After a 2024 marked by a spectacular resurgence of cryptocurrencies, with Bitcoin surging over 150% to break the mythical 100,000 USD threshold, we can assume that interest in this asset class will remain strong in 2025. Despite market volatility and uncertainties, enthusiasm among both retail and institutional investors shows no sign of waning. An increasing number of companies hold crypto in their reserves, and some nations are even considering strategic Bitcoin reserves, reflecting its growing adoption.
In this bullish climate, the timing still appears favourable for investing in cryptocurrencies. However, succeeding in this space requires strategic choices and reliable methods to maximise returns while controlling risks.
Discover five essential approaches for investing wisely in cryptos this coming year:
#1 - Invest in cryptocurrencies without direct holding with ETFs and ETPs
For investors who want to avoid the complexities of managing a crypto portfolio themselves, ETFs (exchange-traded funds) and ETPs (exchange-traded products) are ideal solutions. In the UK, you can typically hold these products in a share dealing account or via your regular investing platform.
These financial instruments give your portfolio exposure to the fluctuations of underlying assets—in this case, major cryptocurrencies like Bitcoin and Ethereum—without you having to buy them directly. Although you don’t own the cryptos themselves, ETFs and ETPs come with benefits such as:
- Easy access: Available on standard brokerage platforms.
- Diversification: Some ETFs include multiple cryptocurrencies or blockchain-related assets.
- Security: No storage or hacking worries (assuming you use reputable, regulated brokers who safeguard accounts).
Since early 2024, Spot ETFs from providers like BlackRock or Fidelity have focused on Bitcoin and Ethereum, while others are planning to explore a wider range of crypto projects (XRP, Solana, …). Because Spot ETFs require the issuers to purchase cryptocurrencies as collateral, the success of these ETFs automatically increases demand (and thus potentially the price) of major cryptocurrencies.
Risks: these instruments charge annual management fees (ranging from around 0.20% to 1%), which you wouldn’t incur if investing in crypto directly. In addition, taxation can be less favourable since selling ETF or ETP shares in the UK is typically a taxable event under Capital Gains Tax (CGT) rules. By contrast, buying and holding cryptocurrencies directly may allow for different timing strategies when you switch between coins or stablecoins. Always check current HMRC guidance for how disposals are assessed.
#2 - Buy cryptocurrencies via a reliable online broker
For direct exposure to cryptocurrencies, going through a reputable online broker remains a classic and effective method. Centralised exchange (CEX) platforms like Binance, Coinbase, Kraken, or Bitpanda make buying, selling, and storing cryptos straightforward.
Why choose a reliable broker?
- Enhanced security against fraud and hacks
- Stronger regulation and compliance with standards
- Transparent and often competitive fees (compared to traditional stock brokers)
- Intuitive interface and trading tools for beginners and experienced traders alike
In 2025, to minimise risk, it is best to favour crypto brokers regulated in strict jurisdictions (such as the UK or the United States), where consumer protection and financial standards are well enforced.
Also read: Our comparison of the best cryptocurrency platforms.
#3 - Trade cryptocurrencies through CFDs
For those who prefer short-term approaches, CFDs (Contracts for Difference) allow you to speculate on cryptocurrency price movements without owning the underlying assets.
Advantages of CFDs:
- Ability to go long or short (profit from rising or falling prices)
- Leverage, increasing potential gains (but also losses)
- No need for a crypto wallet or private key management
However, this method is best suited for experienced traders, as CFDs carry a high risk of rapid losses. In 2025, platforms like eToro and IG Market provide advanced tools for CFD trading on Bitcoin, Ethereum, and even popular altcoins.
Also read: Our comparison of the best CFD brokers.
#4 - Store your cryptocurrencies securely with a wallet
Security remains a priority for any crypto investor. Hardware wallets (like Ledger and Trezor) and software wallets (like BlueWallet or Coinomi) are essential for protecting your assets from hacks and accidental loss. They are designed mainly for longer-term storage (rather than active trading, which involves frequent transfers between your wallet and the exchange). Most importantly, these solutions let you retain your private keys instead of entrusting them to a centralised exchange (CEX). Don’t forget the motto: Not your keys, not your crypto.
Types of wallets:
- Hardware wallets: Offline (“cold storage”), offering maximum protection.
- Software wallets: Easy access and convenient for frequent transactions.
For 2025 and beyond, if you do not plan to trade often on exchanges, it’s best to avoid keeping large amounts of crypto long term on centralised exchange platforms, as they remain vulnerable to cyberattacks and effectively hold your digital assets on your behalf.
#5 - Take part in staking and DeFi platforms
Staking and decentralised finance (DeFi) platforms (often known as DEXs) offer an opportunity to earn passive income while contributing to the security and operation of blockchain networks. However, due to its complexity, this approach is generally recommended for more knowledgeable crypto users.
Staking:
- You lock up your crypto (e.g., Ethereum or Cardano) to validate transactions on the blockchain.
- In return, you earn additional token rewards.
DeFi platforms:
- They let you lend your crypto or provide liquidity in exchange for attractive interest.
- Projects like Aave, Compound, or Uniswap remain leaders in 2024, though carefully selecting safe platforms is crucial in this rapidly evolving environment.
- You can also participate in pre-sales (ICOs) for promising new cryptocurrencies and benefit from airdrops.
This combination of yield and active participation in the crypto ecosystem can be very appealing, but requires a solid understanding of the risks involved.
Also read: Top 5 most profitable strategies for cryptocurrency trading.
Conclusion
In 2025 and the years to come, investing in cryptocurrencies will likely remain a profitable endeavour if done thoughtfully and with diversification. Learn to differentiate major cryptocurrencies from smaller altcoins. The former have a solid project foundation and a robust community—like Bitcoin, Ethereum, Ripple, etc.—and are suitable for multi-year holding. The latter might benefit from short-term hype but are less likely to produce long-term value (though they can be interesting for trading). Whether you opt for ETFs or ETPs for simplicity, direct purchases for lower fees, staking to earn passive rewards, or leveraged CFD trading for short-term opportunities, it’s crucial to stay informed and remain cautious of market risks. As always, only invest what you’re prepared to lose, and start by assessing potential risks rather than just potential gains.
