5 Pieces of Advice for Small Crypto Investments

Are you interested in investing a small amount of money in cryptocurrency?

We can’t blame you if you are interested in doing that – cryptocurrency has been one of the hottest investments of the past few years. 

However, there are some things you should know before making a small investment in cryptocurrency. And this is where this article will help, we will tell you everything you need to know about investing a small amount in crypto.

Now, we will say that this article is mostly aimed at cryptocurrency beginners. If you’re familiar with cryptocurrency, then you probably know all these tips. 

Diversify Your Investment

Our biggest piece of advice is to diversify your cryptocurrency investment. Of course, you want the popular cryptocurrencies in your portfolio. Those popular cryptocurrencies include Bitcoin, Ethereum, and Litecoin.

But there are more cryptocurrencies than just those three. 

There are thousands of different cryptocurrencies, which are called altcoins.

Now, when it comes to altcoins the amount you purchase does not usually matter because the coins are low priced. In fact, many altcoins will fail or have a stagnant price. 

That’s why we recommend purchasing a lot of different altcoins – all it takes is one $0.01 altcoin going to $1 or $5 for you to make a massive profit on a small investment.

Find a Trustworthy Exchange

One of the most important steps when investing in cryptocurrency is to find a trustworthy exchange. 

This is not difficult because there are a lot of trustworthy cryptocurrency exchanges out there. 

We recommend Coinbase Pro or Binance. Binance is especially nice if you plan on investing in a lot of different altcoins, which we recommend.

Our recommendation is to purchase Bitcoin on Coinbase Pro and then transfer that Bitcoin to Binance to invest in altcoins.

Don’t Sell at The First Price Drop

This tip relates to holding cryptocurrency – do not panic sell at the first minor price drop. Cryptocurrency is extremely volatile, so the price will drop from time to time. But it usually goes up at some point. 

You do not want to be one of those people that sold their cryptocurrency before the price jumped 2000%. 

It’s not a good feeling.

In fact, we recommend forgetting about your cryptocurrency investment for a few years. You will then remember to check your wallet and could be in for a nice surprise. 

Stick to Low Cost Coins

This relates to our second piece of advice – stick to low cost coins. The reason is because it is much easier for a $0.01 altcoin to rise 500% than it is for Bitcoin to rise 500%. 

Plus, you have a small investment, so a 30% increase in Bitcoin does not mean much compared to that 500% increase in an altcoin.

Store Cryptocurrency in a Wallet

Another excellent piece of advice is to store your cryptocurrency in a wallet. 

Our recommendation is a hardware wallet because it can store hundreds of different cryptocurrencies. The Nano Ledger S is a great wallet for this purpose and it is not expensive. 

If you don’t have a hardware wallet, then you will have to create a cryptocurrency wallet for every single cryptocurrency that you own. And that’s an annoying process. 

It’s also easy to lose your private keys if you have too many wallets. 

Why to store cryptocurrency in a wallet and not the exchange?

The problem with storing cryptocurrency on an exchange is that the exchange is susceptible to hacking. Cryptocurrency wallets are not very susceptible to hacking. 

It’s simply safer to keep all cryptocurrency on a wallet than on an exchange. This is especially true if you plan on holding the cryptocurrency for a long period of time. 

What is a “small” crypto investment?

The definition of small crypto investment varies depending on everyone’s personal situation. It’s generally classified as less than $1,000.

But really, it’s only as much money as you are willing to lose. 

We do not recommend placing your life savings into cryptocurrency. It’s way too volatile of an investment. 

What should my altcoin allocation be?

The amount of money you invest in altcoins varies based on your risk tolerance. Altcoins are much riskier than standard cryptocurrency, but the payoff can be huge. 

We recommend 70% of your investment in major cryptocurrencies and 30% in altcoins. If you plan on investing a smaller amount of money, then you should allocate more to altcoins for the reasons stated above.

Basically, it’s really not worthwhile to purchase $20 worth of Bitcoin because a 30% increase is only a $6 profit. 

When is a good time to invest in cryptocurrency?

Right now appears to be the best time to invest in cryptocurrency. The reason is simple – cryptocurrency has been in a bear market for nearly three years. And cryptocurrency tends to operate in a three year bear market cycle with about a one year bull market. 

Plus, decentralized finance (DeFi) is making huge waves in the cryptocurrency industry. The next bull market will certainly be based on DeFi tokens and platforms. 

Other than that, it does appear that cryptocurrency is the future world currency, so it’s wise to get in before everyone else. 

Fortunately, it’s easier than ever to invest in cryptocurrency. All it takes is a few minutes to register an account on Coinbase Pro or Binance US.

What are the top cryptocurrencies to invest in?

No one knows the future. However, these coins all look promising:

• Litecoin
• Bitcoin Cash
• Binance Coin
• Chainlink
• XRP
• Monero 
• Cardano
• Ethereum 

As far as every altcoin that would make a good investment, there are too many altcoins to list. It really comes down to searching CoinMarketCap and searching for coins that have a low price, high trading volume, and high market cap. 

Those are the altcoins that you want to pick as an investment. 

Final Thoughts

Well, that covers it for some advice on small crypto investments. Cryptocurrency is not nearly as scary an investment as the media likes to imply.

It’s also not that difficult to make an investment. 

If you follow the tips outlined above, then you should not have any problem making a small investment in crypto.