If You Want to Invest in Crypto Without Investing in Crypto, Consider These Lower-Risk Options
Investors interested in cryptocurrency are probably aware of the huge swings in price for Bitcoin and its peers in recent weeks. Bitcoin’s price tumbled to around $31,000 over the weekend, The New York Times reported, which represented a drop of more than half from last month’s high. But on Monday the price rebounded to above $37,000.
Considering its volatility, cryptocurrency is not for the faint of heart. It not only tends to make wild swings in price, but it’s also expensive, it can’t be bought through traditional brokerage accounts and doesn’t have backing from financial institutions, CNBC reported.
So what’s the best way for investors to get a piece of cryptocurrency without actually buying the coins? One alternative is to invest in companies that either have crypto-related services or hold the coins themselves.
If you want exposure to cryptocurrency without the direct risk, here are some options:
- Invest in companies with crypto technology: These include Square and PayPal, which let users to trade cryptocurrency on their platforms. Even Big Tech companies such as Amazon, Google, Microsoft, IBM and SAP use blockchain in different parts of their businesses.
- Look for cryptocurrency funds: Some funds hold Bitcoin and other cryptocurrencies. For example, Grayscale and Osprey have created Bitcoin trusts, Doug Boneparth, CFP and president of Bone Fide Wealth in New York, told CNBC. And funds with exposure to cryptocurrencies and blockchain technology include the Ark Next Generation Internet exchange-traded fund. Just keep in mind that funds might charge a fee.
- Buy Tesla stock. In February, the electric vehicle maker purchased $1.5 billion worth of Bitcoin and said it would soon accept it as payment, although Tesla recently suspended the latter option after CEO Elon Musk voiced environmental concerns tied to crypto.
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