How to invest in crypto?

Do you want to start investing in crypto but don’t know where to begin? Or do you already have an account but wonder whether you’re approaching it the right way?

In this article, you’ll learn everything you really need to know: from your first purchase to taxes, from market cycles to the psychological pitfalls that even experienced investors fall into.

How do you start investing in crypto?

Investing in crypto may sound complicated, but it’s actually very simple! You can do it through BLOX, a certified Dutch platform. Within a few minutes, you can own your first cryptocurrencies, and you don’t even need technical knowledge.

You’re on your way in three steps:

1. Download the BLOX app and open a free account.
2. Deposit money into your account. You can start trading from as little as €1.
3. Invest in your favorite cryptocurrencies!

Of course, you can choose Bitcoin, but there are many other cryptocurrencies to invest in. Once you dive into the crypto world, there’s a lot to take in. But don’t worry, this article will explain everything you need to know.

Why invest in crypto?

Due to inflation and low savings interest rates, more and more people are looking for alternative ways to grow or diversify their wealth. For many, crypto has become an attractive option because of technological innovation and the potential to generate returns.

Bitcoin is scarce

Bitcoin is known as the first and largest cryptocurrency. It is a unique digital currency used as a store of value. Moreover, Bitcoin is scarce: only 21 million coins will ever exist.

Every four years, the rate at which new coins enter the market is cut in half. This event is called a Bitcoin halving. Combined with its limited supply, this characteristic is believed to make Bitcoin less sensitive to inflation.

High return potential

The cryptocurrency market is still relatively young, which offers certain advantages. It takes less capital to influence the market, making prices more volatile. This creates more risk, but it can also result in higher returns.

24/7 tradable

Crypto never sleeps and can be traded 24/7. This is because crypto trading is global: while you’re asleep, people in Australia, Asia, and South America are awake and investing in crypto. No one depends on market opening hours, and you can trade whenever you want, even at four in the morning.

The Crypto Market Cycle: When Is a Good Time to Enter?

This is the question almost every beginner asks—and also the one where most people expect the wrong answer.

Spoiler: the perfect moment doesn’t exist. However, understanding the cycle can help.

Historically, the crypto market (and Bitcoin in particular) moves in recognizable cycles of about four years, strongly correlated with Bitcoin halvings.

What does a cycle generally look like?

Accumulation Phase

The market is quiet, prices are lower, and most people have little interest in crypto. During this period, some investors slowly begin entering the market again.

Bull Market

Prices begin rising, and crypto receives increasing attention on social media and in the news. More people enter the market, and FOMO (“fear of missing out”) can drive prices significantly higher.

Peak and Distribution Phase

Enthusiasm reaches its peak. Suddenly everyone seems to be talking about crypto, and prices are much higher than before. Historically, this is often a risky time to enter the market.

Bear Market

After a strong rally, a significant correction often follows. Prices decline, sentiment turns negative, and many people lose interest. Eventually, a new cycle often emerges from this phase.

What does this mean for beginners?

Most beginners enter during the euphoric phase, when most of the gains have already occurred. By understanding the cycle, you can recognize when expectations are excessively optimistic or pessimistic.

A popular strategy is not to time the market but to spread investments over time—for example, investing a fixed amount every month regardless of the price. This way, you automatically buy more when prices are low and less when prices are high.

This strategy is called Dollar Cost Averaging (DCA), and it works precisely because you don’t need to predict the cycle.

The psychology of investing in crypto

This is the topic most beginner guides skip, even though it is one of the main reasons beginners lose money.

FOMO: The most expensive emotion in crypto

FOMO stands for Fear Of Missing Out. If Bitcoin rises 40% in two weeks and all your friends are talking about it, it feels like you need to buy immediately.

But here’s the reality: when it’s everywhere in the news, much of the rise has already happened. FOMO pushes you to buy at the peak—often the worst possible time.

If you recognize this feeling, treat it as a warning sign, not a buy signal.

Panic selling

Crypto prices can fall sharply. The temptation to sell quickly “before it gets worse” can be overwhelming.

However, those who sell at the bottom risk locking in losses and missing the recovery.

Historically, Bitcoin has reached new highs after every major decline. This doesn’t guarantee the future, but it illustrates why panic selling is rarely the right choice for long-term investors.

The practical solution: Have a plan

The best defense against emotional decisions is a predefined plan:

• How much will I invest each month?
• At what profit level will I take partial profits?
• What is my investment horizon?

If you have a plan, you make fewer decisions in the heat of the moment, when emotions take over.

How much money should you start with?

Investing in cryptocurrency for the first time? It’s perfectly fine to start small. Even €10 to €50 per month is enough to learn how the market works and how you react to price movements.

Always invest only money you can afford to lose. This applies to investing in general, but especially to crypto. Prices are so volatile that you can be up 20% one day and down 10% the next.

Always make sure you have enough money left for your monthly expenses.

How do you choose a good cryptocurrency?

Today, thousands of cryptocurrencies are available, and new projects appear continuously. That makes investing exciting, but sometimes overwhelming.

Look at the market capitalization

A cryptocurrency’s market capitalization indicates its size. The higher the market cap, the harder it is to move the price significantly.

Just as it’s harder to roll a large boulder than a small stone, large-cap cryptocurrencies are generally more stable than smaller ones.

Market capitalization is calculated as:

Coin Price × Number of Coins = Market Capitalization

Bitcoin has the highest market capitalization of all cryptocurrencies. As a result, its price movements tend to be more moderate and stable, which can be beneficial for long-term investors.

Research the project

Behind most cryptocurrencies is a company, foundation, or group of developers.

Visit the project’s website and investigate:

• How does the coin work?
• What is the project’s purpose?
• What market problem is it trying to solve?
• Which companies support the project?

Take your time, stay critical, and always do your own research before investing.

Look beyond the hype

Some coins go viral on social media and rise rapidly in value. That may seem attractive, but hype also brings additional risk.

Try to look beyond TikTok videos, YouTube content, and posts on X before deciding to buy.

Follow the news

It’s wise to follow your favorite cryptocurrencies for a while before investing. This helps you stay informed about technical updates, legal issues, and other developments that may affect the price.

News has a major impact on both current prices and the future prospects of a cryptocurrency.

Investing for the long term or short term?

Do you now have an account, a budget, and a selection of favorite cryptocurrencies? Then it’s time to choose a strategy.

Long-term crypto investing

If you invest for the long term, you commit your money for several years and allow your portfolio to grow.

A popular strategy is Dollar Cost Averaging (DCA). This means investing the same amount regularly, for example €50 per month.

The advantage is that you end up buying at an average price over time and worry less about large market swings. It is a highly suitable strategy for long-term investing.

Short-term crypto investing

More advanced investors may choose short-term investing, also known as day trading.

The goal is to generate returns by buying and selling crypto frequently.

While it sounds straightforward, it’s much harder than it seems and can result in significant losses. You need solid knowledge of market movements and technical analysis before you can realistically profit from day trading.

What are the risks of investing in crypto?

Investing in crypto comes with risks, just like traditional investments. The cryptocurrency market is known for its high level of risk, but this is accompanied by the potential for high returns. It is therefore important to fully understand these risks before you start investing in crypto.

Price volatility

As mentioned earlier, cryptocurrency prices are highly volatile. This is because the crypto market is still relatively young and small compared to traditional financial markets. As discussed, this creates risks, but it also presents opportunities. As Bitcoin’s total market capitalization grows, its price is expected to become more stable over time.

Scammers

There are now more than 20,000 cryptocurrencies in circulation, and unfortunately, some of them are nothing more than scams. Be cautious of cryptocurrencies that promise quick wealth, because there are no guaranteed profits in crypto. More often than not, these promises are simply too good to be true.

Regulation

Because cryptocurrency is still relatively new, governments around the world are continuing to develop and refine regulations. If stricter rules are introduced, they can have a negative impact on crypto prices. Examples include changes to crypto tax reporting requirements or restrictions on Bitcoin mining, such as those previously implemented in China.

On the other hand, regulation can also create opportunities. Crypto exchanges and companies are required to meet higher standards and compliance requirements, while poorly managed businesses and fraudulent operators find it more difficult to operate. This can increase trust in the cryptocurrency market, which may ultimately have a positive effect on prices.

Only invest what you can afford to lose

This is advice you'll see everywhere, but it's incredibly important: only invest money that you can afford to lose. Cryptocurrency prices are highly volatile, which means you can make significant profits, but you can also experience substantial losses.

If you're considering buying crypto, make sure to do your own research. Read news articles, follow market developments, explore technical analysis, and learn how different cryptocurrencies work. And who knows—you might even end up convincing your family members about crypto at the next Christmas dinner!