Learn Cryptocurrency Investment from Scratch: Five Core Steps to Enter the Digital Asset Era

In recent years, the cryptocurrency market has grown rapidly, with traditional financial institutions and listed companies beginning to allocate digital assets. Wealth has also been accumulated by early participants in the market. But for beginners, the most urgent questions are often: How do I get started? How to choose the right trading method? What risks should I be aware of?

This article specifically outlines five core steps for cryptocurrency newcomers to help you quickly grasp the basics of digital asset trading.

Step 1: Why choose to invest in cryptocurrencies?

Compared to traditional investment markets (stocks, bonds, forex, commodities, etc.), cryptocurrencies have three unique advantages:

Advantage 1: High potential returns

The cryptocurrency market is still in its early development stage, with volatility far higher than mature traditional financial markets. Traditional stock and forex markets are dominated by institutions, making it difficult for retail investors to profit; whereas the crypto market still offers many opportunities, and high volatility also means greater profit potential.

Advantage 2: Low entry barrier

Crypto beginners can start with very small amounts. Most cryptocurrencies have a minimum purchase amount of only $2-10, far lower than traditional stocks (usually over $300) and forex trading (over $1,000).

Advantage 3: 24/7 trading

Stock markets have regional restrictions and close on weekends, while anyone worldwide can buy and sell cryptocurrencies 24 hours a day without regional or trading hour limitations.

Step 2: Understanding cryptocurrency trading methods

Crypto newcomers need to understand the differences between two main trading methods:

Method 1: Exchange trading

Includes centralized exchanges (CEX) and decentralized exchanges (DEX). Centralized exchanges generally require real-name verification, with counterparties being the platform; decentralized exchanges usually only need wallet connection, without KYC verification.

Exchanges are suitable for long-term investors holding spot assets, and also support leveraged contract trading. Leverage multiples can reach 0-100x, but risks increase accordingly.

Method 2: Contract for Difference (CFD) trading

These platforms are under strict financial regulation, offering higher fund security. Users do not need crypto wallets, making operations more convenient. CFD trading is suitable for short-term investors, and a single account can trade multiple assets (stocks, forex, indices, gold, etc.), with leverage typically between 1-20x.

For crypto newcomers who prioritize fund safety, CFD platforms are often a more secure choice, as they are recognized by international regulatory agencies.

Step 3: Key points for safe trading

Crypto newcomers must verify the following before depositing funds:

Platform legitimacy check:

• Confirm whether the platform operates legally in your country
• Verify if deposit and withdrawal methods support local currency
• Prefer platforms with high reputation and long establishment history

Fund security assurance:

• Confirm the platform holds internationally recognized regulatory licenses (such as ASIC, FCA, FSC, CIMA, etc.)
• Check if the platform keeps user funds in separate accounts, apart from operational funds
• Visit the regulator’s official website to verify the authenticity of licenses to avoid being deceived by forged certificates

Trading process:

1. Download the official app or visit the official website (avoid phishing sites)
2. Register an account and submit identity verification documents
3. Deposit funds through supported methods and verify supported currencies
4. Select the cryptocurrency to invest in and set orders

⚠️ Important reminder: Cryptocurrency exchanges’ regulatory mechanisms are still imperfect, so be extra cautious when choosing. If a platform allows deposits without requiring identity verification, be alert.

Step 4: Recommended cryptocurrency choices for beginners

Beginners should start with mainstream coins with higher market capitalization and liquidity:

Bitcoin (BTC) - $93.72K 24-hour change: +2.61%

Bitcoin, known as “digital gold,” has a fixed total supply of 21 million coins, making it highly scarce. By 2026, with increased institutional adoption, Bitcoin is gradually moving away from the traditional four-year halving cycle toward a continuous growth model driven by institutional funds. With global central banks expected to maintain easing policies, risk assets are likely to rise. Multiple institutions forecast annual gains exceeding 90% in 2026, mainly driven by ETF inflows and corporate asset allocations.

Ethereum (ETH) - $3.18K 24-hour change: +1.37%

Ethereum’s dominant position in smart contracts makes it the preferred platform for DeFi, NFTs, and real-world asset tokenization. Upcoming network upgrades will significantly improve scalability and reduce transaction fees. As institutional demand for stablecoins and RWA (Real World Assets) increases, Ivy League funds are expected to start investing in cryptocurrencies before 2026, making Ethereum a likely top choice as a base layer.

USDT - Stablecoin Standard

As the largest market cap and most liquid USD stablecoin, USDT offers near 1:1 USD peg and the convenience of crypto transfers. The stablecoin market is projected to grow to $500-750 billion between 2026-2028, with USDT accounting for over 70% of the market. Its daily trading volume already rivals Visa. Price is expected to stay stable within the $1.05-1.10 range, suitable for conservative investors to hedge volatility.

Binance Coin (BNB) - $904.00

As the exchange ecosystem token, BNB has high liquidity and practical utility. Through quarterly automatic burn mechanisms, over 100 million tokens have been burned, continuously reducing supply to support price. Analysts are optimistic about BNB returning to $1,000 in 2026, with potential to reach $3,400, driven by DeFi revival and increased adoption in emerging markets.

Ripple (XRP) - $2.19

XRP focuses on cross-border payments and has been adopted by over 300 financial institutions worldwide. With clearer regulation, XRP ETFs are expected to launch. Market forecasts suggest XRP could reach $8 in 2026, with an optimistic scenario of $10-18. Transaction confirmation takes only 3-5 seconds, with very low energy consumption, outperforming traditional Swift systems, making it suitable for investors focusing on payment solutions.

Step 5: Common trading misconceptions among crypto beginners

( Misconception 1: Frequent trading

After mastering basic technical analysis, beginners often fall into the trap of frequent opening and closing of positions. Constantly watching the charts and trying to buy low and sell high leads to high transaction fees and impaired judgment. Even if the direction is correct, overtrading can prevent profits.

) Misconception 2: Disrespecting the market

No one can predict the market 100%. Mistakes are normal. Many beginners try to fight against reverse volatility, attempting to catch rebounds, which often results in liquidation. Many extreme market events in history have been caused by this mindset.

Misconception 3: Ignoring stop-loss and take-profit

“Wanting to make more after profits, trying to recover from losses” is a common psychological trap for beginners. Not setting stop-loss or take-profit means exposing positions to risk. These tools can help close positions promptly during gap openings, keeping risks within manageable levels.

The importance of stop-loss and take-profit

Effective risk management is a must for crypto beginners. Proper use of take-profit and stop-loss can execute trades precisely during normal market conditions, and even during gap openings, they can close at the most favorable prices, avoiding further losses.

Most modern trading platforms offer these features during order placement. Crypto beginners should pay attention to these fields to avoid omissions due to oversight.

Final words

Making mistakes as a crypto beginner is inevitable, but the key is not to repeat the same mistakes. Every loss is a valuable learning opportunity. Reflect promptly and adjust your trading strategies; over time, you will find a rhythm that suits you.

Remember: Making mistakes is not scary; repeating mistakes is. As long as you keep correcting yourself, your era of profits will eventually arrive.

FAQ: Cryptocurrency vs Virtual Currency

Is virtual currency the same as cryptocurrency?

Not exactly. Virtual currency is a digital token circulating on the internet, which may not necessarily use encryption technology; cryptocurrency is a type of virtual currency produced using encryption techniques to ensure transaction security and anonymity. Therefore, cryptocurrency is a subset of virtual currency, but not all virtual currencies are cryptocurrencies.