How To Start Investing in Cryptocurrency

“Regrets, I’ve had a few,” sang Frank Sinatra. Tragically, this line sums up my experience with cryptocurrency. Why didn’t I buy Bitcoin when a tech friend first told me to so many years ago?

I think it was in 2012, when the digital currency was only worth a few dollars per coin. As I write this, a single BTC is worth more than $75,000 CAD. To be honest, it pains me to look that number up. For a long time I tried to avoid even thinking about cryptocurrency—it brought me down to think how if I had only listened to my friend, I could now finish paying off my student loans, travel the world and still have Drake money left over.

On the occasions I did check in on Bitcoin, it was always preposterously more valuable than the previous time I had looked it up. One day a coin was worth $5,000; the next month, twice that. I was frankly suspicious of the whole thing. Where was all this new wealth really coming from? Was it like Aristotle’s theory of spontaneous generation, with dollars just sprouting out of the digital earth? I figured it more likely that every time someone made a buck, somebody else lost one—the whole thing struck me as a high-tech Ponzi scheme that could last only so long as new suckers kept buying in at higher prices.

Earlier this year, my skepticism was worn down by a combination of research, lockdown boredom and adorable memes about Dogecoin. Lil Yachty wishing “Goodmorning to #dogecoin owners only.” Gene Simmons declaring himself “God Of Dogecoin.” Elon Musk tweeting an imaginary cover of “Dogue” magazine! The internet’s favourite dog was heading to the moon, and this time I wouldn’t miss the rocket.

Problem was, I didn’t quite know how to buy Doge. I asked my friend Noah for help, but found his advice so intimidatingly complex that I ended up just e-transferring him $100 to buy the Dogecoin for me. He agreed, and I spent a week watching my coins bounce around in value with an attentiveness nearing what I would have shown an actual puppy. When it hit $170, I couldn’t take it any longer. The whole thing was based on a meme; it was literally a joke! I asked Noah to cash me out pronto. It wasn’t a ton of money, but I wanted to “win” my first time—not get left holding the doggy bag.

This month, I resolved to get back in the game without imposing on Noah. I settled on trying the digital currency exchange Coinbase, since reviewers considered it among the easiest (and safest) to use. There were still a few hoops to jump through: I had to take pictures of my ID and submit various information to the government, and I had to set up secure passwords and two-factor authentication. Then I had to link a credit card for buying crypto, and connect a PayPal account for selling it, since that’s the only method the site allows for withdrawals.

It was a bit of a hassle, but none of the steps were difficult And now that I’ve set it up, trading crypto on the platform is a breeze. I started by buying Shiba Inu, a new dog-related coin that has the internet memeing. I opted to spend $50, so Coinbase gave me $48 worth—over 1.5 million Shib coins!—after fees. The bank texted a code to confirm the deal was legit, and that was it.

As a nice bonus, Coinbase gave me $32 worth of mysterious crypto coins, in exchange for watching short informational (read: promo) videos about them. I’m now the proud owner of some $3 worth of Clover, and of course they’re four-leaf.

What’s next? I can’t legally dispense financial advice, so it’s a good thing I’m a millennial and have neither money nor wisdom. All I know is I’m going to perch like Smaug on my horde of Shib—figuratively, they’re intangible and I’m not a dragon—and dream about a day they appreciate a few thousand times over.

I also plan on investing a bit into more serious altcoins. It may be late in the day to buy Bitcoin, but it’s early morning for crypto as a concept. Who knows where this is all going? I’d rather lose a reasonable amount on a lark than live in regret.

How to get started

 1. First, decide which cryptocurrency you want to buy. Bitcoin, for example, is the best-known cryptocurrency and dogecoin is the buzziest, but there are big differences between them. Bitcoin has a finite supply of 21 million Bitcoins (which puts a hard cap on potential inflation), while the Dogecoin supply is unlimited. 

2. Decide how much you’re willing to invest. If you’re starting out, go slow: You can play with $50 or $100 if you want to. Don’t spend more money than you’re willing to lose!

3. Choose the digital currency exchange—such as Coinbase, Binance or BitBuy—that sounds best to you. This is where you’ll buy and sell digital currency. Experts recommend that you don’t use Bitcoin to pay for purchases (the same way you wouldn’t use diamonds to buy groceries), but you can cash out on the digital currency exchange. 

4. With all things cryptocurrency, research and research some more. That’s the message from Elena Sinelnikova and Natalia Ameline, the co-founders of CryptoChicks, a Toronto-based organization dedicated to increasing the participation of women in blockchain, the technology underpinning crypto. The pair formed CryptoChicks in 2017 and the org now boasts chapters in 56 countries.

While they can’t give investment advice on any specific cryptocurrencies, Sinelnikova says CryptoChicks can help people learn “how not to fall victim to scams, frauds or hacks.” She cautioned beginners to use all security features and to do their research before investing.

Asked about the line between investing and gambling when it comes to buying crypto, the pair suggested it falls somewhere between the two. “It’s not totally gambling, but it can still go south,” says Sinelnikova. She added that by doing your homework and researching the projects—and people—you’re putting money into, the results should be “more predictable than just gambling. But anything can happen, of course.” Ameline agrees: “In this environment, we still have a lot of uncertainties.” She warned again about scammers that “prey on people who maybe didn’t do their due diligence.”