Cryptocurrency is more accessible than ever. While trading digital assets like bitcoin and ether used to require a certain level of knowledge, you can now buy and sell from your phone without understanding how the underlying crypto technology works.
That accessibility means that many people may enter the fast-moving crypto market without a clear understanding of how to properly manage crypto and its volatility. For those who are not professional traders (and even many who are), trying to time crypto swings is a losing game, as prices can double in a month and crater in no time. That’s why many long-term investors have settled on a simple strategy: buy and hold, sometimes affectionately referred to as “HODLing” (short for “holding on for dear life”).
The idea is to invest in a crypto of your choice, hold it during periods of volatility and sell only when the price reaches a predetermined value. No day trading, no chart watching to worry about. For those who like that easy way, here’s how to get started.
1. Look for properties that match your goals
There are millions of cryptocurrencies, and more coming to the market every day. Picking up a single coin from such a large pool can be difficult. If you’re investing for the long term, starting with one or two well-established cryptos makes more sense than building a complex portfolio from day one.
Bitcoin (BTC) and ether (ETH) are the most widely held cryptocurrencies. The former has the longest history, the highest value and is often kept as a value store. The latter enables a wide network of decentralized applications and has built-in services that exceed price assumptions. Both are more liquid and better understood than alternative micro-coins, or altcoins.
If you are attracted to other assets – cardano, solana or XRP, for example – make sure you do your research. Learn about the group behind crypto and review their history of staying active during market depression. The more speculative the coin, the greater the risk.
2. Choose where to buy your crypto
Cryptocurrency is usually bought on specialized exchanges, which specialize in digital goods and related services. For crypto exchanges, a centralized exchange, such as Coinbase or Kraken can be an easy place to start for crypto beginners. These platforms allow you to connect a bank account, verify your identity and buy crypto in minutes. These exchanges also tend to have greater oversight and financial regulation than their decentralized counterparts.
When checking exchanges, make sure they comply with US regulation. Many popular crypto exchanges do not operate in the US or only offer a limited, regional version of their platform due to strict regulations. You should also confirm whether the exchange gives you access to the assets you want, and review its security history and fee structure (exchange fees can be confusing and vary widely).
Investment platforms such as Robinhood and SoFi have been allowing users to invest limited amounts of cryptos alongside stocks, exchange-traded funds (ETFs) and other assets in recent years. Some also offer benefits such as commission-free crypto trading.
If you are familiar with or use one of these platforms, buying crypto there should be considered. The tradeoff is that these platforms often feature a smaller selection of cryptocurrencies than dedicated exchanges and, depending on the platform, you may not be able to transfer your holdings to an external wallet.
3. Transfer your crypto to the wallet
Leaving your crypto on an exchange can be convenient as you can connect to your account and trade or manage your assets seamlessly, but doing so comes with added risk.
Buying crypto on an exchange usually means you keep access to your private keys – the string of characters that allow you to get your assets on the blockchain. But the exchange has experienced hacks, bankruptcies and freezes in the past. The phrase “not your keys, not your coins” exists for a reason: If you don’t control your private keys, you don’t fully control your crypto.
Once you have purchased, consider moving your coins to a crypto wallet. Hot wallets like Zengo and Phantom are always connected to the Internet, making them ideal for small amounts or assets that you use on an ongoing basis, but they are vulnerable to hackers. Cold wallets store your private keys offline on hardware like Ledger machines and are the gold standard for holding large amounts that you plan to store for a long time.
Whatever you choose, don’t forget to back up your seed name – a 12 or 24 word recovery phrase for your wallet – and store it somewhere offline and secure. Lose it and you can kiss your crypto access goodbye.
4. Set a horizon (and commit to it)
Buying and holding crypto sounds simple in practice. But market volatility can make it difficult to avoid making changes based on your emotional response to price changes. Drops of 10% or 20% over the weekend are not uncommon for major cryptocurrencies.
Before you invest, decide how long you’re willing to hold and how much you can pay without needing to be repaid. If you can’t keep a cool head during the downturn, you may be investing more than your risk tolerance allows – or crypto may not be the asset class for you.
Many buy-and-hold investors set a price level, time frame or life goal as their goal and commit not to sell until they reach it. Writing that limit down can help you stay focused when emotions flare up later. Having a bad week, reading a scary article or hearing a friend panic about Elon Musk’s latest tweet about dogecoin, however, is not a good reason to sell. The crypto market has had many crashes that looked catastrophic at the time to come back strong. Selling during a downturn locks in your losses and can mean missing out on market gains.
5. Keep track of taxes and transactions
The IRS considers crypto an asset. That means that selling or exchanging it can result in a profit or a loss, which makes keeping records of crypto purchase prices, dates and transactions extremely important.
Most exchanges provide your transaction history, but keeping your records adds another layer of documentation that can ease the reporting burden in the long run. For the 2025 and 2026 tax years, the IRS requires reporting on a new 1099-DA form from crypto investors.
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