It’s impossible to deny the significant impact cryptocurrency has had on the finance and investing market. Other than helping facilitate transparent and convenient transactions, cryptocurrencies can also be traded to bring in huge returns. But despite the public’s interest in the rise of crypto, there are still a lot of people who remain apprehensive about investing in it.
For one, most of the surrounding infrastructure used in crypto trading is still largely underdeveloped, which makes it relatively inaccessible for those who aren’t technically inclined. In addition, most people are scared of the intense volatility that often plagues the crypto market.
Thankfully, there are a few ways that you can invest in crypto without buying or trading it. In this post, let’s discuss the alternative ways you can expose your portfolio to crypto.
1. Invest in companies that have Bitcoin in their balance sheets
Buying stocks and shares from publicly traded companies that have Bitcoin in their balance sheets is one way to add crypto to your investment portfolio. These companies own cryptocurrencies, such as Bitcoin, and hold them at a cost price as intangible assets. One example of this is business intelligence firm MicroStrategy, which has allocated a bulk of its cash holdings into Bitcoin.
Tesla is another high-profile company that has Bitcoin in its balance sheets. By buying shares from these kinds of companies, you get to cash in on the crypto craze without having to directly buy it. In addition, you also get to benefit from the business performance of the companies that hold and gain from cryptocurrencies.
2. Invest in crypto exchanges
Most people think of trading when you talk about investing in crypto. Trading is usually done on crypto exchanges. These exchanges allow you to safely buy and sell crypto digital assets. As well as convert crypto coins back into fiat currency when you decide to withdraw your earnings. If you’re not confident with trading crypto, you can invest in publicly traded crypto exchanges.
What’s great about putting your money in crypto exchange stocks, instead of trading crypto, is that these benefit from the increased trading volume. This means that your money isn’t tied to the performance of just one crypto, and you’ll also benefit from the increasing popularity of crypto trading.
3. Invest in blockchain ETFs
One way to add crypto to your portfolio without trading or buying it is by investing in blockchain ETFs. Simply put, ETFs are speculative funds that hold various baskets of securities and shares sold on an exchange. Just like stocks, ETFs are traded daily with prices based on the current supply and demand.
Blockchain ETFs follow the performance of companies that have business operations that run using blockchain technology or have something to gain from the blockchain. An example of this is the BLOK ETF issued by Amplify Investments, which has holdings in well-known blockchain companies such as MicroStrategy Inc., Square Inc, and Coinbase Global Inc.
4. Invest in Grayscale trusts
You can also invest in crypto by putting your money in Grayscale trusts. The asset management company Grayscale pools the funds of various shareholders and invests them in two cryptocurrencies: Bitcoin and Ethereum. This is a relatively safer way of investing in crypto as Greyscale purchases, holds, and protects the cryptocurrencies for you.
What’s more, you can invest in Greyscale trusts using normal brokerages. Since these are publicly traded and are required to report to the SEC. These kinds of investments are best for those who don't fully trust crypto exchanges but want to gain some level of exposure to crypto.
If you are interested in trading on the crypto market, we hope the above tips prove useful.
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