ready to sail towards a bright future.
Shrimpy is providing an endorsement of Shrimpy Advisory. Shrimpy and Shrimpy Advisory are affiliated companies. A conflict of interest exists because Shrimpy Advisory will be compensated if a client utilizes Shrimpy Advisory’s services.