Putting 'a little money on the line' is the best way to learn about crypto, according to founder and CEO Mike Novogratz.

If you're considering investing in cryptocurrency, some bulls suggest starting small.

During the Financial Advisor Summit on Wednesday, Mike Novogratz, founder and CEO of Galaxy Digital, advised starting with 1% to 5% of your overall portfolio in digital assets and blockchain.

To become interested in crypto, you should start by learning about it, according to Novogratz.

"By putting a little money on the line, you can learn about things and pay attention to the article and interview."

As a crypto expert, it is logical for Novogratz to motivate as many individuals as possible to educate themselves and invest in cryptocurrency.

That said, other financial experts recommend similar parameters.

Brian Vendig, president of MJP Wealth Advisors in Westport, Connecticut, previously advised CNBC Make It that he believes 1% is a more conservative allocation, and no more than 5% of a growth-focused investor's portfolio should be invested in this manner.

What to know before investing in crypto

Bitcoin, the largest cryptocurrency by market cap, experienced a steady increase in price throughout 2023, reaching even higher levels this year. Since March, it has maintained a range of $60,000 to $70,000, representing a significant increase from its May 24, 2023 closing price of around $27,000, according to Coin Metrics data.

While bitcoin is currently performing well, financial advisors generally advise against making it a significant part of your portfolio, as investing in crypto may not make sense for everyone.

Unlike stocks and bonds, cryptocurrencies do not derive their value from underlying assets. Instead, their prices are highly volatile and determined by investor demand. As a result, it's important to only invest as much in crypto as you're willing to lose.

What are your financial goals, and how can investing in crypto help you achieve them?

"To determine the appropriate sizing for an investment, an investor must answer the question correctly, according to Vendig. The question is: "Do you want to invest in this asset class, or is it not rational for you as an investor?""

According to Ivory Johnson, a certified financial planner and founder of Delancey Wealth Management in Washington, D.C., it is sufficient to allocate approximately 2% to 3% of your portfolio to crypto.

"The more unstable an asset class is, the less of it you require," he stated.

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