Starting from Zero: The Five Core Principles of Cryptocurrency Investment, a Must-Read for Beginners!

The rise of the digital asset market in recent years has been remarkable. From traditional institutions entering the space to listed companies adjusting their asset allocations, Crypto has gradually become a mainstream investment target. Successful cases emerging in the market inspire countless investors to get a share, but for those new to this field, the most urgent questions are: “How to enter correctly?” “How to profit amid volatility?”

This article will outline the core logic of virtual currency investment from five dimensions to help beginners build a solid trading foundation.

Step 1: Why choose virtual currency investment?

Among various investment categories, Crypto offers a unique combination of advantages:

Advantage 1: Huge growth potential

Traditional financial markets (stocks, bonds, forex) are highly mature, dominated by institutions over the long term, making it difficult for retail investors to achieve excess returns. As a new asset class, Crypto markets are still exploring, with many undeveloped opportunities. At the same time, its volatility far exceeds traditional markets, which is both a risk and an opportunity.

Advantage 2: Accessible entry threshold

Buying Crypto requires very little initial capital, starting as low as $2-10. In comparison, stocks usually require over $300, and forex margin trading often starts at $1,000. This low barrier allows more people to participate.

Advantage 3: Breakthrough of time and space limitations

Traditional finance is limited by trading hours and geography—stock markets close on weekends, and forex has trading session restrictions. But Crypto markets never close—anyone in any time zone worldwide can trade 24/7, with no regional restrictions.

Step 2: Master the two main trading forms

Beginners first need to understand through which channels they can trade. Crypto trading mainly divides into two camps:

Trading form 1: Exchange trading

Divided into centralized exchanges (CEX) and decentralized exchanges (DEX).

Centralized exchanges typically offer spot trading and derivatives (contracts, perpetual contracts, etc.), requiring identity verification (KYC). The advantages are good liquidity and convenient operation. Decentralized exchanges do not require KYC but need a wallet prepared in advance; the trading experience is relatively more complex.

Trading form 2: CFD trading

CFD is a derivative instrument where investors do not actually own the asset but speculate on price movements. These platforms are usually under strict financial regulation, making funds relatively safer. The advantage is that multiple assets (stocks, forex, commodities, Crypto, etc.) can be traded within a single account, especially suitable for small-scale diversified investing.

For investors who prioritize fund safety, CFD platforms may be more worth considering, as they are often more regulated.

Comparison of the two forms

Step 3: Safety checks before trading

Before investing real funds, be sure to complete the following three verifications:

Check 1: Confirm platform legality

Choose platforms legally operating in your region, and verify whether they hold the necessary licenses. For CFD platforms, verify if they hold internationally recognized regulatory licenses (such as ASIC, FCA, FSC, etc.).

Check 2: Confirm deposit and withdrawal channels

Ensure the platform supports payment methods available in your area to avoid issues like inability to withdraw funds.

Check 3: Prioritize well-known platforms

Select platforms with long operational histories and large user bases. These platforms generally offer better security and service.

Important reminder: Beware of scam platforms forging regulatory licenses. It is recommended to verify directly on the official websites of regulatory agencies rather than relying solely on platform claims.

Step 4: Master the basic trading process

Regardless of the trading method chosen, the basic process is similar:

Stage 1: Registration and verification

• Download the official app or visit the web version (be sure to get the correct link from the official website to prevent phishing scams)
• Fill in personal information and submit identity verification documents
• Prioritize platforms requiring verification; if none, be more cautious

Stage 2: Fund deposit

• Recharge according to supported methods
• Confirm supported currencies; some platforms may only accept USD

Stage 3: Place orders

• Browse and select trading pairs
• Set market or limit orders based on your expectations
• Beginners are advised to start with the smallest trading units for practice

Step 5: Crypto directions worth noting in 2025

For beginner investors, it is recommended to start with mainstream coins ranked by market cap, as they are relatively less risky.

Bitcoin (BTC) | Market leader

Current price: $87.32K | 24h change: -0.54%

As the pioneer of Crypto, Bitcoin remains the market’s benchmark. The fourth halving event last year further strengthened its scarcity—block rewards were cut from 6.25 BTC directly to 3.125 BTC. Historical patterns show that each halving is followed by a new upward cycle.

Interest from large institutions in Bitcoin continues to grow, and the approval of spot ETFs has significantly lowered entry barriers. Meanwhile, upgrades to blockchain infrastructure (including Layer 2 scaling solutions and Rollup technology) continue to improve transaction efficiency, opening more possibilities for Bitcoin’s long-term application prospects.

Ethereum (ETH) | Smart contract ecosystem

Current price: $2.93K | 24h change: -0.87%

Ethereum’s core innovation is the “smart contract”—self-executing programs written into the blockchain that automatically run when trigger conditions are met. This feature allows developers to easily create complex applications in a decentralized environment, fundamentally changing the operation logic of multiple industries.

Unlike Bitcoin’s fixed supply, Ethereum adopts a flexible issuance mechanism, leaving room for ecosystem expansion. As applications proliferate, market demand for ETH may continue to rise, pushing up its long-term value.

Dogecoin (DOGE) | Community-driven

Current price: $0.13 | 24h change: -1.67%

Dogecoin experienced about a 20% correction earlier this year. Interestingly, large holders did not choose to exit but instead added to their positions at the lows. The reasons behind this are worth exploring: first, Dogecoin has the most loyal community base globally, and this cohesion manifests as anti-dip characteristics during market volatility; second, more merchants accepting Dogecoin payments—online and offline—are expanding practical use cases, reinforcing market recognition of its value.

Ripple (XRP) | ETF anticipation

Current price: $1.87 | 24h change: -1.47%

After US regulators approved spot ETFs for Bitcoin and Ethereum, XRP is widely regarded as the next ETF candidate. It is generally believed that once XRP ETF approval is granted, a large influx of institutional funds will follow, likely significantly boosting market prices.

Sui (SUI) | Emerging public chain

Current price: $1.41 | 24h change: -1.66%

Sui, developed by Mysten Labs, is a high-performance Layer 1 public chain that has attracted much attention recently. Its unique object model and Move programming language give it a strong technical foundation. Over the past year, Sui’s ecosystem growth has been meteoric—market cap has surpassed $5 billion, and total locked value exceeds $1 billion.

From decentralized exchanges, lending platforms, to NFT markets and GameFi applications, Sui’s ecosystem is rapidly expanding. Many analysts predict that if the coin price remains stable, it could challenge a new high of $5.5, driving chain reactions within its ecosystem.

Step 6: The three most common pitfalls for beginners

Misconception 1: Frequent trading

After mastering basic operations, many beginners start to trade frequently, sometimes going long and short simultaneously, even holding both positions. This results in high transaction fees and can interfere with judgment— even if the direction is correct, early closing can prevent enjoying profits.

Misconception 2: Ignoring market risks

No one can predict the market with 100% accuracy, but many people choose to fight against the market when their judgment is wrong, ultimately leading to liquidation. Many past crises (like the LUNA incident) unfolded this way—investors sense risk but choose to chase rebounds, ending up unprepared.

Misconception 3: Not setting stop-loss and take-profit

The mentality of wanting to make more when profitable or recover losses when losing exposes many to risk. Not setting stop-loss or take-profit orders can lead to devastating losses during sudden market jumps.

The importance of stop-loss and take-profit

Stop-loss and take-profit are fundamental risk management tools. When market volatility exceeds expectations, these functions can automatically close positions at the most favorable prices, rather than passively waiting for worse prices. Especially in extreme gap-up or gap-down situations, pre-set stop-loss and take-profit orders can maximize capital protection.

Most mainstream trading platforms now offer these features. Beginners should develop the habit of setting them when placing orders to keep risks within acceptable limits.

Ultimate mindset

Crypto investment is fundamentally a risk management discipline. Mistakes by beginners are inevitable; the key is not to repeat the same errors. Every mistake is a valuable learning opportunity, and timely strategy adjustment is more important than perfection.

A final message to all investors: Making mistakes is not scary; repeating the same mistake is the real waste.

Frequently Asked Questions

Q: Are Crypto and virtual currency the same thing?

A: Not exactly. Virtual currency is a digital token circulating on the internet, used for transactions but not necessarily utilizing encryption technology. Crypto uses cryptography to ensure transaction security and anonymity. Simply put, Crypto is a subset of virtual currency, but not all virtual currencies are Crypto.