Crypto market is characterized by extreme volatility, leading to lack of stability in crypto asset prices. Coupled with this, the recent crypto in 2022 has made a lot of people apprehensive about putting money directly on crypto. However, people are also getting increasingly interested in the cutting-edge technology of blockchain and cryptocurrency. Many of them are looking for avenues to make investment in the revolutionary technology of crypto yet without putting money directly into crypto assets. Is that possible?
Well, if you too are one of them you would be glad to know that there are not one but multiple avenues to make indirect investment in the crypto zone. The post below shares a brief on the top ways how you would be able to make investment in the crypto scene yet not by directly purchasing crypto.
Shares of crypto-related businesses
One of the easiest ways to make indirect investment in crypto is through shares of companies working in the crypto sphere. The most common example is crypto exchanges. You have a long list of popular crypto exchanges today and you can buy their individual stocks. Good thing about these kinds of shares is that the market value of these companies is not directly dependent on the status of a particular asset- but the crypto industry in general. So, investing in the share of crypto-related businesses is always safer than investing on one specific crypto asset.
Added to crypto exchanges, you also have a line of crypto mining firms. You can buy shares of these companies as well.
Companies invested in crypto
One of the major reasons for crypto’s booming popularity today is increasing interest and investment from institutional investors. A long line of some of the most esteemed companies around the world has already invested in the crypto zone. Some of them are either accepting crypto-based payments while others have made large investments in crypto assets. Then, some of the corporations are even putting their entire or a large share of working capital right into a crypto asset, such as Bitcoin. The value of the stocks of these companies is also related to the market value of their chosen crypto assets. So, if you invest in the stocks of these companies, you will have a certain degree of exposure into the crypto market. And the best part is, you won’t even have to put money on crypto assets directly.
Another way to make indirect investment in crypto is through private trusts holding cryptos. The most popular ones are surely Bitcoin Trusts. Now, these funds enable investors to purchase the shares at just the market value. However, you can also buy these shares via brokerage accounts.
But, then, just remember that these trusts carry management fees. The fees could range anywhere between 0.49% to 2%- making the investment more expensive in comparison to direct purchase of crypto from a crypto exchange. So, you should check out with multiple platforms and compare the fees to come up with a competitive platform.
This is perhaps the most popular option when you are looking for ways to make indirect investment in crypto zones. The crypto ETFs work to track the price of a cryptocurrency asset, such as the Bitcoin ETF. However, some crypto ETFs could be designed for tracking the price of several crypto assets.
Now, these ETFs might own crypto options, futures, as well as other types of cryoto-based securities. This is one major differentiation with conventional ETFs as the traditional ones exercise direct ownership over underlying assets. It’s to note here that sometimes, ETF movements might match the movements of underlying crypto as the former doesn’t own it directly.
The major advantage of investing in crypto ETFs is that these funds do not have to bear the direct impact if the underlying crypto suffers a crash or huge decline. So, when you invest in a Bitcoin ETF and BTC meets with a bearish market, the scale of impact would be much less on your investment. Then, crypto ETFs cost much less than buying crypto directly from a cryptocurrency exchange. With Bitcoin ETF or any other ETF, you are saved from shelling out money for custody fees as well as transaction and network fees. In other words, it would be more of an economical affair to put money in crypto ETFs. If you are worrying about fund security, well, it’s your ETF provider who will take care of the security of the fund.
Did you know that you can now place a certain part of your savings in BTC? A leading 401(k) provider has already declared that it will now permit individuals to place a specific part of savings in BTC. This is one of the easiest ways to foray into the crypto investment zone without putting money directly into crypto assets.
So, if you are interested, check with your company to see whether or not they have adopted these new services. In case, your office permits the program, you can place around 20 percent of paycheck into BTC. If you are looking to create an additional account for retirement funds, you can opt for this option.
Now, this is not going to be an indirect investment in crypto assets per se. Thus, if you have placed money into a crypto asset, your investment would be directly affected by the up and dip of your chosen crypto asset. It’s because you would be allotting money directly to crypto assets. But, you are not doing it in the traditional way- say, you are not buying the crypto asset from a crypto exchange here. Yes, you are putting money in it but that’s your already existing money,
So, you have quite a few options now to foray into the crypto investment zone without directly putting your cash into crypto. There is another option as well and quite an interesting one. How about crypto gifts? If there is a crypto enthusiast in the family, and if s/he asks you for what to give this holiday season, you can gently remind him/her that you too are interested in crypto these days.