How to Invest in Crypto (Without Buying Cryptocurrency)
Cryptocurrency can be a fantastic investment for people willing to accept their relative levels of inherent risk and volatility. And with so many advancements made in crypto technology and the acceptance of crypto by increasing numbers of banks and businesses, you don’t need to be nearly as tech-savvy as you once did to dip your toes into the crypto game.
That said, not everyone is comfortable with the risks of buying crypto directly- even the less volatile crypto like Bitcoin or Ethereum. Thankfully, there are multiple ways people can get exposure to crypto investing with minimal levels of potential risk, all without having to purchase a single coin! Our financial professionals at unBanked are here to explain your options below. Also, if you’d like to access even more information on all things crypto, please consider exploring our other expertly written resources!
How to Invest in Cryptocurrency Without Buying Crypto Coins
There are several ways that interested individuals can enter the realm of crypto investing without dealing with the aggravatingly steep learning curve that comes with buying and selling coins directly on an exchange. Below, we’ll explain some of the simplest and most popular methods you can start utilizing to enter the crypto game as soon as possible while also shielding yourself from unnecessary market volatility and risk levels.
1. Invest in Cryptocurrency Infrastructure
In some ways, cryptocurrency is a bit like gold when it comes to investment. You can choose to invest your money directly in the commodity itself or invest in the infrastructure around it, including the miners, the tools needed to mine it, and more. You can also choose to invest in some of the various public companies that specifically operate within the blockchain space or who have a stake in the cryptocurrency industry itself.
For example, Coinbase is a specialized crypto exchange platform where investors can buy and sell crypto, and it’s also publicly traded. Riot Blockchain Inc. is another publicly traded company that focuses specifically on crypto mining. They help build the cryptocurrency infrastructure and provide other crypto-adjacent investment opportunities for prospective investors. Working with these companies is an excellent option if you want to invest in crypto without actually shelling out the money for individual coins.
2. Invest in a Crypto or Blockchain ETF
Currently, the United States has only officially approved a single cryptocurrency exchange-traded fund (ETF). The Bitcoin ETF known as BITO is tied directly to Bitcoin futures and was launched by ProShares in October of 2021. It doesn’t directly invest in Bitcoin but instead bases futures contracts tied to the performance of the cryptocurrency. Because it functions as an ETF, investors can invest directly into the fund from their brokerage accounts rather than having to open crypto wallets, and crypto exchange accounts, and buy crypto coins directly to trade and sell.
Like investing in companies related to cryptocurrency infrastructure, investing in a crypto ETF allows people to have easier access to the world of crypto without learning how to buy, sell, and manage different types of coins. This makes the crypto investment process exponentially easier and removes significant volatility and risk from the equation.
Alongside a crypto ETF, investors have the option to invest in various blockchain ETFs as well! Blockchain ETFs are much more plentiful than crypto ETFs. They typically provide access to a wide range of companies using or developing blockchain technology within the crypto industry. This type of investment is especially beneficial for those skeptical about cryptocurrency but believe in the transformative power of blockchain technology.
This final strategy can essentially be thought of as “crypto investing once removed.” A range of publicly traded companies possess significant cryptocurrency holdings, and investors can put their money towards these companies rather than buying crypto coins directly on an exchange. Essentially, these companies work by betting on the success of the crypto they possess. And you can do the same while using the company as a buffer to help edge against risk.
If you select this option of indirect crypto investing, it’s highly recommended that you explore the company’s balance sheet to determine how much they have in terms of digital assets. Doing so can provide a lot of revealing information and give investors a better sense of where their money is liable to make decent returns. If a company places billions of dollars in crypto assets that have proven successful in the past, you’ll know that’s likely a relatively safe investment opportunity.
Investing in crypto can be a fantastic way to expand and diversify your investment portfolio. However, you usually have to have at least a little bit of risk and volatility tolerance if that’s how you’d like to approach the crypto game. Utilizing the above four methods, however, you can still leverage crypto in your portfolio without worrying about excessive levels of potential risk to your investments. Give one or more of them a try today to see which pines work best for you!
However, if you’d like more information about the world of crypto or access to a safe and secure way to help you buy, sell, and manage any coins you buy directly, please consider exploring our range of top-quality services at unBanked today!