How to Invest in Crypto Without Actually Buying Any Crypto

cryptocurrency

One of the simplest ways to invest in cryptocurrencies without purchasing the coin itself is to acquire shares in a firm that has an interest in the future of Cryptocurrency or blockchain technology. However, investing in individual stocks has the same level of risk as investing in cryptocurrencies. The learning curve for investing in cryptocurrencies is rather high. It was “aggravating” to Suze Orman when she tried to invest in a bitcoin exchange for the first time. Fund for Ethereum investing in the shares of a firm that has a financial interest in the future of Cryptocurrency or blockchain technology is the simplest method to get exposure to crypto without purchasing crypto itself. Investing in individual equities, on the other hand, carries dangers that are quite comparable to those associated with cryptocurrencies. The long-term gain in the value of diversified index funds and ETFs outweighs the risk of investing in individual equities, according to financial experts.

A CFP with ReFocus Financial Planning believes that “believe it or not, most people with a retirement plan or an investment portfolio allocated in an index fund already have some crypto exposure.” According to Johnson, many of the best index funds, such as the S&P 500 or total market. Funds for Ethereum include publicly traded companies that have some involvement in the industry by either mining crypto, being involved in the development of blockchain technology, or carrying significant amounts of crypto on their balance sheets. 

1. Investing in Companies with Crypto Interests

Suze Orman, a personal finance guru, first did it this way. As Nextadvisor recently reported, the CEO of a cloud computing business that has billions in Bitcoin was placing all of his company’s operating money into Bitcoin. Micro strategy’s shares would rise in value if Bitcoin’s price rose, she reasoned. Index funds, on the other hand, are highly recommended by Orman, who believes that choosing individual equities is a poor investing approach.

By identifying firms with crypto interests, and ensuring their shares are included in any index or mutual funds that you invest in, you can ensure a well-balanced portfolio. This not only allows you to put your money into firms that you believe have promise, but it also allows you to maintain a more diverse portfolio of assets.

To see all Vanguard funds that invest in a given firm, utilize the site’s holding search, for example. A ticker symbol (like TSLA for Tesla) is all that is needed to get a list of Vanguard products that own shares of the firm in question. Index and mutual fund search options are comparable on other sites.

You should also be aware that certain ETFs and mutual funds have greater fees than the overall market indexes, so keep that in mind when you’re looking to invest. In Schneider’s estimation, a fee ratio of less than 0.2 percent is very low, while anything beyond 1% is considered excessive. High fees might stifle your progress even more in an already risky venture.

In the following list of publicly listed firms, Bitcoin and blockchain technologies are being incorporated. Obviously, they aren’t the only businesses engaged, and the list is growing by the day. (Circle, a Cryptocurrency-focused digital payment network, has recently declared its intention to go public.) Some of the companies mentioned here include MicroStrategy, Marathon Digital Holdings, RIOT Blockchain, Bitfarms, Galaxy Digital, and Tesla.

Equivalent to a cross between mutual funds and equities, exchange-traded funds (ETFs) function in a similar manner. Investing in an ETF is similar to owning an index fund that holds a variety of different investments. When you invest in an ETF, you own a piece of the company’s stock portfolio. Even though many ETFs, such as whole market ETFs, have relatively low-cost ratios, Schneider would consider specialized ETFs to be more expensive. Keep in mind that the more priced ETFs will have less of an influence on your total portfolio if they represent a small percentage of your holdings.

One approach to indirectly invest in cryptocurrencies is to put money into an ETF that focuses on blockchain, the underlying technology of the coin. For a blockchain ETF, firms that are either developing or employing blockchain technology will be included in the portfolio. A lot of individuals who are dubious about cryptocurrencies but believe in the “transformative” blockchain technology underpinning them consider blockchain ETFs as a far better investment than bitcoin itself.

According to Chris Chen, CFP, of Insight Financial Strategists in Newton, Massachusetts, for a recent NextAdvisor feature on blockchain technology, it’s like the California gold rush of the 1800s: Many individuals flocked into the area to search for gold, but most of them failed to make a profit. “Those who sold shovels earned the most money.” “Shovel sellers” are the firms that help the growth of blockchain.

ETFs are manufactured by a variety of businesses, but you may be able to purchase them via your regular stockbroker. Symbols for mutual funds may be found in the same way that individual stocks can be found in your brokerage. Several blockchain ETFs are presently accessible to investors, including BLOK, which is listed on leading brokerages including Fidelity, Vanguard, and Charles Schwab: (Amplify Transformational Data Sharing ETF), BLCN is short for (Siren Nasdaq NexGen Economy ETF), LEGR is the name of the game (First Trust Indxx Innovative Transaction & Process ETF)

2. Crypto ETFs

Until recently, crypto or Bitcoin ETFs were out of the reach of investors who were put off by the exchanges or purchasing and keeping real coins. BITCO Bitcoin ETF, the first Bitcoin-linked financial product, went live in October following a lot of hype. Bitcoin ETFs have been explored by several organizations, including crypto exchange Gemini and long-standing financial institution Fidelity. However, the Securities and Exchange Commission has either rejected or is still considering all other U.S. plans. Even if Bitcoin-futures contracts are held in BITO’s portfolio, the currency isn’t being held in BITO’s portfolio. However, many cryptocurrency aficionados want to see an ETF that owns cryptocurrencies directly.

Other than BITO, the only other analogous alternative for investors in the United States today is a private cryptocurrency trust, such as Grayscale Bitcoin Trust or Osprey Bitcoin Trust. This kind of fund allows authorized investors to purchase shares directly at market value, but anybody may acquire secondary market shares via a brokerage account with a conventional company like Fidelity, which is a traditional business. Bear in mind that there are management costs for the trusts to keep in mind, which may make this way of Bitcoin investing more expensive than a commission-free blockchain ETF or purchasing crypto straight from an exchange.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.