How To Invest In Cryptocurrency In 2023 – Beginner’s Guide

Do you want to learn how to invest in cryptocurrency for beginners? This comprehensive guide will teach you everything you need to know about crypto investing. By the end of this guide, you will have learnt where to buy crypto altcoins, the best exchanges today, how to research undervalued crypto, and the best crypto to buy and invest in 2023.

Crypto investing, if done correctly, is one of the most effective ways of building long-term generational wealth. It is the cornerstone of financial independence. And millions across the world have relied on them for over a century to own a percentage of highly profitable companies and grow their capital in the process.

But how do you start investing in crypto online today? Here is a detailed beginner’s guide to cryptocurrency investing in 2023.

How to Invest in Cryptocurrency – 4 Quick Steps

 

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

Where To Invest in Crypto Assets In 2023 – Best Platforms

To help you get started with buying new crypto assets, we have analyzed tens of legit cryptocurrencies before singling out five of what we consider the best places to invest in cryptocurrencies in 2023.

Let us go over each of these best crypto altcoin exchanges 2023 below. We will highlight the reasons why they made it here and explain why you too should consider registering with either.

1. eToro - Overall Best Place to Invest In Cryptos 2023

eToro tops our list of best exchanges to invest in cryptocurrencies this year because of its user-friendliness and commitment to the safety of client data and cryptos.

For starters, the exchange that began as a forex brokerage runs a highly intuitive crypto trading platform that appeals to both novice and expert crypto traders. To draw in beginner crypto traders, eToro has oversimplified the account creation process, made its user interface as intuitive as possible, simplified the crypto buying process, and instituted affordable deposit and trade minimums. Here, you can start investing in crypto at $10.

To draw in expert traders, eToro has integrated advanced analytics and risk management tools into its trading platform. It maintains some of the fastest order execution speeds, is transparent with its already competitive fees, and maintains adequate liquidity.

In addition to these, eToro integrates social and copy trading tools. Social trading creates a platform where traders can interact with one another, share trade and research ideas, and for beginner traders to gain mentorship. On the one hand, copy trading lets novice traders mirror popular investors' trade settings - allowing them to make money while they learn how to trade. On the other hand, Pro traders earn passively as they receive 20% of the profits from their copied trades.

You, too, may consider eToro the best place to invest in cryptocurrencies because of its commitment to the safety of client data and digital assets. The exchange does not share sensitive client information with third parties. It also provides all its platform users access to a custodial wallet and a mobile wallet app.

Not forgetting that eToro supports a wide range of cryptocurrencies and tokens. At the time of writing, you can buy 75+ cryptocurrencies on eToro.

Crypto asset investing is highly volatile and unregulated in some EU countries and the UK. No consumer protection. Tax on profits may apply.

2. Crypto.com - Best Place to Invest in Cryptocurrencies for High Passive Incomes

We feature crypto.com among the best exchanges to invest in cryptocurrencies in 2023 because of its integrated DeFi coins and programs that let you earn passively. For starters, Crypto.com lets you buy 250+ cryptos and stablecoins on the platform.

Most of these can also be staked on the exchange via the Crypto.com staking program. This rewards interests of up to 14.5% p.a. for staked cryptocurrencies and up to 8.5% on stablecoins. It, therefore, lets traders earn doubly - from value gain for the crypto and staking rewards.

Other reasons why you should consider trading cryptocurrencies on Crypto.com include the fact the exchange maintains a smooth client onboarding process. It, too, maintains affordable deposit/trading minimums at $20. The exchange also maintains highly competitive trading fees.

When investing and trading cryptocurrencies on Crypto.com, for instance, you will only have to pay the maker/taker fee of between 0.4% and 0.1%. But if you had staked at least 5000 CR tokens - you qualify for a 10% discount.

Crypto asset investing is highly volatile and unregulated in some EU countries and the UK. No consumer protection. Tax on profits may apply.

3. Binance - Best Place to Invest in Cryptocurrencies 2023 at Low Fees

Binance is the largest crypto exchange in the world. It is also the most liquid crypto trading platform - processing crypto trades worth more than $90+ Billion daily. Like virtually all other popular crypto exchanges, Binance has oversimplified the client onboarding process. It operates a highly intuitive crypto trading platform and has also simplified the process of buying crypto.

But we include it on our list of best exchanges to invest in cryptocurrencies 2023 primarily because of its ultra-low and heavily discounted transaction fees. When buying crypto on Binance, you will only be charged a fixed maker/taker fee of between 0.1% and 0.04% - based on your 30-day trading volumes. And if you choose to settle this trading fee using BNB coins, you get to qualify for a 25% discount - bringing the cost of trade on the platform down to between 0.75% and 0.03%.

There are numerous other reasons why you too should add Binance to your list of best places to invest in crypto assets. First, Binance lists the widest range of cryptocurrencies and an extensive pool of crypto pairs. Secondly, Binance provides all its platform users with free crypto storage services. Here, you can choose the exchange-based custodial wallet that holds coins in offline vaults of the non-custodial Trust mobile wallet app.

Additionally, Binance operates the largest crypto-focused insurance fund - currently exceeding $1 Billion. This, according to Binance - is set aside to reimburse its platform users should a network breach result in loss of client funds.

Crypto asset investing is highly volatile and unregulated in some EU countries and the UK. No consumer protection. Tax on profits may apply.

4. Coinbase - Best Place to Buy Cryptocurrencies Instantly in 2023

Coinbase is an equally popular and crypto exchange. It stands out from the rest of the crypto trading platforms because of its pro-regulation stance and also due to the fact that it is the only publicly-traded crypto exchange today. But we include it in the list of best exchanges to buy cryptocurrencies in 2023 because it supports instant trading.

In addition to maintaining an easy onboarding process, Coinbase runs one of the most intuitive trading platforms. And in here is the buy instantly feature that lets you buy any supported cryptocurrency with fiat or other cryptos right away i.e., without having to add the trade to the order book. And we might add that Coinbase supports a wide range of cryptocurrencies and their trading pairs.

You, too, might want to consider investing in cryptocurrencies via Coinbase because of its commitment to securing client funds and data. The exchange doesn’t share sensitive client information with third parties. It also gives users access to a custodial wallet that holds 98% of their coins in offline vaults. In addition to this is the non-custodial Coinbase wallet app.

Another reason you might want to ad Coinbase to your list of best places to trade cryptocurrency in 2023 is that it is a multi-platform exchange. You can access your Coinbase crypto account on your PC at home. And you can also manage your crypto portfolio while on the move via the Coinbase mobile wallet app. Not forgetting that both platforms have integrated highly advanced market analysis, trading, and risk management tools.

Crypto asset investing is highly volatile and unregulated in some EU countries and the UK. No consumer protection. Tax on profits may apply.

5. Kraken - Safest Exchange to Buy and Sell Cryptocurrencies

Kraken makes it to our list of best places to invest crypto coins this year because of its commitment to the safety of client data and digital coins. We especially liked the fact that, unlike most other exchanges, Kraken has never been hacked. According to the exchange, Kraken servers are under 24-hour surveillance by armed guards. On the other hand, client digital assets are stored offline and widely distributed in offline vaults.

But in addition to security, there are a few more reasons why you should consider buying and selling cryptocurrencies via Kraken. For example, the exchange appeals to both beginner and expert traders. This starts with a straightforward account registration process, a highly intuitive user interface, and affordable minimum deposit/trade limits - as low as $20.

It then extends the integration of useful educational content and a wide range of highly advanced analysis, trading, and risk management tools. Kraken will also let you buy cryptocurrencies instantly and boasts of maintaining some of the fastest order execution speeds.

We also appreciate that Kraken maintains relatively high trade limits for Intermediate and Pro traders - making it an excellent trading platform for high-volume crypto investors.

Crypto asset investing is highly volatile and unregulated in some EU countries and the UK. No consumer protection. Tax on profits may apply.

Cryptocurrency Investment Strategies

If you’ve never invested in cryptocurrency before then there are few things you need to know before you get started. As we’ve noted above, cryptocurrency investment is still seen as high risk, so it's important to do as much research as possible before you start building your portfolio. 

As with any other asset, there are a few ways in which you can invest in cryptocurrency in 2023.

1. Buy and forget

The simplest way to invest in cryptocurrency is what’s known in the industry as HODLing. This means you simply buy up a quantity of a particular token and hold it over time, as you would with a stock or bond, with the view that it will increase in value.

This is a highly accessible way of gaining exposure to the market and will also go some way in helping you understand exactly how some currencies work, as you’ll need to send your tokens to a wallet for storage and send them on when it comes time to sell. 

As we have seen, most tokens are worth considerably more after a number of years, so HODLing is a very valid means of investment. It also means that you actually own the asset outright, as opposed to derivatives trading wherein you trade a contract. 

2. Short-term trading

Due to its high levels of volatility, the cryptocurrency market has become an increasingly popular place for day and swing traders. Rather than buying a cryptocurrency and holding onto it over a number of years, traders will look to profit from small fluctuations in price over the short time. Day traders, for example, might have positions open for just a few minutes.

Trading differs from traditional investing in a number of ways. Firstly, traders can profit whether a cryptocurrency increases or decreases in value, by long selling or short-selling. This is made possible by the second major difference: traders generally don’t buy the actual asset, but trade cryptocurrency via CFDs.

CFDs are complex financial instruments and you should only consider trading cryptocurrency if you have conducted plenty of research and are in a position to understand the finer points of this approach to the financial markets.

Don't Miss: Cryptocurrency Investing vs Trading: What's the Difference?

3. Liquidity Mining

The plethora of DeFi platfoms on the market means that you can actually invest your cryptocurrency, in a manner of speaking. Projects like Aave, Compound and Maker require liquidity. This comes via liquidity pools and these are key to how such platforms operate.

Users can effectively lend their cryptocurrency to the liquidity pools, in exchange for fees based on the interest the platform charges for lending out your cryptocurrency to other users. Put simply, liquidity mining is a way of making cryptocurrency from cryptocurrency. 

Once again, liquidity mining can get complicated and you should make sure you fully understand how a particular DeFi platform works before committing your cryptocurrency to its protocols. 

4. The importance of diversification

Just as with any other form of investment, diversification is an important factor in putting together a well-planned cryptocurrency portfolio. Fortunately, the range of projects in the space has made this easier than ever before.

Firstly, if you are investing in other asset classes, then you’ll need to decide how much of your budget to dedicate to cryptocurrency. After this, you’ll want to choose which cryptocurrency to actually invest in. This is where diversification comes into play again.

Binance Coin and Tether, for example, are regarded as more stable than many other tokens. The former is the native currency of the world’s biggest decentralised exchange, whilst the latter is a stablecoin pegged to the US dollar. These factors help to reduce volatility. A project like Shiba Inu, on the other hand, is largely driven by popularity. Whilst this makes it less stable, in theory, it is also prone to more sudden, substantial price movements.

A good cryptocurrency portfolio will be balanced, with a few higher risk ‘punts’ along with several more prominent blockchain projects that have significant mainstream backing. 

Cryptocurrency has been one of the most exciting investment opportunities of recent years and things could be about to get even more interesting after 2021 saw more traditional financial institutions offering support for DeFi.

Another major development for crypto in 2021 was leading online payments platform Paypal started to support the buying and spending of Bitcoin, Ethereum, Litecoin, and Bitcoin Cash - giving over 350 million users access to cryptocurrency for real-world transactions. This means that cryptocurrency is continuing to step away from its ‘socially constructed’ value and making inroads as a legitimate and functional means of commerce. 

Inevitably, these developments have led to renewed interest in investing in cryptocurrency. In fact, cryptocurrency investment has never been more in-demand - as a record number of crypto wallets were opened in 2021. All things considered, the next 12 months could be very profitable for savvy crypto investors. 

However, if you’re new to cryptocurrency investment, or financial investment in general, you may be at a loss as to where to start. That is why we have put together the following guide on how to invest in cryptocurrency in 2023, which will tell you everything you need to know to start developing your portfolio. 

If you want to invest in crypto assets quickly and easily, with 0% commission, check out eToro Exchange!

Why Invest in Cryptocurrency in 2023?

After markets around the world were hugely disrupted due to the COVID-19 pandemic and the war in Russia and Ukraine, most economies have demonstrated a certain resilience and early indications have shown that they soon begin to bounce back when restrictions are lifted.

Economic recovery is a huge opportunity for investors and many are looking ahead to a successful year in 2023. Investing in cryptocurrency has, until recently, been seen as somewhat niche, but as we have already mentioned, things seemed to be changing in 2021, as an increasing number of mainstream investors and financial institutions turned their attention to digital currency. 

Whilst it may have once been viewed as a chaotic market, that only really held interest for day traders, Cryptocurrency investment is now viewed as a much more viable investment strategy and many high-level investors include at least one digital currency in their portfolio - a trend which is expected to continue in the coming months. 

Of course, the cryptocurrency market remains highly unpredictable, but if you’re prepared to take on a little risk and are looking for a developing market to invest in, now might be the perfect time to start investing in cryptocurrency.  

Crypto asset investing is highly volatile and unregulated in some EU countries and the UK. No consumer protection. Tax on profits may apply.

Top Cryptocurrencies to Invest in 2023?

How do you choose which cryptocurrencies to invest in in 2023? If you’re new to the crypto market, then we’d advise initially focusing on a few top tokens.

1. Bitcoin (BTC)

There’s no getting away from it, Bitcoin is by far the biggest cryptocurrency on the market. Since its launch in 2009, BTC has consistently held the top spot in terms of market capitalisation and, at the time of writing, one Bitcoin token is worth an impressive $46,000. Even if you’re completely new to cryptocurrency investment, you are likely to know Bitcoin. 

As an investment opportunity, BTC is arguably the first point of call for investing in cryptocurrency. Numerous industry experts have predicted big things for Bitcoin in 2023, including Citibank analyst, Tom Fitzpatrick, who believes BTC will soar past $300,000 in the coming years. As such, Bitcoin is a good option for your first cryptocurrency investment.   

Crypto asset investing is highly volatile and unregulated in some EU countries and the UK. No consumer protection. Tax on profits may apply.

2. Ethereum (ETH)

Next to Bitcoin, another cryptocurrency that has generated a lot of investor attention is Ethereum. With a market capitalisation approaching $450 billion at the time of writing, ETH has held the number two spot behind BTC for quite some time now. 

From a technical point of view, the Ethereum blockchain can do things that Bitcoin cannot. For example, whereas Bitcoin is simply a digital payment system, the Ethereum ecosystem allows for the creation of smart contracts and programmes, developed with its own programming language - as well as hosting its own native cryptocurrency, Ether. 

Looking ahead to 2023, a technical analysis conducted by LongForecast has Ethereum set to grow by over 200% in the coming year, which certainly makes Ethereum an investment worth considering. 

Crypto asset investing is highly volatile and unregulated in some EU countries and the UK. No consumer protection. Tax on profits may apply.

3. Binance Coin

Another big name in the cryptocurrency space is Binance Coin - the native token of the Binance Exchange. The Binance Exchange is the largest of its kind and has been known to handle around 1.4 billion transactions. Holders of BNB can pay for fees on the exchange as well as get access to preferential rates. Naturally, this means Binance Coin sees extremely high trading volumes. 

As of September 2020, Binance also has the binance Smart Chain - a highly advanced platform that has proven a hit with DeFi developers looking for seamless access to the Binance Exchange. BSC is probably the biggest rival to Etheruem when it comes to attracting DeFi to its platform, hosting several projects, including Venus, PancakeSwap and Linear Finance.

Binance Coin offers a degree of stability thanks to its parent exchange and the protocol has some exciting upgrades on the horizon that could help to push its value up across 2023. It is also one of the most widely listed tokens, making it a good choice for those just starting their journey into cryptocurrency investment. 

Crypto asset investing is highly volatile and unregulated in some EU countries and the UK. No consumer protection. Tax on profits may apply.

4. Dogecoin

Dogecoin is something of an anomaly in the cryptocurrency market. The project was actually started as a joke, a way of satirising the hype that surrounded the the cryptocurrency market back in 2013. However, Dogecoin’s quirky branding and lighthearted approach have not only allowet it to foster a notoriously loyal fanbase, but also seen become amongst the ten biggest cryptocurrencies of 2021.

It’s important to understand that DOGE is very much driven by its community and ongoing popularity thanks to support from several high profile figures, not least Tesla’s Elon Musk, who has tweeted about Dogecoin on numerous occasions - often sending its token price skyrocketing. Whilst Dogecoin does have solid technical credentials, it is somewhat dated when compared to other top projects.

Whilst Dogecoin is probable a higher risk investment than the other tokens we have discussed here, it’s a suitable option for new entrants to the cryptocurrency market as it has a relatively low token price. This means investors can acquire a greater holding of DOGE with minimal outlay. 

Crypto asset investing is highly volatile and unregulated in some EU countries and the UK. No consumer protection. Tax on profits may apply.

5. XRP

Ripple is sometimes known as the bankers’ cryptocurrency, as the system was set up to facilitate international funds transfers between financial institutions. Another mainstay of the top ten cryptocurrencies by market cap, Ripple is owned and operated by Ripple Labs and was launched in 2016. 

As it stands, most banks rely on SWIFT for inter-currency payments, which is quite a complicated and costly process, on some level involving the buying and selling of currencies. However, Ripple can provide a much faster, more efficiently and, most importantly, cheaper service. Several institutions have already entered into a partnership with the platform, including Santander, Standard Chartered and American Express.

The benefits of a protocol like Ripple should be obvious. Whilst the token price did take a hit in 2020 due to some regulatory difficulties, it has since gone on to recover well and many analysts are predicting growth in the near future. TradingBeasts, for example, has the token price of XRP increasing by up to 30% by December. 

Crypto asset investing is highly volatile and unregulated in some EU countries and the UK. No consumer protection. Tax on profits may apply.

How To Invest In Cryptocurrency In 2023 - Step-by-Step Guide

As promised hereinabove, here is the step-by-step guide to investing in cryptocurrencies on the all-popular eToro crypto exchange.

Step 1: Register a crypto account

On your browser, open the official eToro website and tap on the “Join Now” icon. Complete the user registration form that pops up here by entering such basic personal information as your name, email address, phone number, and country of residence. It will also inquire about your income sources and trading experience.

Step 2: Verify your account

eToro UK is regulated by the FCA, which requires it to subject its platform users to KYC and AML checks. It will, therefore, demand that you verify your identity before you can start trading.

Step 3: Deposit funds

Log in to your approved eToro crypto trader account. On the user dashboard, click on the “Deposit Funds” at the bottom right corner. A funding tab will pop up, choose one of the payment options available here and follow the prompts to fund the account. The minimum you can deposit is $10.

Step 4: Search for cryptocurrencies

On the user dashboard, click on the “Discover” icon and from the list of supported crypto assets - choose “Crypto.” eToro will then present you with a list of supported cryptocurrencies. Choose one or a couple of cryptocurrencies that you would like to invest in.

Step 5: Invest in cryptocurrencies

Hit the “Buy” button against the crypto you wish to buy and a trading tab will pop up. Customise the trade by indicating the number of coins/tokens you wish to buy or the amount of cash you wish to spend on these cryptos.

Crypto asset investing is highly volatile and unregulated in some EU countries and the UK. No consumer protection. Tax on profits may apply.

Managing Your Cryptocurrency Investment

Before you start building your cryptocurrency portfolio, it's important that you conduct your research thoroughly and understand what's involved with buying and selling different cryptocurrencies. However, once you’ve started making investments, it’s equally important that you keep a close eye on things.

A key part of learning how to invest in cryptocurrency in 2023 is understanding that the cryptocurrency market changes quickly. You need to learn about the particular project you invest in and how they might be affected by rival cryptocurrencies. 

You’ll also need to keep an eye out for any regulatory changes in the world’s major economies. Most countries are still figuring out how to deal with cryptocurrency and any new legislation can have a huge impact on the cryptocurrency market. 

As time goes on you’ll become better at spotting trends - just remember that the cryptocurrency market requires sustained attention - regardless of whether you are HODling or trading.

Conclusion - How To Invest In Cryptocurrencies 2023

Crypto investing doesn’t have to be complicated. You don’t even need prior trading experience to start buying crypto coins, especially when such popular brokerages as eToro support copy trading. They have also oversimplified the entire crypto investing process – right from account creation to portfolio creation.

In the above guide, we have discussed everything you need to know about investing in crypto today. We have also discussed how to pick crypto assets and introduced you to what our analysts considered the most popular crypto to invest 2023.

Want to start investing in crypto immediately? Start by registering a share investor account with a regulated broker like eToro, fund this account, identify the crypto asset you wish to invest and hit the ‘BUY’ option. 

As with any form of investment, never commit more than you can afford to lose and always stick to a plan and budget. Never be tempted to make high-risk investments in the hope they will offer quick returns and always ensure you are up-to-date with the latest market developments. 

eToro – Best Place To Invest In Crypto 2023

Virtual currencies are highly volatile. Your capital is at risk.