Start investing in cryptocurrency with just $100

Cryptocurrency Investing Starting With $100

By: Ian Golightly MBA

In this article, I want to take this opportunity to have you think openly. If I had family who had any personal financial literacy, they probably would think I’m crazy if I said the C-word… ‘Cryptocurrency.’ The truth is cryptocurrency has been around for a while, and I don’t see it going away any time soon. So it’s time for you and even me to be open-minded on assets that can increase our wealth.

Ever since the Covid-19 pandemic, millions of people around the world have entered the world of cryptocurrency. There are some people who have made a lot of money from cryptocurrency to where they can retire. On the other hand, many lost a lot of money in cryptocurrency. Articles on the internet discuss the great things about cryptocurrency, but rarely the downside. Before you invest in cryptocurrency, know there is a risk that is involved.


Challenges With Crypto

One of the biggest challenges with cryptocurrency is where to begin. Many articles out there discuss investing in Bitcoin, Ethereum, and a few other stable coins. As you venture into the cryptocurrency marketplace, you will find thousands of other cryptocurrencies. The problem with investing in cryptocurrency is that it is difficult to know where to begin in investing. Because of the hype around cryptocurrency, there is an overwhelming amount of information out there. As you dive in, the information/data may seem biased, conflicting, and may also sound like a scam.

Note: According to Coinmarketcap.com there are more than 13,000 different cryptocurrencies that are traded publicly.

101 Advice

My advice is to do your homework not just on the prices of the cryptocurrency that has drawn your attention but also on the coin’s white paper. You will want to do this to get a better understanding of the utility of the coin and if it is something that you support. From my observation, the coins that hold the most value are those whose white paper supports a strong case for utilization on the blockchain.

One appealing upside to cryptocurrency investing is that the market is active 24/7 versus the stock exchange that’s actively trading from 9:30 am til 4 pm ET.

This article’s intention is not to influence you with what cryptocurrency to invest in but to guide you to get started with just $100 (or even $1). If you wonder if cryptocurrency is a good investment to have, you won’t find it here because I’ll have a biased opinion. However, seasoned investors see crypto as ‘speculative’ and not real investments. Cryptocurrencies, like real currencies, generate zero cash flow. To profit from crypto is to sell it to someone willing to pay for it for more than you purchased it for.

 

Buying Cryptocurrency

When you are ready to purchase some cryptocurrency, there are a few things to keep in mind. A handful of cryptocurrencies (ex: Bitcoin) are available for purchase with regular U.S. dollars. However, a handful of other coins require you to buy one coin and then convert the coin that you want. There may be fees, so you’ll want to make sure you do your homework to make sure that it is worth it depending on your investing strategy. To hold your cryptocurrency, you’ll want to have a ‘wallet’ to store your coins.

In general, it is more common to create an account on an exchange like (Coinbase). Then you’ll transfer real money to purchase cryptocurrencies. Coinbase is an excellent trading exchange that allows users to have a wallet and the ability to buy cryptocurrency. There is also a growing number of online brokers like eToro that offer cryptocurrency. Robinhood is another platform that offers free trades on cryptocurrency, but they only provide a limited amount of coins. In my biased opinion, Robinhood is an excellent place to start because having limited access to ‘stable coins’ may deter you from being overwhelmed.

If you reside in the United States, you shouldn’t have to worry about if cryptocurrencies are legal. Currently, they are permitted, but China has banned their use. If you are outside the United States, you’ll want to make sure your country allows the buying/selling of cryptocurrency. As you buy cryptocurrency, you need to beware of predators that will scam you and take away all of your cryptocurrency.

Protect Yourself

Your first line of defense with protecting yourself is doing your due diligence. Coins that are ‘projects’ to particular blockchains may come out with an ICO’ initial coin offering.’ For every ICO, a white paper should be provided (white paper was mentioned previously). You will want to read the fine print and understand the project’s in’s and out’s. Here are a few things you’ll want to consider when you fine comb through the document.

  • Who are the stakeholders of the project? A well-known seasoned person in crypto is a good sign.
  • Does the document list well-known investors tied to the project? (Hint: If there’s a list, you can check Twitter to see if they are a verified person and to see if they seem like a seasoned person in the crypto sector)
  • Important: Will you own coins/tokens or will you own a stake in the company?
  • What stage is the project at? If it’s a project looking for funding, the more risker is the investment.

I believe this is an excellent standard framework for you to investigate before you invest in a cryptocurrency. I want to be clear that the list presented is the bare minimum. The process may be tedious, but the end goal is to make money and not lose money at all costs.

Exchanges That Offer Cryptocurrency

  • Coinbase
  • eToro
  • Robinhood
  • SoFi Active Investing
  • WeBull