Where should I start with crypto investments?
The odds are stacked against women when it comes to economic equality and financial empowerment. And it doesn't help that financial institutions largely exclude women. The whole system needs an overhaul, but in the meantime we want to answer your money, finance and economics questions. Every week we'll answer one of your questions in a useful and straightforward way. Today's question is...
Where should I start with crypto investments?
There are a couple ways to invest in cryptocurrency, and some are more difficult than others. In a previous newsletter we explained the scams to look out for when investing in crypto, as well as the ways it might help, or hinder, women’s economic equality. So here we’ll dive straight in with how to get started.
First, to help decide if you want to invest, ask yourself questions like, can you risk losing that money? When might you want to sell off your crypto if you bought it now? How will you feel if you see the price of your investment fluctuate quite rapidly?
Then think about what you want to invest in and how. For the ‘what’ you’ll want to take a look at the different kinds of cryptocurrencies available (there’s a list of them here) but also other products, such as crypto ETFs (although these aren’t looking great) or bitcoin funds. If you decide on the former, think of choosing one like you would a big purchase such as a car. Is the manufacturer reputable? Does it have loyal and satisfied customers? Is it likely to lose a lot of value? We already spoke about the dangers of social media influencers' role in promoting investments in this newsletter's audio section, so keep that in mind as well.
And, like a car, you will probably want to hang on to your cryptocurrency for a while if you’re just starting out, rather than trading or hedging it frequently.
Once you’ve chosen, for the ‘how’ you’ll need a platform to actually invest. Here’s a list of crypto exchanges that have been approved by the UK’s financial regulator, the Financial Conduct Authority, but many sources suggest Coinbase as a good place to start. (Note that Coinbase is not on the FCA’s list, but that’s because it’s able to sell its crypto services into the UK through an overseas subsidiary). Just like other investments we’ve talked about, make sure you know what fees the platform will charge you.
You’ll need to set up an account and check that the platform has the cryptocurrency you want to invest in on it. Then you can deposit money into your account and select your investment.
You can leave your investment on the exchange, or you can ‘move’ it into something called a ‘wallet’ (it doesn’t actually move but can only be accessed through this wallet). Wallets can be online apps, essentially, like Coinbase Wallet, or offline USB-stick-esque things, like Ledger. Either way, don’t lose your password (like one Rebalancing Act reader did…)!
And you’re away. Let us know how you get on. If you want to get super nerdy with it and keep up to date with news about each cryptocurrency, new ones, trends and so forth, here’s a list of good blogs. Send any interesting tidbits you find our way as your action of the week!
About us
Selin and Nat are financial journalists who met working together at a publication in London. If you are ever worried a question you have might sound stupid, we ask each other such questions all the time.
Got a question to ask? Send it to selinandnat@gmail.com and we'll try to answer it in an upcoming newsletter. All questions are anonymous. Follow us on Instagram @rebalancing_act.
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