Investing in cryptocurrency: how to choose a coin and what you need to know before investing

In 2017, Cooper Tarley, a crypto investor, bought Bitcoin and Ethereum. According to him, he invested several hundred dollars in each of the cryptocurrencies. In 2021 he was a millionaire. Zineira’s traders understood what cryptocurrency investments are, what their advantages and disadvantages are, and gathered expert advice on how to minimize risks.

Features of investing in cryptocurrency

Cryptocurrency is a type of digital currency that does not rely on a central authority to verify transactions or create new coins. Instead, it relies on cryptography, the science of encrypting information to prevent counterfeiting.

Cryptocurrency works on blockchain technology. The latter consists of separate blocks of data that can contain information about anything. For example, transactions made in a particular cryptocurrency. Each block of data contains a link to the previous block – this creates a chain of blocks.

There are currently thousands of cryptocurrencies on the market. But this is a very volatile and speculative investment. Prices for even the most popular of them are much more volatile than the value of other assets, such as stocks. For example, in November 2021, bitcoin reached its all-time high and cost about $ 67,000, and on May 12, its price fell to $ 26,000.

Another risk of cryptocurrency is that it may become illegal. For example, the Central Bank of Indonesia on January 1, 2018, issued new rules prohibiting the use of cryptocurrencies.

Advantages of investments

Investing in cryptocurrency has several advantages:

  • Diversification. There are now almost 10,000 coins that can be invested. The cheapest ones cost less than $1.
  • Return potential. Your profit depends on the strategy you choose. For example, wait a few years for the price of your coins to rise. For example, in 13 years the value of bitcoin has risen from zero to $30 thousand. You can still invest them in staking or lending at interest. In the first case, you can earn about 10% per annum, in the second – up to 1000% per annum.
  • Additional benefits. Unlike stocks, some cryptocurrencies, such as bitcoin, can be used to pay for goods and services.


Investing in cryptocurrency is quite risky. This is because the price of coins is determined only by supply and demand, and only in some cases supported by real assets. For example, fiat currency, gold, or oil.

But such investments can bring good returns. For example, you can invest a few hundred dollars in coins that rise in price and become a millionaire in a few years. That’s what happened to crypto investor Cooper Tarley.

In addition to investing directly in the crypt, you can invest in cryptocurrency companies. They can produce real items or provide services, but they have a cryptocurrency on their balance sheet. If the price of the crypt rises, stocks will also rise.