How To Start Investing In Cryptocurrency For Total Beginners

Updated: October 11, 2021
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You would have to be living under a rock to both not have heard about and developed an interest in cryptocurrency.

Crypto is changing how we think about money, transactions, investing, and so much more. And many financial experts predict that this is just the beginning of the crypto revolution.

The number one question people have about cryptocurrency is how can you buy and sell it? In this article we will cover the best platforms to buy and trade cryptocurrencies including:

  • Bitcoin
  • Ethereum
  • Cardano
  • Binance
  • Tether
  • And many more

Skip to the end of this article for FAQs on cryptocurrency in general that you might have. There is so much to know and learn!

Rating 5

Publicly traded cryptocurrency trading platform and one of the easiest platforms to buy and sell cryptocurrency.
  • Coinbase started in 2012 with the radical idea that anyone, anywhere, should be able to easily and securely send and receive Bitcoin
  • Today, Coinbase offers a trusted and easy-to-use platform for accessing the broader crypto economy
  • Coinbase is one of the easiest places to buy and sell cryptocurrency
  • Coinbase: the simple, safe way to buy, manage and sell your cryptocurrency
  • Buy crypto, sell crypto. Safe, fast and simple
  • Get $5 in Bitcoin when you sign up to Coinbase

Get Started With Coinbase >

Rating 4.8

Enables users to earn interest on their cryptocurrency holdings and borrow against it.
  • An all-in-one platform to buy, sell, earn, and store cryptocurrency
  • First of its kind: A BlockFi Rewards Visa Signature credit card where you can earn up to 3.5% back in Bitcoin with every purchase
  • BlockFi interest account that enables users to earn up to 8% APY on their cryptocurrency (think of this like a savings account that you earn interest on but for crypto)
  • Enables users to borrow money against your cryptocurrency at very competitive rates as low as 4.5% APY
  • Client services available to address any question and cater to users ranging from crypto beginners to experts
  • Just a few quick steps to start and manage an account
  • Of note, BlockFi interest accounts are unavailable in NY — Trading is unavailable in GA, HI, NM, NV, NY, and VT

Get Started With BlockFi >

Rating 4.1

Trade top cryptocurrencies using one of the most trusted platforms in investing.
  • Start trading cryptocurrency including Bitcoin, Ethereum, Dogecoin, Cardano, and 17 other coins
  • Requires just $10 to start
  • SoFi ensures that your cryptocurrency holdings are protected against fraud and theft
  • More coins are on the way to trade via the platform
  • Alongside trading crypto you can buy stocks, fractional shares, and ETFs within the platform, making it a one-stop-shop
  • Get $10 of free Bitcoin when you make your first trade

Get Started With SoFi Crypto Investing >

Rating 4.0

Trade between crypto, US Stocks, national currencies, and metals — like gold — all on one platform.
  • Invest, transfer, or send/receive cryptocurrencies, US stocks, national currencies, and metals like gold on one platform
  • Trade between holdings in one easy step
  • 27 national currencies, 58 cryptocurrencies, 50 US stocks, 4 precious metals available
  • Uphold’s Mastercard debit card supports payments via crypto, gold, equities, and national currencies
  • Automate trades by creating a recurring buy or sell order
  • It is free to send money to friends and family members
  • More than 6 million customers and growing

Get Started With Uphold >

Rating 3.8

Start buying and trading cryptocurrency with as little as $1.
  • This platform is known for giving people the ability to trade stocks commission free is also a leader in the crypto space
  • Buy and sell Bitcoin, Ethereum, Dogecoin and other cryptocurrencies 24/7
  • Trading of cryptocurrencies is commission-free (other platforms can charge up to 4%)
  • Start with as little as $1, and with the exception of Dogecoin buy parts of coins, for instance, .001 Bitcoin
  • Protects your cryptocurrency with industry-leading security, cold storage for most cryptocurrency custodied on Robinhood Crypto, and crime insurance

Get Started With Robinhood >

FAQs On Cryptocurrency

What Is Cryptocurrency?

Cryptocurrencies are digital currencies not associated with any specific nation or government as has been traditionally true for currencies. There are many different cryptocurrencies, and they work using a technology called the blockchain. Blockchain is a decentralized technology spread across many computers that manages and records transactions. Part of the appeal of cryptocurrencies for many people is the blockchain technology that supports them. Other people are trading cryptocurrencies seeing them as an investment opportunity. 

How Many Cryptocurrencies Exist?

Cryptocurrency is more than just Bitcoin., a market research website, there are more than 10,000 cryptocurrencies that are currently in existence and being traded. The total value of all cryptocurrencies on September 1, 2021, was more than $1.9 trillion — down from the April high of $2.2 trillion, according to CoinMarketCap.

Why Have Cryptocurrencies Generated So Much Interest?

There are a variety of reasons why cryptocurrencies have generated so much interest in recent years. A few of them include:

  1. Many people believe that cryptocurrencies represent the future of currencies
  2. Fans of cryptocurrencies like that they remove governments and central banks from managing currencies, particularly because this removes the risk for inflation
  3. Other fans applaud the technology behind cryptocurrencies — the blockchain — because the decentralized system is seen as more secure than other payment systems 
  4. Others see cryptocurrencies as an investment opportunity — something that is going to go up in value over time

Are Cryptocurrencies An Investment?

Many people view cryptocurrencies as an investment opportunity. Because cryptocurrencies are not going to ever generate profits — like a company would — to make money off of a cryptocurrency someone has to be willing to pay more for it than you did. While many in the investment community have been discouraging people to see cryptocurrency as an “investment” others are speculating that as cryptocurrencies gain more acceptance, that its value will increase.

Holding cryptocurrencies as an investment is not for the faint of heart. Take Bitcoin as an example which has fluctuated greatly in just the last year — ranging from $30,000 to $65,000 for a coin just in 2021 so far.

Is It Legal To Buy Cryptocurrencies? 

It is legal to buy cryptocurrencies in the US, though it’s not legal in all countries like China which has essentially banned their use. It is important to note that while cryptocurrencies are legal in the US, the regulations around cryptocurrency have the potential to change as do the tax implications for buying and selling cryptocurrency. 

What’s The Difference Between A Crypto Wallet And An Exchange

There is a difference between holding crypto in the exchange in which you bought it and holding it in a “wallet.” A crypto exchange is a platform that lets you buy and sell cryptocurrencies like Bitcoin, Dogecoin, Ether, and others. A crypto wallet is essentially a software program that lets you store crypto coins. Say you bought a certain amount of Bitcoin. Since it has no physical form, how do you safely keep it? This is where you need an online storage facility. That’s the function a crypto wallet serves. 

*All investments and trading are risky, and may result in the loss of capital. Cryptocurrencies are largely unregulated in most regions.