Crypto can be very intimidating at first. Its technology is complicated. The culture behind it is kinda weird. You've heard stories of people losing money in exchange hacks, or in market crashes. And up until recently it's been a very unregulated asset.

We'll go into depth into how to get started with crypto, but this article is meant as a short primer to get you started as soon as possible with the minimum info needed.

In this you'll learn to:

1. Plan your crypto portfolio
2. Choose an exchange
3. Get a hardware wallet to store it

Let's dive in.

Plan your portfolio

One of the first things you need to do is plan your investment strategy with crypto. Ask yourself these questions:

How much are you willing to put in?

As much as I love crypto, it's still a speculative asset. Unlike commodities like gold, silver, and real estate, which have been around for thousands of years, or oil and stocks, which have been around for hundreds of years, crypto is little over a decade old.

It's still an experiment. A lot of people out there really believe in it, myself included, but they're still very much the minority—less than 10% of people in developed nations have ever purchased crypto. So far it's mostly an asset for nerds and speculative traders.

A lot needs to happen before crypto becomes legitimized as a commodity, and even more as a legitimate currency. The technology needs to scale (transaction speeds are hundreds times slower than VISA), and governments need to adopt and regulate it (as opposed to ban it). If either of those doesn't happen, or if something unforeseen happens, crypto could go nowhere.

That being said, you'll need to decide how much of your portfolio you put into crypto. Do that now before you have buying any. Before you've experienced the thrills of prices shooting up or down. You won't act rationally once you do. Especially not at first.

It should be an amount you'd be willing and able to lose. Don't put rent money into it. Don't buy it on your credit card. In fact, pay off your credit card first.

Because crypto is speculative, it should be a small part of your savings. Single digit percentage for most. Double digit only for the fanatics and risk takers.

Do you plan to buy once and forget about it, buy on a recurring basis, or actively trade?

How do you plan to trade crypto? Do you want to:

1. Take a lump sum and buy it all at once, and sit on it?
2. Do you want to buy some now, and keep buying it on a recurring basis?
3. Or do you want to actively trade and try to catch highs and lows?

For most people, I recommend #2. Here's why:

For #1, you will likely buy at sub-optimal time. The price will likely go lower at some point. And you'll stress that you bought too high.

For #3, you have a higher than 80-90% chance that you will lose money, or make less money than if you bought and hold. Trading profitably is incredibly difficult.

For #2, you get the benefit of averaging the cost over time, and you don't have to stress about buying at the right time. You're doing it often anyway so you can take benefits of the lows when they come.

How long do you plan to hold onto this crypto? 

Are you planning to buy and sell in a month because your friend gave you a hit tip that it's about to shoot for the moon? Or do you believe in crypto and think it has the chance to really take off in the long term? Or do you want to do both short-term and long-term trading?

For the average person, I recommend getting into crypto only if you believe in it for the long term and are willing to hold it for a few years. If the historic gains continue, you'll end up with a ton of profit and you won't stress about short-term fluctuations. You're in it for the long haul and are betting on this exciting technology.

If you want some thrill, have extra money to play with, and are willing to learn how to trade no matter how hard it gets, then I recommend complimenting your long-term strategy with some short-term trades. If done right, trading can be very lucrative and exciting.

Even still, your short-term trading money should be a small portion of your total crypto money.

Do you want to just do bitcoin, or do you want to buy altcoins as well?

There are more cryptoassets than there are stocks on the New York Stock Exchange, and the number is growing quickly. How do you plan to distribute your portfolio?

1. Just buy Bitcoin.
2. Buy Bitcoin and some of the big name altcoins like Ehererum and Ripple
3. Buy mostly Bitcoin and big altcoins, but get some other altcoins
4. Buy mostly Bitcoin and big altcoins, but get dozens of small altcoin plays
5. Go nuts and ignore the big coins and just go for random altcoins

Most people just buy Bitcoin. If they branch out they get Ethereum and maybe a couple of the biggest names like Ripple, Litecoin, Bitcoin Cash, or Stellar.

Think of Bitcoin as buying MSFT (Microsoft) stock. It's been around longer. It's less likely to fail. It's less volatile. There's lot of people buying and selling it. Many people buy it and hold on for a while.

Think of Ethereum and other big altcoins as smaller tech companies. Think of TSLA (Tesla). They have some traction, but they're doing still young and trying to mature into a sustainable business. And still a bit rocky.

Think of all the altcoins as tiny startups. The vast majority will fail. But a handful will become the next Microsoft and will 1000x from where they are now.

For most people, I recommend ~75% BTC and ~25% ETH. If you want to gamble more, take a few percent from the others and buy small amounts of altcoins.

You can also go to Coinmarketcap's bitcoin dominance page and buy based on what everyone else is buying.

Finalize your plan

After asking yourself these questions, write out your plan. Promise yourself to stick to this plan. 

If you plan to put in 5% of your money and hold it for 3 years. Don't get excited when it's going up and go up 20%, and then sell after 1 year because it crashed.

Make a plan and stick to it. Don't let emotions dictate your trades.

Sign up for an exchange

Once you have your plan, it's time to sign up for an exchange to start buying crypto.

The main things you need to consider when choosing an exchange are:

• Fees. How much do they charge you to fund your account, and how much do they charge per trade. Some platforms charge only 0.2% or less per trade, and nothing for depositing. Other exchanges charge 2-7% in fees. The fees are particularly high if purchasing using a credit card. You obviously want the lowest fees possible.
• Security. Billions of dollars have been stolen from exchanges over the years. You want an exchange that uses the best security and storage practices. That means you want an established and trustworthy exchange like Binance, Coinbase, BitMEX, Gemini, and Bybit.
• Insurance. Money in banks and stocks are insured by the government. Crypto is not. Some exchanges have insurance on their assets, such as Binance which puts away 10% of all fees to compensate people in case of a breach. But most do not.
• Reliability. Some exchanges, such as Coinbase, are notorious for crashing when trading volume spikes. If you're a speculative trader, you'll want an exchange you can trust to stay online during these periods.
• Features. Some exchanges are simple buy and sell platforms with no charting or complex trading tools. Others have extremely sophisticated trading platforms that rival stock platforms in their complexity and offerings. Find one that meets your goal.
• Selection. Not all cryptoassets are on all exchanges. Some only sell Bitcoin. Others sell hundreds of cryptoassets. Make sure the ones you choose have the ones you want.

The exchange you choose depends on your goals. For example, Binance is an incredible platform for its security, reputation, insurance, low fees, selection in crypto, and features. It is a full-featured trading platform and meets almost all of my needs.

However, it is more complicated than a simpler exchange like Coinbase. It also doesn't let you set up automatic recurring purchases, which Coinbase does.

Unfortunately, however, Coinbase's fees are higher (1.49% vs 0.2%), it has fewer features, and they're less reliable in times of high volume.

But, if you're not going to be actively trading crypto, and only buying it on a recurring basis and holding it for years (where your gains can be several multiples), then the simplicity and the ability to do automatic purchases could easily outweigh the higher fees.

In short:

• Coinbase for recurring purchases and holding long-term.
• Binance for active trading.

Note: If you're Canadian, choosing an exchange is a bit complicated so we break down the choices in this article.

Get a hardware wallet

If you're planning on holding on crypto for a while, and it's at least a few hundred dollars worth (for now 🚀), you better get a hardware wallet to keep it safe.

A hardware wallet is a small electronic device designed to store crypto as safely as possible. They have no Internet connection and therefore can't be cracked into by Russian hackers. They'd have to have the device and know your passcode in order to steal your crypto.

Whatever you do, don't store large amounts of crypto on an exchange for extended periods. Many people have lost money that way. Although it's becoming less and less common, and Coinbase and Binance are good, safe choices—you just never know.

As you accumulate crypto over time with recurring purchases, every once and a while log into the exchange and transfer it over to your hardware wallet. Do it whenever it reaches an amount you'd be sad if you lost. Or once a month.

Which hardware wallet?

We recommend the Ledger Nano X over all other hardware wallets. It's a bluetooth-enabled, highly-polished device for $119. If that's too steep, then we recommend its older, cheaper sibling the Ledger Nano S which needs to be plugged in, is less polished, has a smaller screen, and can store fewer cryptoassets at once. But it's only $59.

For a detailed rundown check out How to use the Ledger Nano hardware wallet.

Stick to the plan

As a reminder, stick to the plan you've given yourself. It's fine to alter it slowly over time as you change your mind, but it's not a good idea to change it in times of stress.

If you're buying on a recurring basis:

• Never change the plan after BTC jumps up 30%. Don't sell the farm and buy BTC. Stick to the original amounts you were willing to invest.
• Never change the plan after BTC drops 30% if you're planning to hold for years. Don't liquidate. Keep holding. Let your recurring purchases acquire some more BTC at a lower price. I actually love it when BTC drops and get annoyed when it shoots up for this very reason.

For active trading, similar rules apply. 

• Don't put more in than you were originally comfortable with.
• Plan your trades before entering them, and stick to them. You were more rational before the trade than you are in the middle of it.