Getting started with Bitcoin and Ethereum: How to take your first steps in crypto

For those who have never worked with digital currencies before, the world of Bitcoin (BTC) and Ethereum (ETH) can seem quite complicated. However, it doesn’t have to be that way. With the right knowledge and preparation, you can quickly get started with your first investments.

The basics: what you need to know about crypto investing

Crypto investing simply means buying digital currencies in the hope that their value will increase. This works the same as buying stocks, only with a much higher risk. Bitcoin is considered the digital gold of the crypto world, while Ethereum is mainly interesting because of the blockchain platform it runs on.

Besides these two major players, there are thousands of other coins (so-called altcoins) like Solana, Cardano, and Avalanche. Many beginners focus on one coin, while others diversify their investments across multiple projects to reduce risk.

Current market values (January 2026):

• Bitcoin (BTC): $96.17K (24h: -0.66%)
• Ethereum (ETH): $3.29K (24h: -1.60%)

It is crucial to understand that crypto is not a quick path to wealth. Prices fluctuate wildly, and you can just as easily incur losses as gains. That’s why you should only invest money you can afford to lose.

How does it actually work? The technical side

The heart of crypto is formed by the blockchain—a digital network that records all transactions in blocks. This technology ensures transparency and security.

To store your digital currencies, you need a wallet (a digital wallet). There are two variants:

Hot Wallets: Online wallets connected to the internet. Handy for daily use and trading.

Cold Wallets: Offline hardware like USB sticks. Much safer for larger amounts because they are not online.

Key concepts you need to know

• Wallet address: Your personal account number on the blockchain
• Private key: The secret key to your crypto. Losing it means losing everything
• Gas fees: Small transaction costs you pay for each action
• Exchange: The trading platform where you can buy, sell, and trade crypto
• Volatility: The degree to which prices fluctuate—sometimes extremely within a single day

What do you need to get started?

Before you start, check if you have these three things arranged.

A reliable trading environment: Choose a recognized platform with a good selection of coins, low trading fees, and extra features like staking or trading bots. Ensure the platform complies with Dutch regulations and is registered with De Nederlandsche Bank.

A digital wallet: Whether you leave it on the platform or transfer to your own wallet depends on your amount and usage frequency. For larger investments, a hardware wallet is recommended.

An investment plan: Without a goal, there’s no focus. Decide beforehand whether you want to hold long-term (HODL) or actively trade. Do you want to trade daily and try to profit from daily price differences, or hold your coins for years?

Step by step: how to start investing

Step 1: Choose a platform

Select a reliable exchange. The platform should have at least these features: user-friendly dashboard, wide range of coins, and good security features.

Step 2: Create an account

Visit the website, click on sign up, enter your email address, and choose a strong password. You will receive a confirmation code by email.

Step 3: Verify your identity

This is mandatory in the Netherlands. Upload a photo of your passport or ID card. Some platforms also ask for a selfie. After verification (usually within a few minutes), you can start trading.

Step 4: Your first purchase

Deposit money via iDEAL into your account. Then choose a coin (Bitcoin or Ethereum are good starting points), enter the amount, and confirm. Done!

Step 5: Ensure security

Small amounts can stay on the platform. For larger sums: transfer to your own wallet. Consider:

• Activate two-factor authentication (2FA)
• Use a unique, strong password
• Enable email notifications for logins

Step 6: Build gradually

Don’t invest your entire budget at once. Choose two well-known coins like Bitcoin or Ethereum and buy small amounts regularly. This way, you learn the market while minimizing risk.

Why Bitcoin and Ethereum for beginners?

Bitcoin is the oldest and most well-known cryptocurrency. The name says it all: it’s like digital gold. Ethereum is more than a coin—it’s a complete platform for smart contracts and decentralized apps.

Both coins have advantages:

• High liquidity: you can always buy or sell them
• Strong reputation from years of existence
• Huge communities and support on almost every platform

Note: Avoid cheap hype coins like certain “meme coins.” These have no real function, are pumped via social media, and crash as quickly as they rose. Prefer investing in projects with proven value and transparent teams.

Classic beginner mistakes (and how to avoid them)

FOMO (Fear of Missing Out): You see everyone talking about a coin and quickly throw money in. Result: you buy at the peak and lose money. Solution: always do your own research first.

Panic selling: As soon as the price drops, you sell everything in panic. But volatility is part of crypto. Those in a hurry often lose. Only invest money you can afford to lose.

No strategy: Impulsive investing leads to bad choices. Set beforehand: what is your goal, and when do you accept a loss?

Putting all eggs in one basket: Investing your entire budget in one coin greatly increases risk. Diversify your investments.

Poor security: Your private key is the only thing standing between you and your crypto. Strong 2FA and passwords are not a luxury but a necessity.

Blindly following influencers: TikTok creators often lack knowledge themselves and get commissions for promotions. Make your own choices.

Summary of pros and cons

Advantages:

• Potential high returns
• Market runs 24/7
• You have full control
• No third-party intervention needed
• Access to innovative technologies
• Usable worldwide

Disadvantages:

• Extreme price volatility
• No protection from regulators
• 100% personal responsibility
• Complex technology with a learning curve
• Many scams and fake projects
• Regulations still in development

Practical tips for successful investing

Start small: Invest a modest amount to gain experience without big risk. This also helps you get used to volatility gradually.

Diversify your portfolio: Don’t put everything into one coin. Spread your investment to limit risk.

Use money that is surplus: Rent, groceries, savings—these are expenses, not investment funds.

Follow reliable sources: Subscribe to crypto news sites, not social media hype.

Cold wallet for large amounts: Hardware wallets offer maximum security for substantial investments.

Don’t chase trends: Don’t get carried away by hype on social media. Research first yourself.

Regulations and taxes in the Netherlands

Good news: crypto investing is legal in the Netherlands. The bad news: it’s not yet subject to the same strict rules as stocks, so you have more responsibility.

Platforms must register with De Nederlandsche Bank and comply with anti-money laundering rules. The AFM constantly warns that crypto is very risky.

How about taxes?

In the Netherlands, you pay tax on your cryptocurrencies, but not at the moment of purchase or sale. Instead, your crypto holdings are counted as assets in your annual income tax (box 3).

The Tax Authorities look at your total assets on January 1 each year. If you are above the exemption limit (about €57,000 per person in 2025), you pay tax on the excess.

What you need to do:

• Record the value of your crypto on January 1 (in euros)
• Report crypto on foreign exchanges
• Use reliable sources (CoinMarketCap, your exchange) for valuation
• Keep all transaction receipts

If in doubt, consult a tax advisor. Better safe than surprised later.

Finally

Crypto investing is not a race. It requires knowledge, patience, and discipline. Start small, diversify your risk, only invest money you can afford to lose, and take good care of your security.

Combining Bitcoin for long-term holding and Ethereum for more innovative investments provides a solid foundation. And remember: slow and steady wins the race. Building a well-founded portfolio is much safer than chasing quick profits.