11 actions to invest in crypto without buying crypto directly
Many of us want to invest in cryptocurrency but are not ready to accept the volatile nature of most digital currencies. In that case, you might be surprised to learn about these alternative methods of crypto investing.
Buying cryptocurrency can be a steep learning curve for those new to space, even setting up a crypto wallet is still not intuitive enough for mass adoption. So how do you get into the crypto game without buying currencies directly?
Can you invest in crypto without buying crypto directly?
Fortunately, it is possible to add exposure to cryptocurrencies to your wallet without buying actual coins.
Here are three easier ways to invest in cryptocurrency that don’t involve buying coins:
- Invest in companies that hold cryptocurrencies. These companies use resources to invest in cryptocurrency, which means they have it on their balance sheet.
- Invest in a cryptocurrency ETF. Some ETFs give you exposure to cryptocurrencies without buying digital currencies directly.
- Invest in cryptocurrency infrastructure or blockchain technology. This investment involves any business focusing on blockchain, cryptocurrency mining, or cross-border transactions.
There is no need to buy a whole piece or worry about cryptocurrency fluctuations if you invest in crypto-related stocks.
Here are 11 actions to invest in crypto without buying crypto directly
These stocks and securities will give you just enough exposure to cryptocurrency without taking on all the risk associated with a single player.
1. ProShares Bitcoin Strategy ETF (BITO)
As it is a futures ETF, the company does not hold any bitcoins. Instead, the fund is exposed to bitcoin prices with futures contracts.
This fund is the first, and currently the only, type of bitcoin-linked ETF on the market at the time of publication. Unfortunately, the SEC rejected several other bitcoin or cryptocurrency ETF proposals.
For those unaware, ETFs (Exchange Traded Funds) are a hybrid between stocks and mutual funds. When you buy shares of an ETF, you are buying into the variety of investments held by the fund.
2. MicroStrategy (MSTR)
MicroStrategy is on this list because the company invests in Bitcoin as its main reserve asset. Although the company offers business intelligence and cloud services, it holds around $5 billion worth of bitcoins.
Since the company simply buys bitcoin with its working capital, many experts believe that the stock should rise when the value of the currency rises.
3. Coinbase Global (COIN)
Coinbase is the premier public cryptocurrency exchange and one of the most popular exchanges available.
The company is known for simplifying the buying and selling of dozens of cryptocurrencies so that new investors can enter the market. It also offers educational services including tutorials and market updates so newbie crypto investors can learn along the way.
Although you are not investing directly in crypto when you invest in Coinbase, keep in mind that this stock is strongly tied to the volatile crypto market.
4. Riot Blockchain Inc. (RIOT)
Riot is one of the biggest Bitcoin miners in America. We included them on the list due to the growing demand for cryptocurrency despite its limited supply. Experts believe that miners won’t discover all bitcoins until 2140, which means these mining companies have a lot of work to do.
To produce new bitcoins, miners will use powerful technology to solve cryptographic challenges to confirm transactions on the blockchain. In return for this effort, miners collect newly minted bitcoins as a reward.
Since mining companies are heavily dependent on their mining assets, the value of this stock would likely increase as the value of Bitcoin increases.
5. Robinhood Markets (HOOD)
Robinhood is a fairly popular discount brokerage app that has recently allowed users to trade cryptocurrencies with stocks and options.
Robinhood holds billions of dollars of crypto assets in custody, relying on revenue from crypto trading. It has a substantial competitive advantage over its competitors as they have a commission-free model and access to many cryptocurrencies.
Robinhood does not rely entirely on crypto transactions to generate revenue. Most of its revenue comes from transaction fees on trades, which can give investors more stability than other cryptocurrency exchanges.
Paypal is a household name for digital financial transactions, and it has recently entered the world of crypto. The PayPal app allows users to buy, sell, and store Bitcoin, Bitcoin Cash, Ethereum, and Litecoin currencies. It also provides educational articles that teach users the basics of cryptography.
Paypal made this list because it expands the average person’s access to crypto transactions. With PayPal, people can get started with some of the most popular cryptocurrencies, even using them to pay for purchases at online stores.
7. Block Inc. (SQ)
Block, formerly known as Square, Inc., is a financial services and digital payments company. The company holds bitcoin on its balance sheet and allows cryptocurrency transactions through the Cash app. It is expanding into cryptocurrency and digital wallets, bringing it closer to authorizing crypto transactions between businesses and customers around the world.
Block is an attractive crypto stock because the company is not exclusively dependent on crypto for revenue. On top of that, Block allows users to use cryptocurrency as payments to each other, eliminating banks and other intermediaries.
Since Elon Musk, the founder of Tesla, is a huge supporter of cryptocurrency, we felt this stock was worth adding to the list. Musk
Tesla purchased roughly $1.5 billion worth of Bitcoin in early 2021 and temporarily accepted Bitcoin payments for transactions. Currently, the only cryptocurrency that Tesla accepts for transactions is Dogecoin.
9.Bitfarms Ltd. (BITF)
Bitfarms is a Canada-based company that is involved in the mining of cryptocurrency coins and tokens in North America. The company sees revenue from increasing the value of the bitcoin it mines and its custody.
Since Bitfarms is a mining company, it is important to point out that the price of this stock can be linked to the market value of Bitcoin.
10. Silvergate Capital Corporation (SI)
Silvergate is a cryptocurrency banking platform that has built a real-time payment system, the Silvergate Exchange Network, to instantly send and clear transactions with cryptocurrency exchanges.
Silvergate is a popular stock for those looking for crypto exposure, as it is one of the few stocks with a resilient business model that can withstand extreme swings in the crypto space.
11. Marathon Digital Holdings, Inc. (MARA)
Marathon is a digital asset technology company focused on bitcoin mining, processing and transaction verification. The business is paid in bitcoins, which it can sell to generate revenue.
The company is focused on investing in miners to improve bitcoin mining speed. It currently has over 36,830 miners and plans to have around 199,000 miners by 2023.
Recently, bitcoin price has been very volatile. Since the value of the business is directly tied to the value of bitcoin, this stock is riskier than the others on this list.
What are the benefits of directly buying these stocks instead of cryptocurrency?
Although investors cannot ignore the future potential of blockchain technology, there is volatility that comes with crypto investing.
The main advantage of investing in one of these stocks is that you are not buying one type of cryptocurrency, hoping that its value will rise. These companies provide diversification, an essential safety net in such a volatile market.
Over the years, general expert advice has been that you should only allocate around 5% or less of your portfolio to these speculative assets. You can allocate a higher portion of your portfolio when investing in stocks that offer exposure to cryptocurrency without being full crypto assets.
You are also investing in blockchain technology and digital payment systems which will likely become more popular in the future as more and more people go online. If you believe in this technology, you will want to invest your money in something you trust.
The last word.
If you want to start investing in cryptocurrency without fully committing to a single coin, consider these 11 stocks instead. It is important to remember that with every investment comes some volatility and there is no guarantee that the value of such stocks will increase.
Do you want to cover more of your risks? Check Q.ai’s Bitcoin Escape Kit. The goal of the kit is to benefit from future Bitcoin appreciation while reducing risk from potential tech sales.
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