How to invest in crypto: Kraken’s 6-step guide to crypto investing

Cryptocurrency has transformed the investing landscape, giving more people access to digital assets and new ways to diversify beyond traditional markets. 

From Bitcoin and Ethereum to a wide range of altcoins, crypto offers unique opportunities and risks for investors of all backgrounds.

Although the crypto ecosystem is constantly evolving, there are some basic steps that have remained unchained about how to invest in crypto. Because crypto investing has some unique differences compared to traditional stock trading, it can be helpful to understand more about the easiest, most reliable and secure way to invest in crypto. 

In this guide, we’ll walk you through the first steps to investing in crypto and building your portfolio, while also pointing out some common pitfalls to watch out for at different stages of the process.

Before investing, you'll need to know what you want to achieve in the short and long term from this investment and decide if crypto is the right for you to achieve that goal. 

Are you seeking long-term growth, exploring new assets or adding crypto to an existing portfolio? Setting clear, measurable goals will help guide your decisions and help you stay focused as you invest.

You should also consider how much of your portfolio you’re comfortable putting at risk. Crypto can be highly volatile, which means that prices can swing dramatically in the short term, even for large and well established assets. Many new and highly speculative assets can be even more volatile, so it is important to consider price volatility before investing.

Despite the headlines that focus solely on exponential gains and FOMO, sentiment surrounding crypto assets can quickly change. Understanding this volatility can help you anticipate your reactions and avoid making emotion driven decisions.

A good rule of thumb is to never put more at risk than you can afford to lose, and set realistic expectations to stay in control even during rapid market swings.

As you get started, explore different crypto trading strategies, like dollar-cost averaging, position sizing and risk management, to see which approach best aligns with your goals and risk tolerance.

A cryptocurrency exchange is a platform for buying and selling cryptocurrencies. If you’re just getting started, you’ll want a platform that’s easy to use and has a well established track record in the industry. 

Many investors begin with some of the best crypto exchanges, including Kraken, Coinbase and Gemini.

When choosing an exchange, it’s wise to consider its:

• Regulatory compliance: Exchanges that follow industry rules can help keep your investments safe and aligned with local laws.
• Fees & liquidity: High liquidity makes buying or selling faster and keeps prices stable.
• Asset selection: A broad range of cryptocurrencies lets you diversify your portfolio and adjust your strategy as markets change.
• Security: Two-factor authentication (2FA), cold storage and continuous monitoring help protect your funds.
• Features: Exchanges offer different products and services such as futures trading, margin trading, staking, advanced order types and more.

Before you can start trading, you’ll need to fund your crypto account. Most platforms offer several funding methods, including:

• Bank transfer like ACH, SEPA and more
• Wire transfers such as Fedwire and FPS
• Debit or credit card as well as PayPal, Apple Pay, Google Pay
• Crypto deposits from crypto you already hold.

Kraken offers a variety of popular funding options across several regions around the world. This makes it easy to get cash into and out of your Kraken account quickly and cost effectively.

Remember to check fees, processing times and deposit limits for each supported method to determine which is right for you. 

By first depositing cash or crypto in your Kraken account, you are able to then access all the possibilities that the crypto ecosystem enables.

Now, it’s time to choose one of the best crypto to invest in. Start by learning how the asset works, its unique use case as well as any risks that you should consider. Understanding other investors’ preferences can also help inform your choices.

According to a recent Kraken survey, 70% of U.S. crypto holders prefer established cryptocurrencies, while 12% preferred memecoins and a further 17% preferred investing in emerging coins.

Across the largest and most well established cryptocurrencies as well as the newest and most innovative emerging coins, Kraken supports more than 500 different cryptocurrencies.

This include popular coins like Bitcoin (BTC), Ethereum (ETH) and Solana (SOL) as well as the latest FOMO inducing memecoins. 

Exploring all the different types of cryptocurrency can help you determine which types of assets match your goals and deserve a place in your crypto portfolio.

When placing a trade on a crypto exchange like Kraken:

• Select a crypto asset: Choose the cryptocurrency you want to buy or sell. Consider your goals and research the asset before making a move.
• Choose an order type: Decide whether a market order, limit order or another order type fits your strategy.
• Confirm the details: Double‑check the amount, price and fees to make sure everything aligns with your plan.
• Place the order: Execute the trade and monitor your position as needed.

Taking the time to understand each step and asset can help you trade confidently and make the most of crypto’s variety.

Keeping crypto safe is as important as picking the right asset.

Digital assets are vulnerable to hacks, phishing and scams. Over 1 in 5 U.S. crypto holders have been targeted by fraud or theft, and 36% worry they could be next. 

Nearly half (48%) of holders say they fear making personal security mistakes more than being targeted, highlighting the importance of secure practices. 

You have several crypto wallet options depending on your storage priorities:

• Software vs. hardware: Software wallets are apps or programs on your phone or computer, while hardware wallets are physical devices that store crypto offline, offering stronger protection against hacks.
• Custodial vs. non-custodial: Custodial wallets are managed by a third party, whereas noncustodial wallets give you full control over your private keys for maximum security.

Platforms like Kraken Wallet offer a secure, streamlined solution for managing crypto and NFTs across multiple blockchains. Self-custody, encryption and PIN protection keep funds safe, while privacy-first features protect your personal data. Some platforms also allow you to recover lost crypto for added security.

Tracking your investments helps you understand performance and make informed decisions. Review your portfolio regularly to spot trends and adjust as goals evolve.

At the same time, pay attention to crypto market trends and news, as technological developments, including regulations or milestones can affect cryptocurrency values. Staying informed allows you to anticipate shifts and respond thoughtfully rather than reacting impulsively.

Consider strategies like dollar-cost averaging (DCA), which involves investing a fixed amount on a regular schedule. This approach can reduce the impact of volatility and help you avoid trying to time the market perfectly.

Some investors use alerts or notifications to track significant price changes. Frequent monitoring can lead to emotional decisions, so focus on long-term trends and your overall strategy rather than short-term swings.

One of the first choices in crypto trading is deciding how long to hold an asset. Traders’ strategies often fall into short-term or long-term approaches, depending on their goals, risk tolerance and time commitment. Some may hold coins for just hours, while others keep them for months or years.

Long-term trading, sometimes called “position” or “trend trading,” involves holding crypto assets for several months or even years. 

This approach is similar to traditional investing, but usually over a shorter period. Long-term traders aim to ride out market trends, giving their assets time to grow and recover from short-term dips. 

This style is often easier for beginners, less stressful day-to-day and more forgiving of timing mistakes.

In contrast, short-term trading focuses on making gains from price changes over days, weeks or even within a single day.

• Day trading means buying and selling within the same 24-hour period, requiring constant attention and quick decisions.
• Swing trading involves profiting from price changes over days or weeks, buying when there’s an opportunity and selling as trends shift. This approach is less demanding than day trading but still requires regular monitoring.

Both short-term styles can be profitable, but you'll also need to research, plan and establish a clear strategy to manage risk.

Now that you’ve learned how to invest in cryptocurrency, from choosing an exchange to selecting assets and securing your funds, it’s time to put your knowledge into practice.

Kraken offers a secure, easy-to-use platform for buying, selling and managing cryptocurrencies across multiple blockchains. Features like recurring orders, portfolio tracking and Kraken Wallet help you manage your crypto confidently.

Ready to get started? Sign up for a Kraken account today and take your first step toward investing in crypto.

You can start with as little as $10. Many exchanges, including Kraken, allow fractional purchases, so you don’t have to buy a whole coin.

For example, if you want to see exactly how much Bitcoin your USD deposit could buy, you can check the USD to BTC conversion before making a trade.

Investing usually means holding crypto for the long term to grow its value over time, while trading focuses on short-term price movements to profit from fluctuations.

Crypto investing carries risks, including market volatility, scams and security threats. Learn how to keep your crypto safe by following best practices for storing and managing your assets.