Alternative Methods to Investing in Crypto
Crypto Exchange - Traded Funds (ETFs)
ETFs allow investors to invest in a pool of assets by purchasing a single security. This can be related to a sector, index or category of assets. This provides the holder with diversification and lowers their risk, compared to investing in individual assets. There are no public investments yet but as of June 2021, the SEC is reviewing potential cryptocurrency ETF applications.
Crypto - Connected Companies
Rather than directly investing in cryptocurrencies, you can invest in companies that use cryptocurrencies or the technology that powers them (blockchain). Companies include Nvidia (NVDA), PayPal (PYPL) and Square (SQ). Nvidia produces the graphics cards necessary to mine cryptocurrency, Paypal allows users to transact cryptocurrencies with their account and Square literally owns millions of dollars worth of Bitcoin.
As mentioned, make sure you understand your current and future financial goals before investing in a risky asset like cryptocurrencies. Just like dogecoin’s market cap vanished with a few tweets, it only takes a few words to make the price of a crypto react. By investing through alternatives, this reduces your risk but you’re still exposed.