Many of us want to invest in cryptocurrency but aren’t ready to accept the volatile nature of most digital currencies. In that case, you may be surprised to learn about these alternative crypto investment methods.
Purchasing cryptocurrency may be a steep learning curve for those new to the space, even setting up a crypto wallet still isn’t intuitive enough for mass adoption. So how does one get into the crypto game without buying currencies directly?
You can you invest in crypto without buying crypto directly?
Thankfully, it’s possible to add some cryptocurrency exposure to your portfolio without purchasing any actual coins.
Here are three simpler ways to invest in cryptocurrency that don’t involve buying coins:
- Invest in companies that are holding cryptocurrency. These companies use resources to invest in cryptocurrency, meaning they have it on their balance sheets.
- Invest in a cryptocurrency ETF. Some ETFs give you cryptocurrency exposure without directly purchasing digital currencies.
- Invest in cryptocurrency infrastructure or blockchain technology. This investment involves any company focusing on blockchain, cryptocurrency mining, or cross-border transactions.
There’s no need to purchase a whole coin or worry about cryptocurrency swings if you invest in crypto-related stocks.
Here are 11 stocks to invest in crypto without buying crypto directly
These stocks and securities will give you just enough exposure to cryptocurrency without taking on all of the risk associated with any one player.
1. ProShares Bitcoin Strategy ETF (BITO)
Since this is a futures ETF, the company doesn’t hold any bitcoin. Instead, the fund gains exposure to bitcoin prices with futures contracts.
This fund is the first, and currently the only, kind of bitcoin-linked ETF on the market at the time of publishing. Unfortunately, the SEC has rejected multiple other proposals for bitcoin or cryptocurrency ETFs.
For those unaware, ETFs (exchange-traded funds) are a hybrid between stocks and mutual funds. When you purchase shares of an ETF, you’re buying into the variety of investments owned by the fund.
2. MicroStrategy (MSTR)
MicroStrategy is on this list because the company invests in Bitcoin as its primary reserve asset. While the company offers business intelligence and cloud services, it holds about $5 billion worth of bitcoin.
Since the company simply purchases bitcoin with its working capital, many experts feel that the stock should go up when the currency increases in value.
3. Coinbase Global (COIN)
Coinbase is the first public cryptocurrency exchange and one of the most popular exchanges available.
The company is known for simplifying the buying and selling of dozens of cryptocurrencies so new investors can enter the market. It also offers educational services, including tutorials and market updates so rookie crypto investors can learn along the way.
While you’re not directly investing in crypto when you invest in Coinbase, keep in mind this stock is heavily tied to the volatile crypto market.
4. Riot Blockchain Inc. (RIOT)
Riot is one of the largest Bitcoin miners in America. We included them on the list because of the increasing demand for cryptocurrency despite its finite supply. Experts estimate that miners won’t uncover every bitcoin until 2140, meaning these mining companies have a lot of work to do.
To produce new bitcoin, miners will use powerful technology to solve cryptographic challenges to confirm transactions on the blockchain. In return for this effort, the miners collect newly created bitcoin as a reward.
Since mining companies are highly dependent on their mined assets, the value of this stock would likely go up as Bitcoin increases in value.
5. Robinhood Markets (HOOD)
Robinhood is a fairly popular discount brokerage app that’s recently allowed users to trade cryptocurrency along with stocks and options.
Robinhood holds billions of dollars in crypto assets under custody, relying on revenue from crypto trading. It has a substantial competitive advantage over its competitors because they have a commission-free model and access to many cryptocurrencies.
Robinhood doesn’t entirely rely on crypto transactions for revenue. Most of its revenue comes from transaction fees on trades, which may give investors more stability than other cryptocurrency exchanges.
6. Paypal (PYPL)
Paypal is a household name for digital financial transactions, and it’s recently stepped into the crypto world. The PayPal app allows users to purchase, sell, and store Bitcoin, Bitcoin Cash, Ethereum, and Litecoin currencies. It also provides educational articles that teach users crypto basics.
Paypal made this list because it’s expanding the average person’s access to crypto transactions. With PayPal, folks can dabble in some of the most popular cryptocurrencies, even using them to pay for purchases at online stores.
7. Block Inc. (SQ)
Block, formerly known as Square, Inc., is a financial services and digital payments company. The company holds bitcoin on its balance sheet and allows cryptocurrency transactions through the Cash App. It’s expanding into cryptocurrency and digital wallets, bringing it closer to allowing crypto transactions between businesses and customers across the globe.
Block is an attractive crypto stock because the company doesn’t exclusively rely on crypto for its revenue. On top of this fact, Block allows users to use cryptocurrency as payments between each other, which cuts out banks and other intermediaries.
8. Tesla (TSLA)
Since Elon Musk, the founder of Tesla, is a huge proponent of cryptocurrency, we felt this stock was worth adding to the list. Musk
Tesla purchased about $1.5 billion worth of Bitcoin early in 2021, and it temporarily accepted Bitcoin payments for transactions. Currently, the only cryptocurrency Tesla accepts for transactions is Dogecoin.
9. Bitfarms Ltd. (BITF)
Bitfarms is a Canadian-based company that’s involved in the mining of cryptocurrency coins and tokens in North America. The company sees revenue from increasing value in the Bitcoin they mine and from holding on to it.
Because Bitfarms is a mining company, it’s important to stress that the price of this stock can be tied to Bitcoin’s market value.
10. Silvergate Capital Corporation (SI)
Silvergate is a cryptocurrency banking platform that has built a real-time payments system, the Silvergate Exchange Network, to instantly send and clear transactions with cryptocurrency exchanges.
Silvergate is a popular stock for those looking for crypto exposure because it’s one of the rare stocks with a resilient business model that can withstand extreme swings in the crypto space.
11. Marathon Digital Holdings, Inc. (MARA)
Marathon is a digital asset technology company focusing on bitcoin mining, processing, and verifying transactions. The company gets paid in bitcoin, which it can sell to generate revenue.
The company focuses on investing in miners to improve the speed of bitcoin mining. It currently has over 36,830 miners and expects to have about 199,000 miners by 2023.
Recently, the price of bitcoin has been highly volatile. Because the company’s value is directly tied to the value of bitcoin, this stock is riskier than others on this list.
What are the benefits of buying these stocks instead of cryptocurrency directly?
While investors can’t ignore the future potential of blockchain technology, there is volatility that comes with crypto investing.
The main benefit of investing in any of these stocks is you’re not purchasing one type of cryptocurrency, hoping it will increase in value. These companies offer diversification, a crucial safety net in such a volatile market.
Over the years, general expert advice has been that you should only allocate about 5% or less of your portfolio towards these speculative assets. You can assign a higher portion of your portfolio when you invest in stocks that offer cryptocurrency exposure without being complete crypto assets.
You’re also investing in blockchain technology and digital payments systems that will likely become increasingly popular in the future as more of the world goes online. If you believe in this technology, you will want to invest your money in something you feel confident about.
The final word.
If you want to start investing in cryptocurrency without fully committing to one coin, consider these 11 stocks instead. It’s important to remember that every investment comes with some volatility, and there are no guarantees that these stocks will go up in value.
Want to hedge your risks further? Check out Q.ai’s Bitcoin breakout kit. The kit’s goal is to benefit from future Bitcoin appreciation while reducing the risks from potential tech selloffs.