Can you invest in crypto without actually buying coins? The short answer is ‘yes’. And here are some ways of how to do it.
Let’s talk straight: it’s a mess with the term ‘crypto investment’.
Some say buying crypto is not an investment, some say it is, and somebody even compares crypto purchase to gambling.
Surely you can consider buying crypto as an investment because it has all the main attributes of one.
For instance, the dedication of an asset to attain an increase in value over a period of time.
In traditional stock market investment, it is expected that higher risks can bring higher returns.
But the other question is can you invest in crypto without actually buying coins? The short answer is ‘yes’. And here are some ways of how to do it.
Buying stocks of companies with crypto interests
If you are familiar with the traditional stock market and you don’t believe in the ‘get rich quick’ crypto concept – this is one of the best variants for you.
Now there is a huge number of companies that are involved in the digital assets industry directly or partially.
Some of them are business intelligence giant MicroStrategy, payment platform PayPal, broker-dealer Galaxy Digital, and even electric cars manufacturer Tesla.
Such companies prefer to purchase digital assets instead of holding cash. So you will simply win with your stocks of these companies when the crypto market will go up.
And your funds will be additionally secured by the companies’ main operations.
Most of these companies hold some shares of their assets in BTC. That means the volatility probably shouldn’t be as high as with other tokens.
You can buy and sell the companies’ stocks with regular stock exchanges. But the trick is there you will face some minimum thresholds, so you can’t buy these stocks with like 10 bucks.
Buying crypto companies’ stocks
Kind of similar experience is an investment in companies with direct crypto operations.
Those are crypto exchanges, mining companies, blockchain developers, and others.
For example, you can buy stocks of RIOT Blockchain (Bitcoin mining company), Bitfarms (blockchain computing centers), Square (decentralized finance platform), or one of the most popular world crypto exchanges Coinbase.
The pros are crypto companies’ stocks are less volatile than any digital currencies and are actually regulated by government agencies. That’s about your funds’ safety.
But the cons are you will not be able to have some potential for gains as with putting money directly in some tokens.
Buying crypto companies’ stocks is a great chance for those who want only to enter the digital assets industry without taking on too much risk. But remember that crypto companies’ stock market is also highly volatile and risky.
Buying crypto ETFs
ETF stands for exchange-traded funds (ETFs). Those are platforms that buy and track the performance of digital currencies, pretty much like traditional ETFs.
But traditional ETFs hold assets such as stocks, bonds, currencies, futures contracts, etc.
Crypto ETFs buy one or more cryptocurrencies and then sell its stocks to the investors. To put it another way, this kind of ETF gives the opportunity to diversify your investment in the crypto industry from a traditional stock brokerage account.
Blockchain ETFs are also including companies either using or developing blockchain technology.
There are now popular crypto ETFs like ProShares Bitcoin Strategy ETF (BITO), Grayscale Bitcoin Trust (GBTC), Grayscale Ethereum Trust (ETHE), Bitwise 10 Crypto Index Fund (BITW), and others.
Investing in blockchain technology
“Blockchain technology has the potential to boost global gross domestic product (GDP) by $1.76 trillion over the next decade,” PwC’s economists stated in the Time for Trust report.
So instead of buying crypto or crypto stocks you can put your money in the blockchain. That would be a nice way to invest in crypto without buying any of it.
You can do such investing through venture capital companies that are focused on early-stage financial support for young blockchain companies and start-ups.
It’s possible to become part of some of the most innovative projects in the industry while also diversifying your risks.
Or, as another take, you can also buy shares of companies that are invested in blockchain tech.
This could include companies that are mining for cryptocurrency or developing blockchain-based applications.
Among the most popular of them are graphics processing units manufacturer Nvidia, the world’s largest futures and options exchange CME Group, Financial technology company Block, the market leader in e-signature technology DocuSign, and lots of others.
Investing in Blue Chips with blockchain involvement
Blue Chips is stock in a stock corporation with a national reputation for quality, reliability, and the ability to operate profitably in good and bad times, Wikipedia says.
Actually buying Blue Chips means buying stocks of very reliable and most of the time profitable companies.
Now there are a lot of the most famous and experienced companies involved in blockchain development.
For example, Alibaba Cloud Blockchain-as-a-Service (BaaS) that based on leading blockchain technologies. Or Amazon Web Services (AWS) which provides cloud computing services to different major crypto exchanges.
Now you can consider being ‘blockchain companies’ such world giants as IBM or Mastercard.
Recently IBM Blockchain provided transformative solutions for clients such as Kroger (the US retail company) and True Tickets (a ticket authentication company).
And Mastercard declared several crucial blockchain partnerships, like with R3 company to develop a new cross-border payment system. The payment platform also joined leading Asia-Pacific crypto companies to launch crypto-funded Mastercard payment cards.
So you can easily try your best with it. But don’t forget about the basic risk management and money management rules. In other cases all your investment could suck.
Sources: Medium, NextAdvisor, The Motley Fool
