Cryptocurrency has become a popular choice for diversifying one’s investment portfolio. This asset class offers high potential returns but also carries significant risks, so carefully consider before deciding how much to invest in crypto per month.

To help make an informed decision, read this guide that answers how much to invest in crypto and outlines the key factors to consider.

How Much Should I Invest in Cryptocurrency Key Tips

Before delving into our comprehensive analysis, consider these key factors:

  1. Budget and Disposable Income: Before investing in cryptocurrency, evaluate your monthly budget and determine your disposable income.
  2. Avoid Debt: You should never invest in cryptocurrency with borrowed money; if the value of the portfolio decreases, you will still owe the full amount borrowed to the lender.
  3. Diversify: Diversify investments in multiple cryptocurrencies to reduce impact of poor performance on overall portfolio.
  4. Dollar-Cost-Average: Investing a fixed amount of money at regular intervals, regardless of the current market conditions. Some premier crypto exchanges support recurring buy orders, which can assist with a dollar-cost averaging strategy.
  5. Time in the Market: Investors must carefully consider the duration they are willing to hold onto the cryptocurrencies they have purchased.
  6. Liquidity: While the top 100 cryptocurrencies usually have a lot of liquidity, smaller projects may not. Investing in a cryptocurrency with low liquidity can make it difficult to cash out.
  7. Consider Investing in Low-Cost Presales: These allow investors to purchase newly issued cryptocurrencies from start-up projects.

Wall Street Memes (WSM) - Newest Meme Coin

Our Rating

Wall Street Memes
  • Community of 1 Million Followers
  • Experienced NFT Project Founders
  • Listed On OKX
  • Staking Rewards
Wall Street Memes

How to Decide How Much Money to Invest in Cryptocurrency

There are seven key strategies to assess suitable cryptocurrency investment stakes. Let’s see how to start investing in cryptocurrency and determine how much to invest in cryptocurrency for beginners.

1. Budget and Disposable Income

Investors should evaluate their financial situation before buying cryptocurrency. They should write down their monthly expenses and income to determine their disposable income. The focus should be on core expenses such as:

  • Rent or mortgage payments
  • Food and other household essentials
  • Utilities
  • Travel
  • Etc.

After assessing fixed and variable expenses, investors should then be able to identify how much disposable income is available. This essentially refers to the amount of cash available to an individual or couple after all core expenses and outgoings are comfortably covered.

2. Avoid Debt

The next consideration to make when assessing how much to invest in cryptocurrency is to ensure that debt is avoided. This is super-important, as it can be tempting to buy Bitcoin with a credit card or through a loan to maximize investment stakes. However, it is also important to remember that cryptocurrency prices can go up as well as down – for extended periods of time.

  • For example, let’s say that somebody decides to invest in cryptocurrency with a credit card that comes with an APR of 25%.
  • The investor decides to max out the card at a value of $10,000
  • At the time of the investment, Bitcoin is trading at $63,000
  • When the credit card statement arrives, Bitcoin is trading at $47,000 – representing a decline of 25%
  • This means that the $10,000 investment is now worth just $7,500
  • However, the investor still owes the credit card company $10,000 – in addition to interest if the full amount isn’t paid off.

The investor could sell just a small segment of the Bitcoin to at least cover the minimum credit card balance requirement.

However, in doing so, this would then attract interest and perhaps a stain on the investor’s credit score. In the above example, Bitcoin dropped by 25% – which is, of course, a sizable decline. . As a result, this should further demotivate people from investing in cryptocurrencies with debt.

3. Diversification 

To invest in crypto, diversification is crucial. It’s a risk management approach that ensures that investors don’t put all their money into one option. Investors should diversify within the cryptocurrency market itself, as there are thousands of cryptocurrencies available across various project types.

This means that creating a diversified portfolio is a relatively straightforward task.

Ever wondered how much Bitcoin should I buy right now? Though some risks are still involved, larger cryptocurrencies have displayed more stability than smaller or newer coins. Yet, it’s worthwhile to consider rebalancing by taking some profits from selected assets and investing them in promising newer projects with practical applications if such an opportunity arises.

Allocating the entire investment amount of $5,000 to only one cryptocurrency, such as Bitcoin, is not recommended. Such a portfolio would be overexposed to one market and one cost price. For example, if Bitcoin’s price declined by 50%, the portfolio’s value would also decrease by 50%. A diversified portfolio with a 20% allocation to Bitcoin, 40% to top-10 projects, and 40% to crypto presales would spread the investment across multiple cryptocurrencies. This diversification strategy would minimize risks and increase the chances of a profitable return.

This means that while Bitcoin might underperform, other cryptocurrencies within the portfolio have every chance of generating notable gains. As a result, the overall value of the portfolio could cover the Bitcoin losses and actually provide the investor with an upside.

4. Dollar-Cost-Average

Dollar-cost averaging is another proven strategy that will help answer the question – how much should you invest in cryptocurrency? This strategy is utilized by many seasoned investors who wish to adopt a long-term ‘buy and hold’ strategy. Dollar-cost-averaging will, therefore, not be suitable for short-term traders.

Nonetheless, the main concept with dollar-cost-averaging is to enter the cryptocurrency markets gradually by investing slow and steady amounts at fixed periods.

Ethereum price chart

DCA, or Dollar Cost Averaging, is a strategy where you invest a fixed amount at regular intervals, regardless of market conditions. This approach is beneficial as it enables you to purchase more when prices are low and less when prices are high. This strategy effectively reduces the impact of market volatility on your investment portfolio.

Dollar-cost-averaging is a smart long-term investment strategy. Since 2009, there have been several examples of cryptocurrencies that have benefited from this approach. Ethereum, for example, rose from $8 to $1,300 in 2017, then fell to $85, before reaching new highs of almost $5,000 in 2021. By dollar-cost-averaging, investors can make significant gains over time, regardless of whether the cryptocurrency is on an upward or downward trend.

Over time, consistently investing even a small amount, such as $100 worth of Ethereum each month, can lead to significant compounding returns while circumventing the impact of short-term volatility. You can also consider occasionally making opportunistic extra purchases when the market dips significantly.

So, if you’re wondering whether it’s too late to buy Ethereum the answer is entirely dependent on your investment goals and risk tolerance.

5. Time in the Market

Another assessment to make when evaluating how much to invest in cryptocurrency is the amount of time to spend in the market. As we discussed in the section above, long-term investors generally do much better than those who try to time the market based on current trends.

  • For example, in Q1 2020 – when covid-19 was declared a pandemic, the value of Bitcoin went from approximately $10,000 to just $5,000 in a matter of days.
  • This resulted in many investors panic selling at a 50% loss.
  • Those that avoided selling would have then enjoyed an extended bull run that result in Bitcoin hitting highs of $69,000.

The key point here is that while long-term strategies are typically the best way to go, this won’t be suitable for everyone. The reason for this is that it can take several years for cryptocurrencies to generate a return – if at all.

For instance, it took Bitcoin nearly three years to regain the $20,000 all-time high that it initially generated in December 2017. During this timeframe, many investors opted to sell – often because of a requirement for capital. And if this is the case, investors needing access to fast money might be forced to sell their cryptocurrencies at a loss.

This is why it is important to be realistic about the amount of time that investors remain in the cryptocurrency market. Those that are looking to make short-term gains might be more suited for crypto day trading or presale campaigns. The latter enables investors to buy a newly launched token at a discount before it is listed on an exchange – more on this later.

6. Liquidity

Liquidity is an important factor to consider irrespective of the asset class – whether that’s crypto, stocks, ETFs, or commodities. This refers to the amount of capital that a specific market attracts and how readily the investment can be sold.

For example, Bitcoin and Ethereum are both highly liquid digital assets. Over the past 24 hours alone, Bitcoin and Ethereum have attracted $55 billion and $23 billion in trading volume. This results in two crucial outcomes. First, investors can cash their Bitcoin or Ethereum tokens out at any given time – meaning that there will never be an issue finding a buyer.

Second, due to the sheer amount of trading volume in the market, investors can sell their Bitcoin or Ethereum at a fair price without needing to worry about slippage or wide spreads.

Now, this isn’t to say that investors should avoid smaller projects with low trading volumes. On the contrary – as we cover shortly,  smaller projects often represent the best crypto winter tokens to buy.

The key point is that the investment portfolio should also contain larger-cap projects like Bitcoin and Ethereum. This will ensure that at any given time, if the investor needs access to fast cash, there will always be enough liquidity in the market to achieve this goal.

7. Consider Investing in Low-Cost Presales

Leading on from the above section, we can now discuss presales in the context of how much to invest in cryptocurrency.

Crypto presales – otherwise referred to as ICOs (initial coin offerings), enable newly launched projects to raise capital from outside investors. The investor will invest a popular cryptocurrency into the presale – such as Bitcoin or Ethereum. And in return, the investor will obtain the project’s new, native cryptocurrency.

In this regard, presales are somewhat similar to the best upcoming IPOs (initial public offerings). This is because early investors in the IPO will typically get the best stock price possible. This is also the case with crypto presales. Meaning, that early investors can buy the respective cryptocurrency at the lowest price, subsequently resulting in an upside once it is listed on an exchange.

What Percentage of Your Portfolio Should be Crypto?

As per the above section, there is no hard and fast answer when it comes to the best crypto portfolio allocation.

Experts suggest a cautious approach to investing in cryptocurrency, allocating only 5% of the portfolio, while some suggest even less. Mark Cuban, on the other hand, goes one step further by suggesting that retail clients should only invest amounts into cryptocurrency that they are prepared to lose.

More bullish cryptocurrency analysts suggest a more aggressive approach, especially for those under the age of 35. This is because younger investors can take more risk when building a portfolio, considering that they have many years to recover losses in the event the respective cryptocurrency investments do not go to plan.

It all boils down to personal goals, tolerance for risk, and crucially – how much money investors are prepared to lose.

With that being said, a report by the Chartered Financial Analyst (CFA) yielded some very interesting results that show portfolios don’t need to be over-exposed to crypto to see notable results.

The CFA study showed that between January 2014 and September 2020, allocating just 2.5% to Bitcoin outperformed traditional portfolios by 24%. This is impressive considering the small percentage allocated.

But once again, the specific percentage allocation should be determined on a case-by-case basis. The most important thing is that investors avoid investing more than they can afford to lose.


Determining how much to invest in crypto per month requires several strategies, including diversification, analyzing one’s budget, using the dollar-cost-averaging method, and managing portfolios effectively. Establishing your financial goals, evaluating your risk tolerance, and staying informed through market research is crucial.

Finally, consider exploring low-cost, high-potential crypto presales, which often offer discounted prices on digital assets as incentives for early investment in the project.

Wall Street Memes (WSM) - Newest Meme Coin

Our Rating

Wall Street Memes
  • Community of 1 Million Followers
  • Experienced NFT Project Founders
  • Listed On OKX
  • Staking Rewards
Wall Street Memes


How much should you invest in crypto?

How much can I start with in cryptocurrency?

What is the best cryptocurrency for beginners?