Crypto pushed into 2025 boldly. While multiple factors powered its surge, Donald Trump’s return to the White House underscored crypto’s growing grip on today’s zeitgeist, including his vow to make America the “crypto capital of the planet”. Now a global force, crypto attracts investors seeking diversification, inflation hedging and high returns. But with thousands of assets flooding the market, How can you access the cryptocurrency market?

Invest directly: Cryptocurrencies, coins and tokens

One of the most straightforward ways to invest in crypto is by purchasing digital assets directly. Popular purchase options include cryptocurrencies, coins and tokens. 

Cryptocurrencies are blockchain-based digital currencies enabling direct online payments. A blockchain is a distributed database that maintains a continuously growing list of ordered records, called blocks. Similar to other currencies, like the euro or the dollar, they’re decentralised and issued by multiple sources. Thousands of cryptocurrencies exist, each with unique features and challenges.

A cryptocurrency with its own blockchain is called a coin. Bitcoin, which famously surpassed USD 100K in 2024 to hit an all-time high, is seen as a store of value similar to gold – it’s fixed supply and strict monetary policy help resist inflation and appeal to institutional investors. Similar to gold, the price of Bitcoin is impacted by the forces of supply and demand. Much like other asset classes, the media, and regulatory and geopolitical changes also impact the price. 

Unlike traditional currencies, Bitcoin operates independently of central banks and governments, which means it isn’t subject to conventional monetary policies, inflation rates, or economic indicators that usually impact a currency’s value. 

Alternatives like Ethereum and Solana attract investors seeking blockchain utility beyond transactions. Both power smart contracts – self-executing agreements that automate processes, remove intermediaries and boost efficiency, speed and innovation.

Tokens offer another option. Unlike coins, they are digital assets built on existing blockchains. Not all tokens are cryptocurrencies; they serve diverse functions, from representing ownership in assets to facilitating blockchain transactions. NFTs (non-fungible tokens), for instance, represent ownership of digital art, music, and virtual real estate.

How to purchase crypto assets directly

Purchases can be made through centralised cryptocurrency exchanges (CEXs), brokerage platforms, payment apps or crypto ATMs, depending on the platform, region, and applicable regulations. As fees, transaction speeds and security measures vary, it’s important to compare options.

It’s also crucial to understand custody. While using a CEX, the platform holds the private keys to your assets, meaning you don’t have full control unless you transfer them to a private wallet. This is similar to how banks hold customer deposits, rather than individuals having direct possession of their money.

Crypto ETFs and funds: A hands-off approach 

Want exposure to digital assets without managing wallets, private keys, or exchanges? Crypto ETFs and some crypto funds offer a way to invest in cryptocurrency markets without directly owning digital assets. 

Crypto ETFs trade on stock exchanges and are available through brokerage accounts, similar to stocks or mutual funds. For example, Bitcoin futures ETFs are traded on the Chicago Mercantile Exchange (CME). As a type of exchange-traded product (ETP), crypto ETFs are regulated and accessible to retail investors via traditional platforms.

In contrast, crypto funds – including hedge funds, venture capital funds and private investment vehicles – don’t always follow the ETP model and regulation varies according to jurisdiction and structure. Catering mainly to institutional and accredited investors, they offer greater flexibility, but they often require higher capital commitments and face fewer disclosure requirements.

These options simplify crypto investing by bypassing the complexities of direct asset management. For instance, crypto closed-end funds are professionally managed, providing exposure to digital assets under a predefined mandate. However, it’s important to note that ETFs and ETPs can’t be used for direct crypto transactions, as they’re investment instruments and not functional cryptocurrencies.

In crypto, risk profiles trump all

By no means an exhaustive list of market entry strategies, all options discussed make one thing clear: navigating crypto requires more than just recognising investment options. It also requires understanding crypto’s inherently disruptive nature and whether this fits your risk profile. 

A volatile and intangible asset class whose meteoric rise has delivered both substantial gains and steep losses, crypto has nonetheless cemented its place in global finance. It commands the attention of regulators, governments, and institutional investors, as Trump’s creation of a crypto task force reflects. And, amid geopolitical and economic uncertainty, crypto is gaining legitimacy as a decentralised, cost-efficient diversification tool for hedging against inflation and financial instability. Crypto isn’t for everyone. Beyond risk assessment, its constant media presence can fuel emotional decision-making. This is where applying behavioural finance principles can help investors stay rational. Afterall, when stepping into the crypto arena, managing emotions and risk is key to success.

 Please note: the information provided is for educational purposes only.