Getting Started with Crypto: A Beginner’s Guide

By Kirk David Phillips, CPA, CMA, CFE, CBP

Crypto has become a buzzword in the financial world, promising tremendous opportunities and of course some risks. If you're new to the crypto space, it's important to understand the nuances of crypto risk and security as well as the potential rewards.

How can a beginner learn crypto?

For those new to the world of crypto and digital assets, the journey begins with education. Understanding cryptocurrency for beginners involves familiarizing yourself with the basic concepts, terms, and technologies that underpin this revolutionary financial model. Here are a few starter tips:

• Enroll in a course - A cryptocurrency course for beginners provides structured learning and expert insights. These courses cover essential topics such as blockchain technology, the history of crypto, and the mechanics of buying and selling digital assets.
• Read books and articles - There are numerous books and online articles that offer in-depth knowledge about crypto. These resources help you understand market dynamics, opportunities and innovations to learn and stay up to date with knowledge.
• Join online communities - Engaging with online forums and communities can provide real-time insights and tips from experienced investors. Social media platforms like Reddit and Discord have active crypto communities where you can learn, ask questions as well as solve issues. Most crypto projects use Discord as the primary community hub.
• Follow industry news - Keeping up with the latest news in the crypto world is crucial. Websites like CoinDesk, CoinTelegraph or aggregated news feeds on Coinmarketcap, for example, offer updates on market trends, regulatory changes, and technological innovations, opportunities and risks.

Key Takeaway

Reading crypto news daily is a long-term habit that pays huge “dividends.” Staying informed in crypto is not an optional exercise if you want to reach the highest level of success.

How does a beginner start in cryptocurrency?

Starting in crypto can seem daunting, but the combination of curiosity and education is the recipe for success. Here’s a five-step guide to get started:

1. Choose an exchange – Centralized crypto exchanges are the best place to start for buying and selling crypto. Think of these as your on and off ramp to and from your bank account. Popular exchanges like Coinbase, Binance, and Kraken offer user-friendly interfaces and provide traditional support if you get locked out,
2. Start with a small investment - When considering how to invest in cryptocurrency for beginners, it's important to start small and gradually increase your investment as you become more comfortable with market dynamics. This approach allows you to learn without significant financial exposure. When your knowledge goes up you can make your investment go up.
3. Stay informed and adapt - The crypto market is highly volatile and constantly evolving. Stay informed about market trends and be ready to adapt your strategy as needed. Read the crypto news, experiment and practice. The most successful people are always the most informed.
4. Use crypto to learn crypto – The best way to understand crypto is to use it. Using and experimenting with crypto is the best way to understand the new paradigm of programmable money. The learn, use and repeat mantra is the success hack that combines education and action.
5. Think about learning first – To succeed in crypto, you need the right mindset, and that begins with good education. Otherwise, you’ll miss too many opportunities and make too many mistakes. Bigger crypto opportunities come from knowing advanced strategies, so learning helps you move forward.
   
   

Begin with small investments and diversify your portfolio to minimize risk.

Key Takeaway

The hard part is finding educational resources you can trust. The key is using a system to understand all the steps in the right order. You can either try to teach yourself or jumpstart yourself to success with an education platform like Crypto Bullseye Zone™.

Which cryptocurrency is best for beginners?

Choosing the right crypto investment can be overwhelming given the thousands of tokens available. When deciding which crypto is best for beginners, it's advisable to start with well-established cryptocurrencies. Here are some options to consider:

• Bitcoin (BTC) - As the first and highest market cap, Bitcoin is a stalwart in the market. Institutional and governmental interest is skyrocketing Bitcoin demand so it’s a good starting point for beginners. It has the strongest network security and the best store of value proposition.
• Ethereum (ETH) - Known for its smart contract functionality and programable finance, Ether is another popular choice for beginners. It supports a wide range of decentralized applications (dApps) and has a strong developer community. It was the next biggest innovation after Bitcoin.

Note: This is NOT investment advice. BTC and ETH comprise about 70% of the total crypto market so they are in a class by themselves. You have to choose where to put your funds because you're always 100% responsible when it comes to crypto (or any other investments, for that matter). Your plan is unique relative to everyone else.

Key Takeaway

When searching for the best crypto for beginners, consider factors such as market cap, historical performance, and the value prop of the tech. From an investment perspective you have to answer which crypto is best because there is NO right answer. The more you educate yourself, the better investor you’ll become.

How much should I put into crypto as a beginner?

Determining how much to invest in cryptocurrency as a beginner requires careful consideration of your financial situation and risk tolerance. Here are some guidelines to help you decide:

• Allocate first – Think about how much of your current assets you want to allocate for crypto. For example, Alice allocates 30% to real estate, 55% to stocks and bonds and 15% to collectibles. She plans to allocate 10% to crypto by reducing her stocks and bonds allocation to 45%. 
• Start small - Allocating 10% does NOT mean invest 10% all in one shot on day one. After you choose your allocation, start investing small amounts to get in the game and gradually increase your investment as your grow your knowledge and experience.
• Set a monthly budget – For those wondering how to invest in cryptocurrency for beginners with little money, consider a monthly investment budget that aligns with your current finances. This also works best if allocating a portfolio doesn’t resonate with you or if you don’t have a portfolio yet. When deciding how much to invest in crypto per month, evaluate your disposable income and don’t overspend.
• Consider your risk tolerance - Crypto is known for volatility, but volatility also equals opportunity. Assess your risk tolerance don’t put in more than you are willing to lose. Crypto is a game of risk management like all investments.
• Do your own research (DYOR) - Lots of people hear a few things and jump into crypto without knowing the value proposition. You will always be less successful when you DON’T understand what you are investing in. If you understand your target investment, it easier to come up with how much to invest in cryptocurrency.

How does crypto make you money?

Cryptocurrencies offer several avenues for generating income. Here are some common methods:

• Buying and holding - The most common method is through buying and holding digital assets, hoping their value will increase over time. This strategy requires patience and a long-term perspective.
• Trading - Some investors engage in trading, taking advantage of market volatility to buy low and sell high. Understanding when to buy cryptocurrency and when to sell is crucial for maximizing profits. Typically, buying during market dips and selling during peaks can yield significant returns. This is an active approach that requires more time investment, skill and experience.
• Staking - Staking involves holding crypto in a wallet and “staking” it with a blockchain network validator to provide network security. In return, you earn staking rewards, similar to earning interest on a savings account. Here’s how to make money staking crypto.
• Yield farming - Yield farming involves supplying crypto assets to a decentralized exchange as a liquidity provider or another decentralized protocol. You earn fees and sometimes additional tokens rewards.
• Lending - Lending your cryptocurrency to decentralized finance (DeFi) platforms in return for interest.
• Mining - Mining is the process of validating transactions on a blockchain network. Miners are rewarded with new coins for their efforts, but this method requires significant technical knowledge and investment in hardware.
• Airdrops – Airdrops are free token rewards received in exchange for simply holding a specific token or being an early project contributor or tester. Free money is one of the most awesome things in crypto.

Understanding how to safely invest in cryptocurrency involves recognizing the right times to buy and sell, which can be influenced by market trends, news, and technological advancements. It’s also super important to understand risk, which is a byproduct of education and experience.

How quickly can you make money from crypto?

The speed at which you can make money from crypto varies greatly and depends on several factors, including market conditions, investment strategy, your risk appetite. While some investors have seen rapid gains, it's important to approach cryptocurrency with a realistic mindset.

Key Takeaway

The single most important factor in how quickly you make money from crypto depends on how much time you invest and how seriously you take education. It’s that simple.

Here are some considerations:

• Market volatility - The crypto market is highly volatile, and while quick profits are possible, the opposite is also true. Prices can have double-digit fluctuations in a single day. 
• Investment strategy - Your investment strategy plays a significant role in how quickly you can make money. Day trading, for example, involves making quick trades to capitalize on short-term price movements, while long-term investing focuses on gradual growth.
• Risk management - Effective risk management is crucial in the crypto market. Setting stop-loss orders and diversifying your portfolio can help protect your investments from significant losses.

Key Takeaway

A long-term view is always the best investment approach. The long-term is a get rich slow process with less work and emotion baggage. A disciplined approach, combined with research and risk management, can enhance your chances of success.

Can you make $100 a day with crypto?

Earning $100 a day with crypto is an achievable goal for some, but it requires a strategic approach and a deep understanding of the market. Here are some methods to consider:

• Day trading - Day trading involves buying and selling cryptocurrencies within a single day to capitalize on short-term price movements. This method demands a significant time commitment and a keen eye for market trends.
• Staking and yield farming - Participating in staking or yield farming can provide passive income. The returns depend on the amount of crypto you stake or supply and this is more consistent with a long-term more passive play.
• Taking profits – “Buy low, sell high” is one of the age-old investing mantras. Crypto gains are ephemeral so taking profits at all-time highs, for example, is critical. You may be great at buying the dips, but it won’t mean anything if you don’t take profits from time to time.

Key Takeaway

Money is made when you buy NOT when you sell. Buying into a great opportunity is the setup for future profits. You have to sell to realize profits; otherwise, they can vanish in crypto.

Can cryptocurrency be converted to cash?

Yes! Liquidity is one of the appealing aspects of cryptocurrency. Most cryptocurrencies can be easily converted to cash through exchanges. Here’s how you can do it:

• Sell on an exchange - The most common method is to sell your digital assets on a cryptocurrency exchange for fiat currency, which can then be withdrawn to your bank account. Coinbase, Kraken and Binance are prime examples.
• Consider stablecoins – Rather than cashing out to fiat currency in your bank account, stablecoins are the digital crypto equivalent of USD or another fiat. Stablecoins are an easy way to buy into and sell out of Bitcoin, for example. Otherwise cashing out to USD has more hops and takes more time.

It's important to choose a reputable centralized exchange because they are akin to traditional financial institutions.

Convert your crypto to cash easily through exchanges or crypto ATMs.

Key Takeaway

Remember, the key to success in the crypto market lies in continuous learning, top of mind importance of risk management, and the understanding the value of a long-term diversified approach.

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