As we approach 2025, investors continue to view the crypto market as a potential avenue for wealth generation.

Between September 18th, 2014, and September 26th, 2024, the global crypto market cap grew by over 6%. This may indicate the growing interest in crypto investment.

Today, a greater percentage of the global population is interested in knowing how to invest in crypto. Cryptocurrencies have recorded incredible growth; spurred by the remarkable growth of the top two cryptocurrencies, BTC and ETH.

When looking at how to invest in cryptocurrencies, you will likely encounter suggestions on the best cryptocurrencies to buy, the rise of DeFi and DeFi opportunities, investing in stablecoins, and crypto investment strategies. 

Notably crypto investment requires research and continuous sharpening of your crypto investment strategies. Let’s discuss what you need to know to get started investing wisely in crypto.

Choosing The Best Cryptocurrencies to Buy

From BTC and ETH to USDT and DOGE, there are diverse categories of cryptocurrencies and thousands of crypto. Choosing the best crypto to invest in can be quite overwhelming. 

The best cryptocurrencies to buy depend on factors such as:

• Technology development

• Market cap

• Real-world use cases

• Niche

• community

Let's dive in!

The Essentials 

The well-established cryptocurrencies; appearing at the top in terms of market capitalization, are often the first go-to crypto for most investors. These coins play a major role in adjusting your crypto portfolio’s risk and return ratio. Among the top cryptocurrencies are Bitcoin, Ethereum, and Solana.

Bitcoin has a market cap of about $1.3 trillion and has recorded a year-over-year return of about 120%. Between May 2016 and October 2024, Bitcoin has grown in value by over 12,500%. 

Ethereum, the second largest crypto, has a market cap of $314.2 billion and a year-over-year return of about 50%. Between April 2016 and October 2024, the ETH price has increased by over 23,600%.

Solana, which was developed to support DeFi projects, has a market cap of $72.6 billion and a year-over-year return of about 540%. Between 2020, when it was launched, and October 2024, its price has increased by over 20,000%.

The statistics indicate remarkable long-term growth for the established cryptocurrencies. Having shown such growth potential, cryptocurrencies such as BTC, ETH, and SOL are considered one of the best cryptocurrencies to buy.

Current Market Narratives 

While established crypto such as BTC continue to dominate, several other sectors have emerged with great potential to be game-changers. When looking for the best cryptocurrencies to buy, you may consider coins in these niches. These sectors include:

• Layer-2 solutions

• Real-world asset (RWA) tokenization

• Sustainable crypto/green crypto

Layer-2 solutions are growing in importance due to their significance in reducing transaction costs and enhancing speed and security in blockchains. Among the leading Layer-2 solutions are  Arbitrum and Optimism. Both Optimism (OP) and Arbitrum (ARB) are fast moving toward a $3 billion cap according to the sentiments of industry experts. 

The RWA trend has fast become a noteworthy sector in the DeFi space; blending traditional finance and the crypto space. As revealed by recent research by Binance, the RWA tokens market value has increased to over $12 billion and is expected to grow to $16 trillion by 2030. Among the top RWA tokens are ONDO, Mantra (OM) and PENDLE.

Since the revelation of the significant impact cryptocurrencies may have on the environment, investors have sifted toward buying sustainable cryptocurrencies.

Long-term Bets 

If you are looking for the best cryptocurrencies to buy to hold for a long period, and potentially fetch high ROI, you need some long-term bets in your portfolio. These should be assets that offer unique value propositions and have a strong team of developers. You’ll have to determine the strength by looking at tokenomics, price performance, utilities, and market factors. Examples include; UNI, AAVE, and LINK.

The Uniswap (UNI) project offers liquidity, direct crypto swapping, transparency with fee structure, and user-friendliness. Uniswap is the world’s largest decentralized exchange in terms of market cap. Uniswap (UNI) price has increased by over 50% in the past 1 year.  

Aave (AAVE), the go-to platform for flash loans, is one of the strongest crypto projects. It offers anonymous borrowing and lending while providing liquidity. More users are shifting to the DeFi space for financial services; making AAVE an attractive long-term investment choice for crypto investors. Over the past year, AAVE's price grew by about 110%.

The ChainLink (LINK) project’s value proposition is to provide accurate and reliable off-chain data for the blockchain. Chainlink has found use cases in various sectors including DeFi, traditional systems, insurance, and gaming. Today, LINK price is up by over 47% from a year ago. More expert predictions show the market sentiment that LINK may grow further in the long run.

Investing in Speculative Coins 

Speculation involves making a calculated investment in high-risk cryptocurrencies with the potential for a massive return.

Generally, the crypto market is termed as speculative due to its high-risk nature that often leads to financial loss and the possibility of incredible returns if the market moves as anticipated.

However, some coins are more speculative compared to others. Although there is potential for massive profits, the speculative strategy poses a significant risk of loss. Therefore, it is recommended that speculative coins should take a maximum of 10% allocation of your portfolio.

One of the crypto categories considered highly speculative is meme coins. Although meme coins offer very high rewards, the risks are equally high. Statistics have shown that about 97% of meme coins drop to zero shortly after launch. As such, it is important to consider your investment decision carefully before buying meme coins.

One of the top memecoin you can buy is Dogecoin (DOGE). The coin has established itself becoming a significant player in the crypto market. It has a vibrant user community with high trading volume; factors that contribute to its frequent price fluctuations. These fluctuations create numerous opportunities that traders can profit from in short-term investment movements.

Avoiding Investing in ICOs

One of the crypto investment strategies that some traders use involves buying coins at the ICO stage when the price is low and selling at higher prices when these coins get listed.

ICOs can sometimes be very lucrative, but they are the most risky investment decisions. It is advisable to avoid ICOs, but if you decide to invest in ICOs, only use funds that you can afford to lose.

With ICOs, the investors are not assured of returns on their investment and the crypto issuer also doesn’t know whether the coin will be a success. 

Often, ICOs are set up in a way that a few insiders profit at the expense of retail investors, who are later left with worthless coins that they cannot sell.

Exploring DeFi Opportunities

‘DeFi opportunities 2024’ was one of the most researched topics in the crypto space; indicating investors' interest in yield farming opportunities DeFi offers.

As a crypto investor, leveraging DeFi opportunities should be part of your crypto investment strategies. Well, let’s look at the top investment opportunities DeFi offers.

Lending and Staking: 

Lending and staking for rewards form part of yield farming. Lending involves putting up your crypto for other users to borrow while you gain interest in return. With liquidity staking, crypto funds are collected and locked to provide liquidity.

Meanwhile, staking refers to locking up your crypto in a specific blockchain network to provide security and support its operations. In return, you get staking returns.

One of the top yield farming platforms that appeared in the top DeFi opportunities 2024 is the Aave protocol.

Aave is a DeFi lending platform, that enables its users to lend or borrow cryptocurrencies. Some of its features include credit delegation and flash loans. You can earn interest by depositing your crypto into Aave liquidity pools. The platform’s over-collateralization policy and security make it an investment choice for people who use low to medium-risk crypto investment strategies.

Other yield farming platforms and protocols you can watch out for include:

• Compound

• Curve

• Curve

• Uniswap

• Yearn 

  
  

Risk Management

Yield farming offers crypto investors the potential to earn massive returns. However, you need to be aware of the risks involved before investing.

The risks include:

Impermanent Loss: Impermanent loss happens when the price of the asset locked to provide liquidity changes in the pool. This price change may result in a loss.

Smart Contract Risks: smart contracts self-execute when specific set conditions are met. If there is a bug in the smart contract code, investors can lose funds.

Market Risks: The price of the crypto in the liquidity pools can change with the fluctuations in the market. If a sudden price drop occurs, investors can experience losses.

Investors need to stay updated and use a combination of crypto investment strategies to manage risks and maximize returns in DeFi opportunities.

How to Store Your Cryptocurrencies:

Cryptocurrencies are stored in wallets. When discussing how to store your cryptocurrencies, you have to consider self-custody vs centralized exchange (custodial) wallets. 

With custodial wallets, a CEX keeps your digital assets and private key. Meanwhile, self-custodial (also non-custodial) wallets refer to wallets that you control and manage yourself. You keep the private key that enables access to your wallet. Notably, DEXs offer non-custodial wallets.

Self-custody vs centralized exchanges security: CEX often has security issues concerning custodial wallets and is prone to hacking. On the other hand, non-custodial wallets have no third party involved for hackers to target; making it a more secure option. As long as you keep your private key safe, there is relatively no risk of your funds getting stolen.

Transferring Funds

Today buying crypto has been made relatively easy with the diverse payment methods. You can buy crypto through bank transfers, debit cards, credit cards, and instant payments such as Paypal, Apple Pay, and Google Pay. 

Some of the exchanges that allow you to buy cryptocurrencies with Debit and credit cards include; Binance, Conbase, Changely, and Bitpanda. Read more about buying crypto with credit/debit cards. You can also learn how to buy crypto with Google Pay/ Apple Pay.

How to swap Cryptocurrencies

There are several ways to swap cryptocurrencies or convert them to fiat. However, the most popular way is through centralized exchanges (CEXs) and decentralized exchanges (DEXs). 

Centralized exchanges are companies that act as intermediaries facilitating swapping of cryptocurrencies. They act as brokers and custodians of crypto transactions. Often offer lower transaction fees compared to DEXs.

Decentralized exchanges are peer-to-peer marketplaces allowing anyone to buy or sell crypto. They are smart contracts driven; allowing users to swap cryptocurrencies without intermediaries. DEXs are generally more secure compared to CEXs.

Tax Considerations and Stablecoins

Disposing of crypto, including converting to fiat, is subject to taxation (capital gains tax). Meanwhile, there is no tax for simply holding cryptocurrencies. However, in crypto trading, you will need to exit positions regularly to take profit or avoid loss. This is where stablecoins come in.

Stablecoins allow you to exit a volatile crypto asset by converting it to a stable asset without cashing out of the crypto ecosystem. As such, you will still be holding a cryptocurrency, which is not yet subject to taxation in many jurisdictions; making it a tax-efficient strategy.

Sophie’s Unique Offering:

After learning how to invest in cryptocurrencies, are you ready to start investing? Now is the time to start buying cryptocurrencies in anticipation of the expected potential bull run in 2025. 

One of the best platforms helping crypto investors get the best cryptocurrencies to buy is Sophie. Sophie enables diversified crypto investment, self-custody options, low fees, and seamless payments.

If you are looking for a secure and comprehensive solution to managing your crypto investments, join Sophie.fi now.