How to Invest in Crypto: A Complete Guide for Beginners and Experts

Both in Indonesia and in the world, crypto investment is currently experiencing significant growth. According to CoFTRA, in Indonesia alone crypto transactions jumped significantly from IDR 33.69 trillion in February 2024 to IDR 103.58 trillion in March 2024. 

For experienced investors, crypto investment is a way to diversify their portfolio as a form of investment risk management. However, for beginners, crypto investment seems difficult and scary. This is because beginners do not yet have established knowledge about the world of crypto.

In this article we will provide a complete guide for those of you who want to dive into the world of crypto investment by presenting strategies, how to trade crypto, and related risks. The hope is that novice investors can make smarter decisions and achieve greater potential profits.

Indonesian Crypto Currency Exchange

One of the reasons for the rise of crypto investors in Indonesia is the presence of various cryptocurrency exchanges available on the market. Currently in Indonesia there are many cryptocurrency exchanges that have obtained permission from the government.

Some of these exchanges include Binance, Tokocrypto, Indodax and various other platforms. These applications offer various features that make it easier for users to buy, sell and exchange various types of cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), Terra (LUNA) and many more.

The buying and selling process on these various platforms is relatively easy. In fact, users can make deposits using Rupiah currency via bank transfer or via electronic payment services such as GoPay, DANA, OVO and so on. After the balance is deposited, users can immediately buy and sell it back to Rupiah. 

Although the process is similar, each exchange has its own unique features and advantages that users can consider according to their needs and preferences. With the presence of these cryptocurrency exchanges, it is increasingly easier for Indonesian people to get involved in the cryptocurrency ecosystem and participate in increasingly connected global trade.

Factors Affecting Crypto Prices

The factors that influence cryptocurrency prices can be very complex and vary depending on the respective digital currency. Below we explain several factors that can influence crypto prices.

1. Demand and Supply. As with other financial assets, crypto prices are influenced by the law of supply and demand. If demand increases while supply remains stable, prices will tend to rise, and vice versa.
2. Institutional Adoption. Crypto adoption by large financial institutions such as banks and corporations can have a significant positive impact on prices. Increased institutional adoption can demonstrate legitimacy and increase market confidence.
3. Technological development. Developments in blockchain and cryptocurrency technology can also influence cryptocurrency exchange rates.
4. Regulations. Government regulation of certain cryptocurrencies can have a significant impact on crypto prices. Banning certain cryptocurrencies can drastically reduce prices.
5. Market Sentiment. Market sentiment can also influence crypto prices. Good or bad news, rumors, and investor perceptions about the future of crypto can trigger significant market reactions.
6. Macroeconomics. Inflation, interest rates, political stability, and global uncertainty can also affect crypto prices as they affect forex exchange rates.
7. Technology and Innovation Trends. New innovations in blockchain technology, such as smart contracts and scaling technology, can significantly impact the price of certain cryptocurrencies.
8. Psychological Factors. Market sentiment and investor perception can also influence cryptocurrency prices. Psychological factors such as optimism, fear, or greed can trigger significant price changes in a short period of time.

How to Store Crypto

Once you buy the crypto assets you want, you need to store and secure them properly. Here are some steps you can take to store your crypto assets.

1. Use a Secure Wallet. Choose a safe and reliable crypto wallet. To date, hardware wallets such as the Ledger Nano S or Trezor are still the safest choice because they store private keys offline. However, there are still many online crypto wallets that are also guaranteed to be secure.
2. Use Two Factor Authentication. Enable two-factor authentication on all your exchange accounts and crypto wallets for increased security. This method will always ask for additional verification every time you log in or make a transaction.
3. Backup Private Keys. Make sure to back up your private key and store it in a safe place out of reach of others. Never reveal your private key to anyone.
4. Beware of Phishing and Scams. Be wary of phishing attempts and online scams aimed at stealing your personal information or access to your crypto wallet. Make sure to only access official websites and not click on suspicious links.
5. Software Updates. Consistently update your wallet and security applications to ensure protection against the latest security vulnerabilities.

By following the steps above, you have tried to protect the crypto assets you own.

How to Start Crypto Investing?

1. Learn Basic Crypto Science. Before you invest, it is very important to learn the basics of crypto. You need to understand how blockchain works, what a crypto wallet is, and how how to buy, store, and transfer crypto.
2. Choose the Best Crypto Store. To buy crypto, you must register at crypto shop or the best official crypto exchange in Indonesia. There are many different platforms on the market, so make sure to do your research and choose a trusted exchanger according to your needs.
3. Create a Crypto Wallet. Once you register on the platform, you will need to create a crypto wallet to store your digital assets. You can create an online wallet, hardware wallet, or software wallet. Most importantly, always make sure you choose a safe wallet.
4. Select Cryptocurrency. Then, it's time to choose the cryptocurrency you want to invest in. Bitcoin (BTC) may be the most popular choice, but there are also alternative coins such as Ethereum (ETH), Litecoin (LTC), Ripple (XRP), and other coins. Make sure you always do research on the cryptocurrency you want to choose.
5. Buy Crypto. Once you have chosen the cryptocurrency you want to invest in, you can buy it through the official crypto exchange platform in Indonesia. Therefore, please follow the purchase procedure carefully and secure your digital assets after the purchase is complete.
6. Perform Market Analysis. Once you have cryptocurrencies in your portfolio, it is important to continuously monitor the market and perform careful analysis. Crypto prices can be very volatile. So, beware of significant price changes.

Developing a Good Crypto Investment Strategy

Even though crypto investment has the potential for high profits, that doesn't mean you ignore a good investment strategy. In fact, even a professional cannot escape losses due to negligence in investing. Below we outline some tips to help you better manage your crypto investments.

For Beginner Investors

1. Start with a Solid Foundation. For beginners, just like starting a new adventure, understanding the basics of the cryptocurrency market is key. You must understand everything related to crypto.
2. Explore Without Fear. Usually successful beginners tend to be more explorative in trying various crypto investment instruments without fear of making a mistake. Suppose you are struggling to stay alive in the middle of the jungle.
3. Learn from experience. Every trade is a new adventure. Please note down every stage you have gone through for future learning. As a beginner you can also utilize the experience of experts as a guide on what to avoid loss which is significant.
4. Use Tools. Don't be embarrassed to use tools such as trading signals, technical analysis, or even suggestions from various trading platforms. Use these various resources as tools to help you walk.

For Professionals

1. Advanced Training. Most professionals usually have a deep understanding of the crypto world due to having had good training in technical analysis, fundamental analysis, or financial analysis. However, that doesn't mean you stop learning. There are still many mysteries you need to know about the world of crypto.
2. More Complex Strategy. Crypto investment professionals tend to use more complex strategies such as arbitrage, derivatives trading, or the use of trading algorithms to take advantage of market opportunities.
3. Active Portfolio Management. Professionals often engage in more active portfolio management by trading regularly and continuously monitoring market changes.
4. Deeper Analysis Methods. Professionals can perform more in-depth analysis of crypto projects, including fundamental analysis involving research on technology, development teams, and economic fundamentals.
5. Greater Risk. Professionals are usually prepared to take greater risks in trading and can use leverage or margin to increase their profit potential.
6. Networking and Collaboration. Professionals usually have relationships with professionals. As fellow traders, they will usually collaborate or gather to get better trading insights and ideas.

Strategy in General

Apart from the strategies above, in general you also need to pay attention to the following things.

1. Portfolio Diversification. Don't just invest in one place to avoid major losses. Diversify your portfolio by investing in several cryptocurrencies available in the market.
2. Invest Cold Money. Cold money means money that you don't currently need for primary needs. The failure of novice crypto investors is to invest money for their monthly needs.
3. Careful Research. Do careful research on the cryptocurrency you want to buy. There are many resources available on the internet regarding how to play crypto for beginners.
4. Use Dollar Cost Averaging. Dollar Cost Averaging is a crypto investment strategy with the same nominal amount every time. This nominal value is taken from your average investment ability. This method can reduce the risk of crypto price fluctuations.
5. Use a Secure Wallet. Cold Wallet wallets are often considered the safest option.
6. learn Crypto Trading Guide. Apart from buy and hold strategies, you can also consider learning crypto investment techniques such as day trading, swing trading, or scalping. There are many resources regarding how to trade various cryptocurrencies in Indonesia which is available on the internet.
7. Monitor Crypto News. It's time for you to subscribe to the platform crypto news which offers up to date information.
8. Crypto Profit Reinvestment. If you succeed in making a profit from crypto investments, consider reinvesting these profits to increase your profit potential in the future.
9. Risk management. Risk management is the lifeblood of every investment. Both stocks and crypto both have high potential risks.
10. Don't Panic Sell. Avoid fomo for panic selling when prices drop drastically. Study it how to buy cryptocurrency so that you don't get involved.
11. Long Term Investments vs Short Term Investments. Choosing a long-term or short-term crypto investment strategy depends on your financial goals, risk tolerance, and level of commitment. For those of you who are looking for quick profits, you must be prepared for higher risks. On the other hand, long-term investments have advantages such as not being too stressed by the ups and downs of prices in the market and often getting bigger profits as the market matures.

Crypto Investment Risk Management

Risk management is a key element in crypto investing. Here are some of the main risks and how to manage them effectively.

Key Risks

1. High Volatility. Cryptocurrency prices can fluctuate dramatically in a short period of time, resulting in potentially large profits, but also large losses.
2. Security and Protection. Security risks are among the most significant in the cryptocurrency ecosystem, with cyber attacks, theft and fraud frequently occurring.
3. Regulation and Compliance. Changes in government rules and regulations may affect the price and liquidity of cryptocurrencies, as well as impact exchange operations and users.
4. Dependence on Technology. Cryptocurrencies rely on complex and still developing blockchain technology. Technical glitches or system failures may result in losses or the inability to trade.

How to Manage Risk

1. Portfolio Diversification. Spreading investments across several different cryptocurrencies can reduce the risk of being concentrated in one particular asset.
2. Use of Stop Loss. Place a stop loss on every trade to protect your capital from unexpected losses. This allows you to exit the trade if the price moves against your prediction.
3. Position Sizing Management. Limit your position size for each trade so that the risk remains controlled and within your risk tolerance.
4. Fundamental Knowledge. Learn and understand the fundamental aspects of each cryptocurrency you invest in. learn how to buy and sell each crypto asset so that you do not generalize them.
5. Up to Date. Stay up-to-date with crypto news latest to anticipate significant market changes.
6. Safe Storage. Store your cryptocurrency in a secure wallet. We recommend that you use a cold wallet.
7. Choose a Trusted Exchange. Choose an exchange that is reputable and offers strong security features. Of course, you must have an operating permit from the government.

Conclusion

Crypto investment is indeed tempting for novice investors. However, laziness in searching for information is one of the causes of failure for novice investors at the start of building their portfolio. For this reason, we have provided various information regarding how to trade crypto best for beginners. Remember that crypto investments always have risks. Therefore, it is very important to conduct careful research and use appropriate risk management strategies. 

FAQs

What are the most common risks in crypto investments?

The most common risks are high price volatility, loss of access to wallets or private keys, changing regulations, fraud and security, and dependence on blockchain technology which is still in the development stage.

What are good crypto investment strategies?

Some good investment strategies include portfolio diversification, investing according to your budget, conducting careful research, using a dollar cost averaging strategy and choosing a safe wallet.

Is crypto investment suitable for everyone?

No, crypto investing carries high risks and is not suitable for everyone. It is important to understand the risks involved and only invest cold hard cash.

How to store crypto assets?

Always use a secure wallet, activate two-factor authentication, back up your private keys, be wary of phishing and scams and always update your wallet and security applications.

What is the difference between long-term and short-term crypto investments?

Long-term investing is the act of holding assets for a long period of time without being affected by short-term price fluctuations, while short-term investing is active trading to take advantage of price fluctuations.