3 Signs You're Ready to Buy Crypto

by Maurie Backman | Updated Oct. 1, 2021 - First published on Sept. 14, 2021

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Many people are buying crypto. Here's how to tell if it's time for you to do the same.

There's no such thing as a risk-free investment. Even so-called safe investments like bonds could result in losses. But generally speaking, cryptocurrency is considered a pretty risky thing to put your money in. Crypto is very volatile, and while some people have made a lot of money with it, others have suffered big losses. But while buying crypto isn't for the faint of heart, if these three things apply to you, then you may be ready to own some.

1. You have a full emergency fund

You should never tie up money in any investment that you might need in the event of a financial emergency. As such, if you don't have a solid emergency fund, you should wait to invest, period -- whether it's in crypto, stocks, or something else. But if you have enough money in savings to cover a good three to six months of living expenses and you have extra cash to invest with on top of that, then you may be ready to add some digital coins to your portfolio. You can use our emergency fund calculator to help determine how much you might need to save.

2. You've done your research

Buying cryptocurrency shouldn't mean picking a random coin to invest in. Rather, it's important to research different currencies and understand their pros and cons. Some people who first get into crypto opt for the more popular currencies that have been around longer than others. That's a strategy you might decide to adopt, or you might use another strategy. Either way, the key is to read about different types of cryptocurrency before selecting one. For example, you may decide to invest in a coin that fluctuates in price less than others.

3. You know the risks

The value of cryptocurrency tends to fluctuate more wildly than stock values. And if you put money into cryptocurrency, there is a chance that you'll end up losing it all. If that's a risk you're willing to accept, then you're ready to buy some digital coins. But if the idea of taking that kind of loss makes you lose sleep, then you may want to choose an investment that's less volatile.

How to buy cryptocurrency

If you're ready to buy cryptocurrency, a good way to get started is to find a brokerage account that lets investors buy digital coins along with stocks and other investments.

One good bet is to look for a brokerage account that will let you trade in cryptocurrency for free -- meaning, without paying a commission each time you make a trade. You can also buy digital coins from popular cryptocurrency exchanges. These include:

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From there, you'll need to decide how much money you want to put into cryptocurrency. If you're new to buying digital coins or investing altogether, you may want to start with a smaller investment and work your way up over time.

Buying cryptocurrency could end up being a profitable experience for you. The key is to make sure you're ready to take that step before diving in. To learn more, check out our top picks for the best places to buy bitcoin.

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