Is $100 Enough to Start Crypto: How Much You Could Earn

Published: 4th June, 2024 | Last Updated: 4th June, 2024

Markos Koemtzopoulos

Markos Koemtzopoulos is the founder and main writer of ElementalCrypto. He has been a lecturer at the University of Nicosia on cryptocurrencies and DeFi and has taught two courses on crypto and blockchain technology.

Is 100 Enough to Start Crypto: Yes, most crypto exchanges will allow you to start crypto trading with as little as $1 so $100 is more than enough. The question is whether you should invest more. In this article, I will help you think this through. 

This article is part of my series on how to buy crypto.

How to decide if 100 dollars is enough to start investing in crypto

I am going to help you decide what is a good amount for you based on your investment strategy.

There are three ways you can play this. 

  • Short term investing
  • Long term inventing
  • Dollar Cost Averaging

1. Short term investing

 Let’s assume you are doing this to earn a profit over a few months. You don’t plan to keep crypto assets for the long run but you see a bull run starting and you want in on the game

Heuristic Number 1

I want you to project yourself into the future and assume that you used that $100 to invest in a cryptocurrency that grew by a multiple of 10. This is an extremely good scenario. Nevertheless it’s a plausible one for those who buy low and sell high at approximately the right time. 

Congratulations you are not the proud owner of $1,000. 

Are you happy?

It depends on your age, where you live, and expectations.

Assume you didn’t have much money to start with,  that you live in rural India where life is cheap, and that you invested $100 in crypto and forgot about it only to discover one day that it’s now worth $1000. If you were that person you’d be elated. 

However, if you are a 30-year-old living in New York making a decent wage and invested 100 bucks to see what will happen you’d be super annoyed with yourself. You’d be thinking “Man what if I had invested $1,000 or what if I had invested $10,000.”

Lesson Number 1

So lesson number 1 is: Don’t be a wimp. Not being a wimp depends on your individual financial circumstances but for the New Yorker on a good salary of 200K per year it’s somewhere in the vicinity of $10K to $50K. 

Important caveat: I assume you are investing in the beginning or middle of a bull run and that you are not going to do something foolish like buy Dogecoin or other meme coins. If that’s your plan you should stop reading this site and seek advice elsewhere. 

Heuristic Number 2

Now project yourself into the future and assume that you incur significant losses and lose 90% of your investment. This happens frequently to people and if it’s your first time investing it can happen to you too.

investing 100 in crypto

It plays out somehow like this:

The market drops. You do nothing

The market drops again. You do nothing again 

The market drops yet again. Again you do nothing hoping that it will miraculously go back up. 

Going back to our New Yorker. Would you be ok if you had invested 100K and now only had 10K left? If that thought makes you feel uncomfortable then you know you need to invest less than $100K

Lesson number 2: Don’t be greedy. 

You want to find something palatable between those two extreme scenarios. 

The other alternative is that you are thinking of the long run. 

2. Long term investing

long term crypto investing

If you plan to invest in crypto over a 20-year time horizon any amount is good to start with. In this scenario, if you know nothing about crypto you would invest in Bitcoin and Ethereum. Bitcoin because it is the largest coin in terms of market cap and Ethereum because it has the largest network effects. If everyone is building stuff on Ethereum there is no reason to build elsewhere. 

Now here too you are taking a bet that Bitcoin and Ethereum are going to play a significant part in humans’ future. Personally, I think that is a safe bet. However, you need to account for the change that world governments collude to stop people from buying cryptocurrencies as they have attempted to do in China. 

This means that even for long-term investing you need to hedge your bets. Do not invest everything in digital assets only. Make sure you build a diversified portfolio that includes real estate, stocks, bonds, commodities, ETFs, mutual funds, and other financial products. 

If you only have $100 to start with it is a good amount. The important part is to get started. If you can start with a larger amount it will make a significant difference. There are three factors that affect how your funds will grow

  1. How much you invest
  2. The rate at which the value of your investment grows
  3. How early you start

If you are young then starting with $100 on a weekly or monthly basis can lead to surprising returns over the long term. 

which brings us to the third way to invest $100: dollar cost-averaging

3. Dollar cost averaging

dollar cost averaging into crypto

DCA is an investment technique where an investor divides the total amount of money to be invested across periodic purchases of a target asset. The goal is to reduce the impact of volatility on the overall purchase. Purchases occur regardless of the asset’s price and at regular intervals, which could be daily, weekly, or monthly.

How DCA Works in Crypto

  1. Regular Investment Intervals:
    • An investor decides to invest small amounts of money (e.g., $100) into a cryptocurrency (e.g., Bitcoin) at regular intervals (e.g., monthly).
  2. Fixed Investment Amount:
    • At each interval, the same amount of money is used to purchase the cryptocurrency, regardless of its price at that time.
  3. Purchase More When Prices are Low:
    • When the price of the cryptocurrency is low, the fixed investment amount buys more units of the asset.
    • When the price is high, the fixed investment buys fewer units.

Example of DCA in Crypto

Let’s say you decide to invest $100 into Bitcoin on the first day of every month:

  • January 1st: Bitcoin price is $10,000 → You buy 0.01 BTC
  • February 1st: Bitcoin price is $12,000 → You buy 0.0083 BTC
  • March 1st: Bitcoin price is $8,000 → You buy 0.0125 BTC

Over time, you accumulate Bitcoin at an average cost that reflects the market’s volatility without needing to time the market.

Benefits of DCA

  1. Reduces Timing Risk:
    • Investors do not need to worry about buying at the highest prices or missing out on buying at the lowest prices.
    • It spreads the investment over time, reducing the risk of investing a large amount in a single transaction.
  2. Simplifies Investment Process:
    • DCA is straightforward and does not require active management or market predictions.
    • It can be automated through many cryptocurrency exchanges and investment platforms.
  3. Mitigates Emotional Investing:
    • Regular investing reduces the emotional impact of market volatility, as the strategy is consistent regardless of market conditions.
    • Investors are less likely to make impulsive decisions based on short-term price movements.
  4. Encourages Discipline:
    • Investors commit to a regular investing schedule, promoting discipline and long-term thinking.

Considerations

  • Volatility: While DCA reduces the impact of volatility, it does not eliminate it. The strategy works best in a volatile market, which is typical for cryptocurrencies.
  • Fees: Frequent buying can incur higher transaction fees. It’s important to choose platforms with low fees to maximize the benefits of DCA.
  • Market Conditions: In a long-term bear market, DCA could result in a higher average cost compared to a lump-sum investment. Conversely, in a bull market, DCA might not maximize returns compared to a lump-sum investment.

How to start investing $100

You can buy crypto on an exchange like Coinbase or a brokerage such as Robinhood. Crypto Exchanges have a wider range of crypto to choose from whereas brokers also offer stocks and ETFs. 

I recommend you don’t shy away from crypto exchanges. If you are going to get into this game you might as well have a wider range of coins to choose from. 

To buy crypto you will need to make a deposit. You can use a debit card but this will eat away 3-5 dollars in fees. The cheapest way to deposit is to make a bank transfer. If you live in the United States making an ACH transfer is often free and instant. In Canada, you can use Intera e-Tranfers while in Europe you can make a wire transfer or SEPA transfer. 

Once you have giat currency on the exchange you need to select the crypto you want to buy and click the buy button. 

New investors should be sure they are using the pro version of the exchange. Trading fees are less than 1% on the pro version version the standard version that can take 5%. You will see two types of buy orders when you try to spend your $100. 

  1. Market orders execute immediately at whatever the prevailing market price is
  2. A limit order executes only when the price of the assets drops to a threshold that you have specified, the limit price. Limit orders have lower trading fees but won’t execute unless the price meets the limit price. 

What to avoid if you only have $100 to invest

A banknote of 100 usd.
  • Don’t use leverage. Leverage is when you borrow more than you have to trade crypto. Don’t do this. It’s a surefire way to lose money. 
  • Don’t invest in meme coins. Investing in meme coins is akin to buying a lottery ticket. You are very likely to lose you a hundred bucks this way
  • Don’t use a credit card. Crypto exchanges outside the US accept credit cards. The deposit fees are high at 3-5% and the interest rate on credit cards is 20-35% even if you have a good credit score.
  • Making a transfer from your bank account is likely the cheapest payment method. Don’t pay high fees by using a debit card. 
  • If you are not experienced in cryptocurrency trading, educating yourself first is a good idea. Read Glenn Goodmans’s Crypto Trader to start with. I learned a few crypto trading basics that way that have helped me. 
  • The crypto market is volatile. If you are investing for the short term and you make a good return make sure to take profit. 

What crypto exchange should I use? 

Two desktops and one mobile screen showing crypto exchanges and trends.

Choose an exchange with good security features so that you can feel comfortable leaving your crypto investments there to start with. Things to look for are

  • It stores the majority of funds in cold storage
  • Uses two-factor authentication
  • Allows you to set a time delay for withdrawals. 

See 20 Crucial Factors to Look for in a Cryptocurrency Exchange for more tips.

FAQs

Do I need a crypto wallet to invest $100? 

Crypto wallets are a way for you to take self-custody of your own funds. Even if you only invest $100 learning how to use a digital wallet and manage your private keys is part of the crypto journey. You can start by using a hot wallet that is free to use and you can download it on your phone. Popular wallets are Exodus, Metamask, and Guarda. Later on, you can purchase a hardware wallet for added security. However to start with you just store your funds in one of the large crypto exchanges. See the top 10 crypto exchanges for which ones I recommend.

What is the minimum amount to start crypto?

Crypto exchange will allow you to start buying digital currencies for as little as $1. In general, $100 is a good amount to start with to get a sense of how exchanges and wallets work. 

Which coins should I buy with my $100? 

Established coins such as Ethereum and Bitcoin have less volatility and are likely to grow in the future. If you have a higher risk tolerance look for new coins with lower market capitalization and more potential to grow. Many of these coins are also likely to go back down in price after the bull run. You should avoid high-risk investments such as meme coins if you only have a little cash. In my crypto crash course, I teach you how to research coins. 

How much will $100 Bitcoin be worth in 10 years?

If Bitcoin replaces gold as a store of value then you are looking at a price of $700,000 per bitcoin. This means that your $100 could be worth $700 by then. 

Is buying $100 worth of Bitcoin worth it?

No the market cap of Bitcoin is $1.3 Trillion. Even if this grows by ten times your initial investment will only grow to $1000. You either need to buy bitcoin periodically say every month or you ought to choose an asset that you believe has higher growth potential. Trending themes this bull run are AI, Real-world assets, gaming, and DePIN. 

Is it a good time to invest in crypto? 

At the time of writing the crypto market is in a bull run. To decide if it’s a good time make sure you look at technical indicators and listen to what the experts are saying. If everyone is extremely euphoric it’s time to pull out of the market. 

Is crypto profitable for beginners?

Yes, the world of cryptocurrency can be profitable for beginners but you need to educate yourself. The best strategy to achieve this is to read the content on this site. Get started on my Crypto 101 page. 

Markos Koemtzopoulos is the founder and main writer of ElementalCrypto. He has been a lecturer at the University of Nicosia on cryptocurrencies and DeFi and has taught two courses on crypto and blockchain technology.

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