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The Best Crypto Investing for Beginners: A Simple Guide
Do you want to know which are the best currencies to invest in for beginners? Read our guide on trusted cryptocurrencies like Bitcoin (Bitcoin), Ethereum (ETH), and more.
Diving into cryptocurrency can seem overwhelming, especially with so many options available. However, experts suggest that starting with well-established and reputable digital assets can make the process smoother.
To help you get started, we’ve compiled a beginner’s guide highlighting five of the best cryptocurrencies for beginners to invest in, considering their stability, market value, and growth potential.
Bitcoin (BTC)
Bitcoin is the oldest and most valuable cryptocurrency on the market, making it a solid choice for beginners. As of June 4, 2024, Bitcoin’s market capitalization surpassed $1.35 trillion, a number that represents more than half of the entire crypto market value.
Beginner crypto investors should consider Bitcoin as an investment option for the following reasons:
- Widespread availability: Bitcoin is available on almost all crypto exchanges and many mainstream brokerage platforms, making it an almost perfect gateway cryptocurrency for beginners.
- Growing acceptance: More companies around the world are accepting BTC for transactions, and it is even recognized as legal tender in countries like El Salvador and the Central African Republic (CAR).
- Strong growth potential: Recent developments such as the launch of spot Bitcoin exchange-traded funds (ETFs) have driven Bitcoin prices higher, even leading to it reaching a new high price of $73,750 on March 14. foreseen that the price of Bitcoin could reach more than a million dollars by 2030.
Bitcoin’s established presence and continued growth make it an excellent starting point for new crypto investors. While the price of one Bitcoin may be a bit high for the average investor, it is possible to purchase smaller portions of it for much lower prices.
Ethereum (ETH)
Although it has a much more modest market capitalization compared to Bitcoin, Ethereum It is a powerhouse among altcoins and a great option for crypto beginners.
Technically known as Ether, this cryptocurrency is the second largest by market value and plays a significant role in both decentralized finance (defi) and decentralized onePapplications (dapps) ecosystems.
For those wondering which crypto is best for beginners, here are a few reasons why Ethereum should be a strong candidate for your first crypto investment:
- Definition domain: As stated earlier, Ethereum is the backbone of many decentralized finance protocols and applications, which drives a high demand for ETH. These applications rely on the Ethereum blockchain to operate, making ETH a crucial part of the dapp and defi spaces.
- High Total Value Locked (TVL): At the time of writing, Ethereum held the majority of the total value locked (TVL) across multiple networks, indicating its widespread use and trust. TVL refers to the cumulative value of all crypto assets deposited across various definition protocols. Per Dapp Radar, Ethereum’s current TVL is $89.01 billion, a value that is several times greater than that of its five largest competitors combined. A high TVL generally means that more people are using a platform, which should bode well for the value of ETH in the future.
- Smart Contracts: Ethereum also supports smart contracts, which are self-executing codes with terms written directly into them. This feature enables a wide range of decentralized applications and has made Ethereum one of the most popular dapp hosting blockchains.
- Continuous development: The Ethereum network is continually being improved, with the recent upgrade to Ethereum 2.0 aiming to increase scalability and security.
This means that Ethereum must be able to keep up with technological progress in the blockchain industry, which should keep the value of ETH at a stable level.
With the above in mind, opting for ETH for a first crypto investment shouldn’t be a difficult choice to make.
BNB Coin
BNB Cointhe native cryptocurrency of the Binance ecosystem, is another option when buying crypto for beginners.
It may not have the same level of reputation and name recognition as the first two coins on our list, but it has managed to quietly establish itself as an important part of the broader crypto market.
Here’s why you should consider BNB among the best cryptocurrencies for beginners in 2024:
- Stable performance: Stability is key to any investment and despite the volatility of the crypto market, BNB has shown consistent growth over the years. Its initial price was $0.15 during its 2017 ICO and has appreciated significantly since then. At the time of writing, BNB costs over $645 and has a market cap of $99.3 billion, making it the third largest non-stable cryptocurrency on the market.
- Controlled supply: With a maximum supply of 200 million and a current circulating supply of around 156 million, the value of BNB should benefit from this limited supply because it will create scarcity, which over time could help increase the value of the coin.
- Utility Token: BNB offers discounts on transaction fees on Binance Exchange and is used on multiple blockchains within the Binance ecosystem. It facilitates trading on the Binance exchange, allowing users who hold BNB to enjoy discounted trading fees. Additionally, it can be used as collateral for margin trading, allowing users to leverage their positions and potentially increase their returns.
In addition to trading, BNB serves as the main currency for Binance’s decentralized exchange, Binance DEX. Users can trade cryptocurrencies non-custodially while maintaining full control over their assets.
BNB is also integrated into Binance’s decentralized lending platform, Binance Lending, where users can lend and borrow cryptocurrencies while earning interest. Additionally, BNB can be used to pay transaction fees on the Binance Smart Chain (BSC), a high-performance blockchain developed by Binance.
All of these use cases in an ecosystem as dynamic and expansive as Binance’s should help safeguard BNB’s value in the long term, making it undoubtedly one of the best cryptocurrencies to buy now for beginners.
Solana (SOL)
Another coin that could be among the best crypto investments for beginners is Solana (SUN). Its price performance over the last year has been generally positive, with the coin’s value increasing by more than 660% in that period, for data by CoinGecko.
One-Year Solana Price Chart | Source: CoinGecko
The Solana blockchain also has several features that should ensure SOL’s growing reputation in the crypto market and further establish it as one of the largest coins by capitalization:
- Speed and cost efficiency: Solana uses a unique proof of history (PoH) mechanism, which allows it to process up to 50,000 transactions per second at a fraction of the cost of Ethereum.
- Scalability: Solana’s high yield and low fees also make it an attractive platform for dapp developers and users.
- Growing ecosystem: Solana has a thriving ecosystem of dapps, NFT platforms, and Web3 games, further increasing its appeal. It is currently home to some of the most popular meme coins on the market, including Bonk (BONADO) and Dogwifhat (WIF).
- Environmental impact: Solana’s PoH and proof-of-stake (PoS) models consume less energy than traditional proof-of-work (PoW) systems used by companies like Bitcoin.
In today’s world where people value environmental protection, cryptocurrencies with reduced ecological footprints may be viewed more favorably, and it would make sense for novice crypto investors to buy these coins.
Ripple (XRP)
Anyone looking for the best crypto to buy as a beginner should not ignore Ripple (XRP). The currency has been around since 2012, when Ripple created it to facilitate fast and cost-effective cross-border transactions.
It has steadily grown to become one of the most prominent digital assets in the crypto sector, with a current market valuation of $29 billion.
Priced at $0.5252, XRP is currently the most accessible cryptocurrency for beginners on our list. The current price is a whopping 84.6% discount to XRP’s all-time high price of $3.40 and could serve to nudge potential investors in that direction.
Other factors that make XRP one of the best cryptocurrencies for beginners include:
- Fast transactions: XRP can handle up to 1,500 transactions per second, making it one of the fastest cryptocurrencies available.
- Low cost: XRP transactions are also cost-effective and do not require high energy consumption, unlike Bitcoin.
- Financial partnerships: Ripple has partnerships with large financial institutions such as MoneyGram and American Express, a factor that has increased its credibility and use.
- Accessibility: Trading at a lower price, XRP is accessible for beginners with limited capital. This allows for potentially higher returns with a lower initial investment.
Final thoughts
When starting your cryptocurrency investment journey, it is essential to choose assets that offer stability, utility, and growth potential.
While not an exhaustive list, Bitcoin, Ethereum, BNB Coin, Solana, and XRP offer unique advantages that can make them ideal choices for beginners.
However, always remember to do your own research and consider your risk tolerance before investing in any cryptocurrency. Despite their relative stability, the currencies mentioned above are also subject to periods of volatility, which can wipe out your investment.
Common questions
What are the best places to buy crypto for beginners?
There are several platforms where beginners can buy cryptocurrencies, such as Coinbase, Binance and Kraken. These platforms are easy to use and offer a variety of cryptocurrencies. However, you must remember that investing in crypto carries risks. Always do your own research and consider seeking advice from a financial advisor.
What is the best way to invest in cryptocurrency for beginners?
The best way to invest in cryptocurrencies for beginners is often to buy and hold a diversified portfolio of cryptocurrencies over the long term, regardless of short-term price fluctuations. However, it is important to only invest what you can afford to lose and to do thorough research or seek professional advice before investing. Please remember that the value of investments can go down as well as up.