The best crypto for beginners – Choose your first coin

The best crypto for beginners – Choose your first coin 1536 1024 Crypto Rand Group

If you are just getting started investing in cryptocurrency, it can be a little daunting to figure out which coin to buy. With so many tokens available, it seems impossible to pick the right one. This blog post will discuss some of the most popular options and provide a beginner’s guide to choosing the best cryptocurrency. Let’s dive in.

How to choose the right cryptocurrency to invest in?

When it comes to choosing the best cryptocurrency to invest in, there are a few factors you should consider.

First, determine your investment goals. Are you looking for quick gains? Or are you interested in long-term holdings and diversification? Answering these questions will help you narrow your choices and focus on coins matching your investment strategy.

Next, take a look at the market capitalization of the coins you are interested in investing in. Generally, larger market cap coins are more stable and have been around longer, making them good choices for beginners looking for an entry point into the crypto markets.

Finally, research each coin individually and ensure you understand its purpose, how it works, and how it compares to other coins in the space. Different coins will have different features and use cases, so take some time to do your due diligence before investing.

Even with these tips, there are so many choices, and we don’t want to offer financial advice here, so we will dive into the most popular coin categories and mention some of the front runners from each category. This should help you narrow down the choices and be part of your research. But ultimately, it is you who should make your own decisions when it comes to investing in cryptocurrency.

Picking a token based on your crypto investment approach

Crypto is a lucrative field, and investors are attracted to this new asset class for various reasons. In an effort to help you narrow down your digital coin selection, we start with some valid investment strategies.

Long-term hold

With this strategy, you want to focus on the fundamentals, researching and picking a cryptocurrency with a sizeable market capitalization and a solid reason for an expected value gain over a longer time frame. Once you pick the coin, you can either invest a lump sum (never more than what you can afford to lose) if the market timing seems right, or you can opt for a dollar-cost averaging strategy, which is popular with novice and seasoned investors as well.

This method means you keep investing smaller amounts regularly and averaging out your entry price over time. For example, you could decide to invest 100 dollars into a coin on the 1st of every month over the next few years. This ensures that – if you picked a coin with a positive growth trajectory – you would gain a profit regardless of market conditions.

For long-term hold, we would mention some of the bigger, more established cryptocurrencies such as Bitcoin, Ethereum, Cardano or Litecoin.

Mid-term crypto investment (1-3 years)

If you are looking at a shorter timeframe and want to take a little more risk hoping that you can catch the next bull cycle and cash out with a nice profit, you can take a look at some of the other top 50 coins on the list. These are still going to be reasonably solid projects with a good chance of positive price action but expect more volatility.

There are several crypto coins in this category that represent the backbone of the emerging blockchain industry, but we have seen examples of tokens getting hit or even disappearing from the top 50 list. With increased risk comes increased volatility but also a higher possible return on your investment if you choose well.

We would also include Ethereum and Cardano from the previous list, while some other coins to look at include BNB, Polygon, Polkadot, Avalanche and Uniswap.

High-risk, speculative investments

For many investors, the real allure of crypto is the chance to strike it big and increase the value of their investment multiple times in a short time. If this is you, we are not judging! You need to be aware of the high risk that comes with this strategy and truly invest only the amount you can live without.

Good research is even more paramount if you decide to go down this route. You want to try and pick a promising project at a relatively early stage (or a solid project close to the bottom of the bear market) where the higher risk is offset by the possibility of a huge price gain. If you catch the right token at the right time, it is possible to 10x, 20x, or even 50x your investment and laugh all the way to the bank.

Due to the speculative nature of this category, it is harder to pick tokens, but we would advise you to take a look at some of the promising metaverse and gaming projects that have a solid team with relevant experience, a product that is somewhat developed already, good tokenomics, and a sizable community that is passionate about the project. Some possible candidates for consideration include ApeCoin, Gala, Immutable X, Vulcan Forged, Illuvium and Ultra.

Crypto trading

If you are confident in your abilities to time the market, then buying and selling crypto over shorter time frames can be a viable strategy. It takes a lot of practice and research to understand how they work and stay ahead of the curve, but it can yield some good profits if done right.

When picking the first crypto assets to trade with, you want to look for tokens with high liquidity and market cap. Many people who are new to crypto investing start to trade Bitcoin in the beginning. It is important to note that volatility is higher on the smaller coins, so if you want to go for the big gains with margin trading or shorting on advanced crypto exchange platforms, you need to be willing to accept high losses.

Practice is key here, and we would advise starting small and gradually building up your capital. It takes time, patience, and, most of all – discipline, but it can be done. Once you are ready to start trading more actively, we recommend using the available tools on platforms like Binance and Coinbase Pro (including limit orders, stop losses, etc.) to better protect your capital.

Choosing your first cryptocurrency by categories

Another possible way to narrow down the countless available coins is by picking the category first. These categories are separated by the use case of the included coins, and you may find that one of these might suit your type of investment philosophy better than others.

Store of value

The original cryptocurrency, Bitcoin, is still seen as the digital gold of the crypto space and remains the most popular store of value. Some other coins often included in this category are Ethereum and Litecoin. It’s not a coincidence that these tokens correspond with our earlier list of long-term crypto investments.

Stablecoins

Although stablecoins are not tokens you would want to invest in (their value is pegged to the value of a fiat currency, most likely USD), they are a good first buy if you are still undecided but want to have your money in crypto, ready to deploy right away when the opportunity arises.

The most popular stablecoins, USDT, USDC and BUSD, are among the top 10 tokens by market cap and are often used as a safe haven for crypto investors during turbulent times. These are also good choices when you want to take profits from a successful investment and wait for the right time to deploy your capital again.

DeFi tokens

The decentralized finance (DeFi) movement saw an explosion in early 2021 and is expected to continue growing, with the total value locked increasing exponentially. If you want to participate in the tokenized finance revolution, you might want to look into some of the popular DeFi protocols such as AAVE, Chainlink and Uniswap. These tokens have seen incredible gains in the past months and are still considered to be some of the most promising options for profit.

Memecoins

The meme coin category, as the name suggests, comprises tokens that were created with the sole purpose of being a joke. Despite their initial comical intentions, these coins have demonstrated that they are here to stay and can offer serious profits for those who buy into them early. There are also plans to develop additional use cases for some of these tokens, but you must take this news with a grain of salt. If you want to get in on the meme coins action but don’t know where to start, we suggest researching Dogecoin and SHIB for starters.

Layer 1 and layer 2 blockchain platforms

These infrastructure tokens are the backbone of all smart contract projects that are built on top of these platforms. Think about them as the equivalent of Apple and Google in the smartphone world, where all phone apps are developed on one or both of these platforms.

They are making money based on the number of transactions that are handled by their networks, so the more popular they become, the greater their profits. They are often the first to benefit from any major upgrades and can provide you with a good entry point when building a diversified portfolio. Some popular layer 1 blockchain networks include Ethereum, Solana, Polkadot and Avalanche. Layer 2 tokens that you may want to consider are Polygon and Immutable X.

Crypto gaming and metaverse tokens

The gaming and metaverse sector has been growing steadily over the past year, thanks in part to the increasing popularity of virtual worlds such as Decentraland and The Sandbox and the announcement from Facebook changing their name to Meta. Some of the tokens in this category have seen truly incredible gains, but these are also the ones getting hit the most during a bear market. It’s not a coincidence that we featured these earlier in the high-risk, speculative investment section.

These tokens are often used to purchase virtual land and other NFT items within these worlds, making them a great entry point into this niche market. Some popular tokens that you may want to consider include Enjin, SAND, ApeCoin, Decentraland and Gala, but for the biggest gains, you will have to look at the smaller cap hidden gems.

NFTs

While not cryptocurrencies, NFTs or non-fungible tokens are a popular first choice for many new blockchain investors. They are unique digital assets built on blockchain technology with properties that make them one of a kind. The possibilities for NFTs are endless and range from art, collectibles and gaming items to real estate and even virtual concert tickets. These tokens have become incredibly popular in recent months as investors are looking for alternative options beyond cryptocurrencies.

The top 5 cryptocurrencies for beginners

If – after all this categorization – you are still looking for a simple, straightforward answer to the question “what is the best crypto for beginners?”¹ then we have narrowed down the list to five popular options: Bitcoin, Ethereum, Cardano, Polygon and Uniswap. All of them were picked with newcomers in mind, offering an easy entry to the crypto market to start experimenting with. They have all seen tremendous growth in the past years, making them a great choice for investors looking to make some profits in the near future.

Bitcoin

Bitcoin is the original cryptocurrency and still by far the most popular. It has an active community that is always looking for new and innovative ways to use the technology, making it a great starting point for any beginner.

Ethereum

Ethereum is one of the most versatile cryptocurrencies on the market, with its ability to host smart contracts and launch other tokens on top of its network. It is the backbone of many projects, from Decentralized Finance protocols to NFTs and gaming platforms.

Cardano

Cardano is a more recent blockchain platform that was designed with scalability and sustainability in mind. It has proven itself to be reliable and secure, making it popular amongst investors looking for a long-term hold.

Polygon

Polygon is a Layer 2 scaling solution for Ethereum, allowing users to quickly and easily interact with the blockchain. It is a great option for those looking to get involved in DeFi or NFTs without having to worry about high transaction fees or slow block times.

Uniswap

Uniswap is a decentralized exchange protocol built on top of Ethereum and also serves Polygon. It allows users to quickly and easily trade tokens without having to worry about the security concerns that come with centralized exchanges. It has become one of the go-to platforms for DeFi traders, making it an ideal choice for those looking to get started in crypto trading.

Where to buy your first cryptocurrency?

Now that you know which virtual currency to buy, the next step is finding a cryptocurrency exchange to purchase it. It’s important to ensure you are researching and choosing a reputable exchange that offers good security features.

Most beginner investors start their journey on a centralized exchange. These crypto platforms allow you to deposit fiat money and exchange it for digital currencies. They provide a crypto wallet to store your tokens on, similar to a bank account built on blockchain technology. deposit options for fiat currencies usually include bank transfer and debit card payment.

Some of the most popular cryptocurrency exchanges for beginners include Coinbase, Binance, and KuCoin. Each has its advantages and drawbacks, so make sure you research before making a decision.

Keep in mind that some exchanges may require additional verification processes, such as providing photo identification and other personal information. This can add extra time before you can buy crypto, so it’s a good idea to start looking for an exchange as soon as you decide to invest in cryptocurrency.

What are the best trading platforms for beginners?

Some of the most popular crypto exchanges where you can purchase crypto also operate as trading platforms. A cryptocurrency trading platform is an online service that allows users to buy and sell digital tokens. Many platforms offer various features geared towards crypto enthusiasts and advanced traders, such as charting tools, order types, and educational resources. The most popular platforms for beginners include Binance, ByBit and Huobi.

Before opening a trading account, make sure you consider factors such as fees, user experience, security measures, and customer service. It is also important to understand the different order types available on each platform so that you can find one that best suits your style. Additionally, do some research into the platform’s reputation and read online reviews before committing to a particular exchange.

With the right research and guidance, choosing the best cryptocurrency for beginners can be an exciting and rewarding venture. Be sure to do your due diligence, make informed decisions, and keep up with industry news to stay ahead of the curve. With enough practice and dedication, you can become a successful crypto investor in no time.

What is the best cryptocurrency wallet for beginners?

When it comes to cryptocurrency investing, securely storing your crypto holdings is an essential part of risk management. An exchange account can be vulnerable to hacks, but a crypto wallet you control is the safest way to store your coins and tokens. There are a few different types of crypto wallets available, such as desktop wallets, mobile wallets, web wallets and hardware wallets.

For beginners just starting out in the world of crypto investing, we recommend using a software wallet like Metamask and a cold storage option such as a Ledger Nano S or Trezor. Both Metamask and these hardware wallets are secure, easy to use, and support multiple coins and tokens. Additionally, they both allow you to store your private keys, giving you full control over your funds.

Continue your crypto education

Whatever digital currency you invest in, it is important to remember that the cryptocurrency market is unpredictable and volatile. Before you start investing in cryptocurrency, it is essential to do your research and ensure you understand the risks involved. Additionally, seeking professional advice or getting additional education from experienced traders may be beneficial before committing your money.

You can find educational crypto videos on many centralized and decentralized crypto exchange websites, crypto investment courses and investment groups on Discord and Telegram.

The Crypto Rand team also offers multiple educational plans with lessons on technical analysis, crypto signals, news and discussions and even access to IDOs (initial token offers from new crypto projects). Take a look at our great options and join hundreds of like-minded investors on your journey into the cryptocurrency world.

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