Are You One of the Millions of People Afraid of Investing in Cryptocurrency? Here Are 3 Ways to Invest in Crypto That Will Let You Sleep at Night.

Source Motley_fool

Cryptocurrencies' price charts look like a cardiogram after a triple espresso. Bitcoin is up more than 1,060% in the last five years, but it has experienced multiple drawdowns in excess of 80% in its lifetime so far.

It's little wonder that 63% of U.S. adults say they have little to no confidence in crypto's safety or reliability as an investment, per a survey by Pew Research. However, a 2025 Motley Fool research report found that 1 in 5 of the American adults it surveyed held cryptocurrencies, and 42% of those surveyed claimed they would buy crypto in the next year.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Bitcoin Price Chart

Bitcoin Price data by YCharts

The good news is that you do not need steel nerves or uncanny luck to invest in cryptocurrency. Three straightforward habits can turn cryptocurrency investments from sleep thieves to profitable (if exciting) investments. Here's what to do.

1. Work around volatility intelligently

Volatility in cryptocurrencies is the dragon most investors fear, yet there's a relatively easy move that can turn it from a terror-inducing roller-coaster ride with your portfolio in the balance into a neutral fact of life that you can work around like it's the weather.

Dollar-cost averaging (DCA) means buying a fixed dollar amount on a set schedule. When prices fall, you pick up more units; when they soar, you grab fewer. Using a DCA strategy can meaningfully reduce your maximum drawdowns compared with lump-sum buys. It also might reduce your returns a little bit under certain circumstances, but don't fret about that at all.

It's a lot better than accidentally buying a coin at the very top of its price range, only to see your investment immediately go deeply underwater for months or longer. It takes the pressure off because it automates your decision-making, taking emotion out of the loop and preventing anxiety in the process.

A weekly auto-purchase through a brokerage or an exchange-traded fund (ETF) converts the uncertainty into disciplined accumulation without mental gymnastics. Tie the buy to your payday and let the software do the heavy lifting.

Three people seated at a table, with a laptop, while involved in a discussion.

Image source: Getty Images.

2. Stick to established winners

After you automate when and how much to invest, the next step is to tighten up the assets you're investing in.

There are many terrible investments in cryptocurrency. They will lose all of the money you invest -- in many cases, literally 100% of it. There is no need to go out on a limb and invest in small altcoins or meme coins in hopes of generating 10 times or 100 times your money. Those are traps that can literally destroy your portfolio's value.

Ethereum, XRP, and Solana join Bitcoin in commanding roughly 75% of the entire crypto market cap, with Bitcoin alone hovering near 61%. Their liquidity is deeper, trading spreads are tighter, and there is real institutional research to scrutinize, which is far better terrain for long-term investors than thinly traded meme tokens.

These majors also map more cleanly onto concepts that stock pickers already understand, like network fees (akin to revenue), developer activity (research and development), and hash rate or validator count (production capacity). That makes them a lot easier to evaluate.

In contrast, smaller coins often live or die by social media hype and opaque tokenomics, leaving investors guessing about their intrinsic value -- and often guessing extremely incorrectly.

Sticking to leaders dramatically reduces both rug-pull risk and the headache of moving obscure tokens between wallets. It will very likely power better returns with fewer frightening pullbacks, too.

3. Don't go overboard with your allocation

Even crypto believers with patience and careful investing habits need guardrails. The easiest way to tame your crypto fears is to keep your dabbling limited to a small proportion of your portfolio's overall value. That way, if you suffer unexpectedly high losses, it won't be that meaningful in the long term.

You could perhaps start at 1%, all in Bitcoin, and grow it via dollar-cost averaging. After a year and at least one gut-check dip, reassess your nerves. If your stomach and thesis both hold, maybe nudge toward an allocation of 3% to 5%, spread across the big four.

If you're still feeling confident a year later, you could cap your exposure near 10%; beyond that threshold, crypto's volatility hijacks portfolio risk, turning a satellite position into the portfolio's emotional center of gravity, which isn't desirable.

As you accept crypto risk, you might also want to

Other things in your portfolio should stay boring the more risk you accept via a crypto allocation. That ballast turns crypto's wild moves into asymmetric upside rather than an existential threat.

Where to invest $1,000 right now

When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 791%* — a market-crushing outperformance compared to 174% for the S&P 500.

They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor.

See the stocks »

*Stock Advisor returns as of June 9, 2025

Alex Carchidi has positions in Bitcoin, Ethereum, and Solana. The Motley Fool has positions in and recommends Bitcoin, Ethereum, Solana, and XRP. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Ripple’s $21 Trillion Dream: What Capturing 20% Of SWIFT Volume Means For XRPRipple Labs, a crypto payments company, continues to set its ambitions and those of XRP higher than ever as it edges closer to disrupting the global financial messaging giant SWIFT. After Ripple CEO
Author  NewsBTC
7 Month 14 Day Mon
Ripple Labs, a crypto payments company, continues to set its ambitions and those of XRP higher than ever as it edges closer to disrupting the global financial messaging giant SWIFT. After Ripple CEO
placeholder
Australian Consumer Confidence Hits 3-Year High on RBA Rate CutsAustralian consumer sentiment soared to its highest level in over three years in August, buoyed by recent Reserve Bank of Australia (RBA) rate cuts and easing cost-of-living pressures, according to a Westpac-Melbourne Institute survey released Tuesday.
Author  Mitrade
8 Month 19 Day Tue
Australian consumer sentiment soared to its highest level in over three years in August, buoyed by recent Reserve Bank of Australia (RBA) rate cuts and easing cost-of-living pressures, according to a Westpac-Melbourne Institute survey released Tuesday.
placeholder
Small Caps and Value Stocks Lead Gains as S&P 500 AdvancesLast week, the S&P 500 continued its upward momentum despite notable shifts in market leadership.
Author  Mitrade
8 Month 19 Day Tue
Last week, the S&P 500 continued its upward momentum despite notable shifts in market leadership.
placeholder
OpenAI Introduces Lowest-Cost ChatGPT Subscription in India with UPI Payment OptionOn Tuesday, OpenAI introduced ChatGPT Go, its most affordable AI subscription tier, targeting the price-sensitive Indian market. Nick Turley, OpenAI’s Vice President and Head of ChatGPT, announced the launch via an X post, highlighting that users can pay through India’s Unified Payments Interface (UPI).
Author  Mitrade
8 Month 19 Day Tue
On Tuesday, OpenAI introduced ChatGPT Go, its most affordable AI subscription tier, targeting the price-sensitive Indian market. Nick Turley, OpenAI’s Vice President and Head of ChatGPT, announced the launch via an X post, highlighting that users can pay through India’s Unified Payments Interface (UPI).
placeholder
Bitcoin Dips to Two-Week Low Around $113K Ahead of Fed Jackson Hole EventBitcoin continued its downward trajectory on Wednesday, hitting a two-week low as investors trimmed their positions ahead of the Federal Reserve’s upcoming Jackson Hole symposium.
Author  Mitrade
8 Month 20 Day Wed
Bitcoin continued its downward trajectory on Wednesday, hitting a two-week low as investors trimmed their positions ahead of the Federal Reserve’s upcoming Jackson Hole symposium.
goTop
quote