Investors interested in cryptocurrency are probably aware of the huge dip bitcoin and other cryptos have taken over the last couple months. It all started when the algorithmic stablecoin Terra collapsed, sparking a steep sell-off that affected the entire crypto market.
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. Last year, the electric vehicle maker purchased $1.5 billion worth of Bitcoin and said it would soon accept it as payment, although Tesla later suspended the latter option after CEO Elon Musk voiced environmental concerns tied to crypto.
More From GOBankingRates