by Maurie Backman | Updated Oct. 1, 2021 - First published on Sept. 14, 2021
Many or all of the products here are from our partners. We may earn a commission from offers on this page. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.
Many people are buying crypto. Here's how to tell if it's time for you to do the same.
There's no such thing as a risk-free investment. Even so-called safe investments like bonds could result in losses. But generally speaking, cryptocurrency is considered a pretty risky thing to put your money in. Crypto is very volatile, and while some people have made a lot of money with it, others have suffered big losses. But while buying crypto isn't for the faint of heart, if these three things apply to you, then you may be ready to own some.
Tips and tricks from the experts delivered straight to your inbox that could help you save thousands of dollars. Sign up now for free access to our Personal Finance Boot Camp.
By submitting your email address, you consent to us sending you money tips along with products and services that we think might interest you. You can unsubscribe at any time. Please read our Privacy Statement and Terms & Conditions.
You should never tie up money in any investment that you might need in the event of a financial emergency. As such, if you don't have a solid emergency fund, you should wait to invest, period -- whether it's in crypto, stocks, or something else. But if you have enough money in savings to cover a good three to six months of living expenses and you have extra cash to invest with on top of that, then you may be ready to add some digital coins to your portfolio. You can use our emergency fund calculator to help determine how much you might need to save.
Buying cryptocurrency shouldn't mean picking a random coin to invest in. Rather, it's important to research different currencies and understand their pros and cons. Some people who first get into crypto opt for the more popular currencies that have been around longer than others. That's a strategy you might decide to adopt, or you might use another strategy. Either way, the key is to read about different types of cryptocurrency before selecting one. For example, you may decide to invest in a coin that fluctuates in price less than others.
The value of cryptocurrency tends to fluctuate more wildly than stock values. And if you put money into cryptocurrency, there is a chance that you'll end up losing it all. If that's a risk you're willing to accept, then you're ready to buy some digital coins. But if the idea of taking that kind of loss makes you lose sleep, then you may want to choose an investment that's less volatile.
If you're ready to buy cryptocurrency, a good way to get started is to find a brokerage account that lets investors buy digital coins along with stocks and other investments.
One good bet is to look for a brokerage account that will let you trade in cryptocurrency for free -- meaning, without paying a commission each time you make a trade. You can also buy digital coins from popular cryptocurrency exchanges. These include:
From there, you'll need to decide how much money you want to put into cryptocurrency. If you're new to buying digital coins or investing altogether, you may want to start with a smaller investment and work your way up over time.
Buying cryptocurrency could end up being a profitable experience for you. The key is to make sure you're ready to take that step before diving in. To learn more, check out our top picks for the best places to buy bitcoin.
There are hundreds of platforms around the world that are waiting to give you access to thousands of cryptocurrencies. And to find the one that's right for you, you'll need to decide what features that matter most to you.
To help you get started, our independent experts have sifted through the options to bring you some of our best cryptocurrency exchanges for 2021. Check out the list here and get started on your crypto journey, today.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.