After a 2024 marked by a spectacular resurgence of cryptocurrencies, with Bitcoin growing 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, proof of its growing adoption.
In this bullish climate, it still appears to be a good time to invest in cryptocurrencies although success in this market, i.e. maximising returns while controlling risks, means you'll need to make strategic choices using reliable methods.
Five essential approaches for investing wisely in cryptos this coming year:
#1 - Invest in cryptocurrencies without direct ownership by buying 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 the perfect solution. In the UK, you can typically hold these products in a share dealing account or via your regular investing platform.
ETFs and ETPs give your portfolio exposure to the fluctuations of the 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: ETFs and ETPs are available on most standard brokerage platforms.
- Diversification: Some ETFs include multiple cryptocurrencies or blockchain-related assets.
- Security: There are no storage or hacking worries associates with ETFs and ETPs (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. Other Spot ETFs 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: there are annual management fees (ranging from around 0.20% to 1%), which you wouldn’t incur if you invested in crypto directly. In addition, taxation can prove less favourable since selling ETFs or ETPs 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 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 quite straightforward.
Why choose a reliable broker?
- Enhanced security against fraud and hacks
- Stronger regulation and compliance with standards
- Fees that are transparent and, often, competitive (compared to traditional stock brokers)
- Intuitive interfaces and trading tools for beginners and experienced traders alike
In 2025, if risk minimisation is your aim, it is best to favour crypto brokers who are regulated in strict jurisdictions (such as the UK or the United States), where consumer protection is 'de rigueur' and financial standards are fully 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 - Use a wallet to store your cryptocurrencies securely
Security remains top priority for any crypto investor.To protect your assets from hacks and accidental loss, it is shrewd to store them in hardware wallets (like Ledger and Trezor) and software wallets (like BlueWallet or Coinomi). They are designed mainly for longer-term storage, (rather than active trading (which involves frequent transfers between your wallet and the exchange). Most importantly, with these solutions, you keep a hold of 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 are not planning to use exchanges to regularly trade, it’s wise to avoid keeping large amounts of crypto long term on centralised exchange platforms, as they are effectively hold your digital assets on your behalf and remain vulnerable to cyberattacks.
#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 are rewards with some additional cryptocurrency.
DeFi platforms:
- They let you loan your crypto or provide liquidity at an attractive interest rate.
- Projects like Aave, Compound, or Uniswap were still top of the leaderboard in 2024. In 2025 carefully selecting safe platforms remains crucial in this rapidly evolving environment.
- You can also participate in pre-sales (ICOs) for promising new cryptocurrencies and benefit from airdrops.
Althought this combination of yield and active participation in the crypto ecosystem can be very appealing, it requires a rock-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 investors both strategize and diversify carefully. It is essential to know how 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 long-term investiment. The latter might benefit from short-term hype but are less likely to produce value in the long run (though trading them can prove fruitful). 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 when making your assessment of the market, concentrate first on the potential risks, rather than on the potential gains.
