The 4 Best Cryptocurrencies for Beginner Investors
Investing in cryptocurrency is becoming increasingly common in individuals of all ages and all walks of life. Unlike when cryptocurrency first became a thing in 2009, most people around the world have heard of it and there are many options for investing through traditional investment avenues.
But, if you are a new investor, you may be wondering what cryptocurrency to start with. Should you pick something with lower risk that is more expensive? Or something cheaper which is riskier. We will answer all of those questions and more, keep reading.
General Rules for New Cryptocurrency Investors
Investing in cryptocurrency is a personal decision. Though we can offer some guidelines, what you ultimately choose to do will depend on your willingness to expose yourself to risk, the amount of money you have available to invest, and your goals for your portfolio. To help you find your start, below are some general rules for investing in crypto.
1. Never invest any money you don’t intend to lose entirely.
2. Don’t buy a token based on promises from the developer or family and friends.
3. Always research any cryptocurrency you intend to buy before you buy it.
4. Use a hardware cold wallet whenever possible.
5. Don’t share your private wallet keys with anyone.
6. If something sounds too good to be true, it is.
7. Don’t buy anything you don’t understand.
These might seem vague, but we promise they apply in almost every cryptocurrency transaction. So, once you have these down, feel free to proceed to the next section.
The 4 Best Cryptocurrencies for Beginners
Here are the best cryptocurrencies to consider as a beginning investor. Do keep in mind that while these tokens have lower risk than some others, they aren’t without risk, and as we mentioned above, never invest any money you don’t intend to lose.
1. Bitcoin
We recommend Bitcoin solely on the fact that it is the longest-running and most proven cryptocurrency. While we can’t guarantee you will gain a return on your investment, we are reasonably certain it won’t go to zero. We also know that there are many things you can purchase with Bitcoin if you don’t want to keep it as an investment, and we know it isn’t a scam.
Beginning investors will want to purchase from a centralized exchange like Coinbase or Binance, and they can purchase using fiat currencies. We still recommend using a cold wallet, but either a Trezor or Ledger is widely available and easy to use.
2. Ethereum
Ethereum isn’t quite as certain or popular as Bitcoin, but we recommend it because it can be staked, and if you buy on a centralized exchange like Coinbase, you can stake your Ethereum even if you only own a small amount—making it an excellent selection for a beginning investor.
We need to point out that you only receive a small percentage in returns for staked ETH, which means the more you stake, the more returns you will gain. This doesn’t mean you should dump your entire net worth into Ethereum (and we encourage you to read the section about again) but this does make it less risky than other cryptocurrencies.
Additionally, the team behind Ethereum is still involved and very outspoken—so we know that it isn’t a scam and we expect it will be around for a long time, making it an excellent choice for a beginner.
3. Solana
Solana is an Ethereum alternative which has been taking the world by storm in the last few years. In fact, it has become so successful that we expect that it is a part of the reason Ethereum hasn’t experienced massive price growth in a long time.
That aside, we really don’t think you can go wrong when choosing Solana as it has a large team behind it as well and applications in business similar to Ethereum. Therefore, we are again reasonably sure it won’t go to zero. Plus, with the rise of NFTs, a lot of which are created and sold on the Solana NFT market, we expect it will continue to hold an important spot in the cryptocurrency world for many years to come.
It is also worth noting that there may be staking options for Solana which we recommend pursuing to generate a passive income for yourself.
4. Litecoin
Just as Solana is an alternative to Ethereum, Litecoin is a Bitcoin alternative. Though Litecoin hasn’t seen the massive growth and adaptation that Bitcoin has, it is still a prominent coin and does appear to be a trustworthy project.
Investors may choose Litecoin over Bitcoin because of the price point alone, and we urge you not to do that, as Litecoin simply isn’t as stable as Bitcoin. But, if you believe more in the future of adoption of Litecoin, then go right for it.
We especially recommend Litecoin if you plan to use your cryptocurrency in the future, as the Bitcoin transaction fees can get hefty. But if your plan is to buy something and leave it, then Bitcoin is better in 100% of the cases.
Why Don’t We Recommend Dogecoin?
Dogecoin has become a household name thanks to the backing and promotion of Elon Musk. But we have been watching Dogecoin before it was on Musk’s radar, and we have to say that this token is simply too volatile for us to recommend it for anyone.
Not only does Dogecoin suffer wild price swings, but the technology behind Dogecoin is nothing proprietary—meaning you are better off buying Bitcoin or Litecoin which serves the same purpose and are far less volatile.
Additionally, there is no way to every predict any market, but Dogecoin is even less predictable than others since it thrives on fame and social media posts—meaning you could find yourself in a whole host of trouble if you decide to start your investing journey here!
Overall, if you are new to investing, we recommend sticking with an investment in Bitcoin or Ethereum, and considering Solana and Litecoin if you don’t mind a bit more risk. Just make sure you stay far away from Dogecoin thought—unless you have some money burning a hole in your pocket.
