How to invest in cryptocurrencies without buying any of them?

How to invest in cryptocurrencies without buying any of them?

Cryptocurrencies are crypto by nature, it's in the name! But how do you invest in cryptocurrencies safely and securely?

If you follow Warren Buffett's advice to never invest in businesses you don't understand, it can be hard to justify investing in a currency made of math instead of gold.

But it is also difficult to ignore the stunning performance of some encrypted currencies: the price jumped currency Bitcoin one of less than five thousand dollars in March 2020 to more than 60 thousand dollars in April / April last.

The excitement surrounding cryptocurrency may make some investors feel like an only child at a pool party, wanting to join their friends, but too anxious to jump in.

For investors with a cautious curiosity, here are ways how to invest in cryptocurrencies without buying them, and if you decide to buy, how to reduce your risk.

Invest in companies with crypto assets

Think of this strategy as investing in the cryptocurrency once it is removed.

Some publicly traded companies own holdings of cryptocurrency.

And because they're betting on his success, you can too, as those companies act as a storehouse.

says Douglas Bonbarth , a certified financial planner and president of Bone Fide in New York City.

“It just depends on how much cryptocurrency is off their balance sheet.”

A check on the company's balance sheet could reveal a few things, as as of June 30 , 2021 , Tesla owned $ 1.31 billion in digital assets.

And while the tech giant has received a lot of media attention for its investments, $ 1.31 billion is currently equivalent to about 2.4 percent of Tesla's total assets .

But if these assets inflate in value, as cryptocurrency is sometimes used to, so could the value of Tesla's stock .

Invest in cryptocurrency infrastructure

Another way to answer the question of how to invest in cryptocurrency is to invest in companies that have a stake in the cryptocurrency industry.

Quinn Bayes Coinbase is a platform where investors can buy and sell currencies encrypted, and publicly traded.

Bonbarth says :

“Just as with gold, you can either invest in the commodity itself or in the infrastructure around it, the minerals there, the materials needed for mining, and also with energy and fuels.

There are public companies that work specifically in the Blockchain space , but there are not many of them.”

Riot Blockchain Inc, is one of those few publicly traded companies that focus on cryptocurrency mining.

Riot Blockchain technology , among other things, helps build cryptocurrency infrastructure, and provides another investment opportunity next to cryptocurrency.

Get ready for ETF

While there is currently no money traded on the cryptocurrency exchange, as this would require approval by the Securities and Exchange Commission, there is a demand for it.

A cryptocurrency ETF will work just like any other ETF , but instead of tracking a market exchange like the S &P 500 , it will track a cryptocurrency.

For example, a Bitcoin ETF will track the price of Bitcoin .

“There have been many different attempts at the ETF and many have been rejected.”

Says Tristan Iver head of strategy in FTX.US, encrypted currencies subject to exchange for the organization of the relevant agencies in the United States:

"There are funds ETFs currency Bitcoin allowed in other countries, and I think it 's just something that will happen in a timely fashion."

I don’t have an estimate of when that will happen, but I think it is something that will happen, and I think it is something that will allow people who are not comfortable investing directly in digital assets, exposure to Bitcoin and other cryptocurrencies .”

There have been many applications for crypto ETFs, and the Securities and Exchange Commission is expected to decide whether to approve investment manager VanEck's offer to buy a Bitcoin ETF , which could be the first such fund in the US, on November 14 , 2021. .

How to invest in cryptocurrency directly while maintaining caution

If you are willing to invest in cryptocurrencies directly, there are a few ways you can mitigate the risks.

One way to do this is to reduce the amount of money you invest.

Some credit cards offer rewards in cryptocurrency, in a similar way to getting cash back or miles.

If you decide to add cryptocurrency to your wallet via rewards, you don't even have to use your dollars to do so.

Another way to reduce risk is to invest in stable coins, which are similar to traditional cryptocurrencies but are backed by real assets, making them less vulnerable to significant drops in value.