Three Different Ways to Invest in Cryptocurrency

If asked to consider the future of finance, digital assets will come to mind. Cryptocurrency is redefining how the financial sector works and is growing in popularity at an unprecedented rate. As it stands, around 28% of American adults own cryptocurrency of some kind.

Because of its increasing popularity and the backing it has received from the government, crypto is a strong area for any investor. As such, we have compiled this list of three effective ways to do just that.

1: Investing in Crypto Businesses

One of the most effective methods of investing in cryptocurrency is to invest in a business that has already fully integrated its use. These companies already have a footing in the crypto world and have designed their businesses with crypto at their hearts.

These companies can be anything from crypto exchange platforms, which allow users to buy, sell, and trade digital assets, and crypto wallets such as Kraken or Coinbase, which allow users to store their cryptocurrency. Alternatively, you could invest in businesses that don’t solely exist to aid in crypto trading and storage but have effectively integrated the currency into different sectors.

One of the areas where crypto is changing the game is the online gambling sector. Crypto gambling enables online casino players to wager and withdraw funds securely and gives them a greater sense of choice and autonomy when it comes to their play. With this in mind it is no surprise the industry is doing so well and investing in an area like this is almost certain to bring rewards.

2: Invest in Crypto Directly

If you’re more interested in owning digital assets yourself, then you’ll need to invest directly in a form of cryptocurrency. Digital assets can be purchased on traditional investment platforms or crypto exchange platforms.

Investing in crypto directly will not grant you a share of that company’s profit, but rather turn you into the owner of a digital asset. It is then up to you what you do with this asset, whether you hang on to it in the hope that the volatility of crypto will increase its value over time, or whether you look to sell straight away. You must do your research before investing in crypto and take into account both the cybersecurity risks that are out there, as well as the potential for digital assets that can rapidly lose value.

3: Purchasing crypto ETPs

If you are looking to benefit from cryptocurrency’s value, but don’t wish to directly invest in the coins themselves, then you should consider buying spot crypto exchange-traded products, or ETPs. Doing so gives additional levels of security to investors who might not be comfortable with investing in, storing, and moving their own digital assets.

Investors purchase ETPs through more traditional routes like IRAs, brokerage accounts, and trusts. In essence, investing in ETPs means investing in a product that follows the price of cryptocurrency, but doesn’t actually result in the investor having ownership of the coins themselves. Despite making life easier and potentially more secure in some regards, owning ETPs does come with its unique limitations. For example, ETPs can only be traded during traditional market hours, unlike owned cryptocurrencies that can be traded 24/7.

Things to Consider

It is important, when deciding to invest in cryptocurrency or crypto stocks, that investors do their research beforehand. By design, cryptocurrency is incredibly volatile and, as a result, the market can often be unpredictable. You, as an investor, must get a gauge of the positives and negatives of each method of investment before deciding whether it is the right path for you. As always, you should only ever invest what you can afford to lose; in this way, no matter what happens, you won’t be facing catastrophe afterward.