Pick an exchange to trade on

Just like fiat finance, to invest in cryptocurrencies you need a place where these coins are traded. To commence you will need to register and put some funds into your account, and then start buying and selling crypto.

There are a number of popular crypto exchanges, for example:

Such websites can have different terms of service and their trading platforms may differ a lot, so it is best to research and go through several reviews of exchanges.

According to CryptocoinCharts’ statistics, there are currently almost 200 cryptocoin exchanges with a total daily trade volume of $3.24 bn though not all of these marketplaces are reliable. Situations where crypto traders lose their money due to the exchange being hacked happen on a regular basis (here are some examples: one, two, three). There are also some cases where exchanges suddenly terminate their operations with little explanation, leading to the complete loss of funds by investors. So it is crucial to choose a trusted exchange. In the beginning, it is a good idea to go with the biggest and most well-known options.

Important note: not all exchanges accept fiat money, so you may have to buy cryptocurrency first and then deposit coins into the exchange to start investing (however, there are also exchange-broker-wallet hybrids like Coinbase where you can do everything in one place).

Chose a cryptocurrency wallet

As there are lots of exchanges, investors have to transfer funds between them somehow and also have a place to store their assets. Cryptocurrency wallets are tools that allow you to store and send crypto coins back and forth.

Note: one of the best choices is hardware wallet for long term hodling

When you’ve chosen the wallets you’d like to use, you are all set and ready to start investing.

Find sources of information

Cryptocurrencies are highly volatile assets whose prices can go up and down in large percentages in a few short hours. Such moves can be triggered by multiple events, so a crypto trader must constantly monitor market information.

So relevant live informations about markets from Cointelegraph, Coindesk etc. on one place are here.

Before putting your money into a coin it is a good idea to study the asset. One of the best tools for this research is Coinmarketcap, a website where you can find information on every coin and token available. The data includes capitalization, supply, trade volume etc. So the site can be used for cryptocurrency comparisons. Cryptocompare is another useful site for this sort of data.

Another great way of sourcing data is a CoinMarketCal which tracks crypto-related events which can potentially affect coins traded on exchanges.

Use technology to enhance productivity and mitigate risks

By now you are equipped with some knowledge and instruments for trading. However, compared with the fiat investment process there are still some elements missing.

First of all, fiat investors can use stock indices for benchmarking when building their portfolio — S&P500 and Nasdaq Composite are perfect examples of such benchmarks. They allow investors to trade whole sectors easily and manage complicated portfolios in a straightforward investment, reducing the risks and volatility of the portfolio.

You need to find similar tools for the crypto market — for example, Cryptoindex 100 (CIX100) is an automated index calculated by a machine learning algorithm which analyzes cryptocurrencies. This tool allows traders to reduce volatility and risks for their portfolios as well as the cost and effort inherent in investing in multiple coins, resulting in substantial savings in trading.

After the portfolio is built you can track coins via specialized apps such as Blockfolio or Delta, which provide valuable insights (real-time exchange prices, the order book for every coin etc). Using such tools also enhances productivity.