Cryptocurrency investment has evolved from a niche interest to a mainstream financial avenue, captivating the attention of investors worldwide. However, the idea of directly purchasing and managing cryptocurrencies might not resonate with everyone. The good news is that there are alternative pathways to tap into the crypto market without holding digital assets directly. In this guide, we’ll explore how to invest in crypto without the need for direct ownership.
Cryptocurrency Stocks: Unlocking the Potential of Blockchain Companies
A conventional yet effective method involves investing in stocks of companies deeply intertwined with the cryptocurrency space. Seek out publicly traded entities engaged in blockchain technology, crypto mining, or those providing essential services to the crypto industry. This strategy lets you indirectly benefit from the crypto boom without handling digital assets.
Examples of such stocks include
MicroStrategy (MSTR): Renowned for holding a substantial amount of Bitcoin on its balance sheet.
Coinbase (COIN): A leading cryptocurrency exchange platform.
NVIDIA (NVDA): Notable for producing graphics processing units (GPUs) widely used in crypto mining.
Cryptocurrency Funds and ETFs: Diversification Without the Complexity
For a diversified portfolio of cryptocurrencies without the hassle of direct management, consider cryptocurrency funds and exchange-traded funds (ETFs). These investment vehicles often comprise a mix of cryptocurrencies, providing exposure to the market without the need for hands-on management.
Examples of such funds include
Grayscale Bitcoin Trust (GBTC): A popular investment trust holding Bitcoin.
Crypto ETFs: Emerging globally, these ETFs track the performance of a basket of cryptocurrencies.
Blockchain Technology Companies: Riding the Wave of Technological Advancement
Investing in companies at the forefront of developing blockchain technology can be a strategic move. Blockchain, the underlying technology of cryptocurrencies, has applications beyond digital currencies, and companies exploring these applications could see significant growth.
IBM (IBM): Actively involved in providing blockchain solutions.
Ripple (XRP): Focuses on providing blockchain-based solutions for cross-border payments.
Crypto-Related Derivatives: Navigating Markets Through Derivative Instruments
For those comfortable with a higher level of risk and complexity, crypto-related derivatives offer exposure to price movements without owning the actual assets. Futures and options linked to cryptocurrency prices are common in the market.
Platforms for derivatives trading include
CME Group: Offers Bitcoin futures contracts.
Deribit: A platform for trading crypto options.
Blockchain ETFs: Focusing on the Technological Backbone
Exchange-traded funds (ETFs) specifically dedicated to blockchain technology provide exposure to companies involved in developing and implementing blockchain solutions.
ARK Fintech Innovation ETF (ARKF): Invests in companies transforming the financial sector, including those involved in blockchain technology.
Crypto Savings Accounts: Earning Passive Income With Crypto Assets
Platforms offering interest-bearing accounts for cryptocurrencies present an opportunity to earn passive income without the need for active trading. While not directly linked to price appreciation, these accounts provide a way to generate income from your crypto assets.
Platforms offering crypto savings include
BlockFi: Allows users to earn interest on deposited cryptocurrencies.
Crypto.com: Offers interest-earning accounts for various cryptocurrencies.