How to Invest in Cryptocurrency Without Buying It

If you want to invest in cryptocurrencies without buying them directly, there are a few things you should know. You can choose to invest in Bitcoin, Ethereum, or other altcoins indirectly. Here’s what you need to know about indirect investment in cryptos.

If you’re not interested in cryptocurrency but still want to invest, don’t worry! There are plenty of options for an indirect investment where you can get exposure to it without having to actually buy any. These traditional methods include stocks, mutual funds, and exchange-traded funds (ETFs).

As previously stated, there are several factors to consider, including security, costs, and the risk of losses. When you purchase cryptocurrency through a third party, that third party will gain money in some manner; therefore, think about it when deciding whether or not to make an indirect investment.

The first way to acquire cryptocurrency without immediately purchasing it is through investment funds. Grayscale Bitcoin Trust is one of the first well-known entrants to this market.

GBTC functions similarly to an ETF, but it is classified as a different type of investment. By investing in GBTC through your brokerage account, you will gain similar benefits to buying a Bitcoin fund. The value of your GBTC investment will correlate with the market price of Bitcoin.

The biggest downside to Grayscale is the 2% expense ratio.

It’s as simple as this. They’re just taking a 2% cut for purchasing Bitcoin and keeping it in your name at a wallet. You can accomplish that yourself with little effort, saving money on the cost of holding Bitcoins in your own account.

The ProShares Bitcoin (COIN) and ProShares Short Bitcoin Futures Strategy ETF (SGBTC) are two separate funds that aim to provide investors with a hedge against the currency’s volatility. Other alternatives include the VanEck Bitcoin Strategy ETF (XBTF), Global X Blockchain & Bitcoin Strategy ETF (BITS), and the Bitwise 10 Crypto Index Fund (BITW). Fees, as well as underlying investments, differ depending on which fund you choose.

If you’re looking to invest in a firm that works in the blockchain sector, choose between firms that create or hold crypto on their balance sheets.

Cryptocurrencies are produced through a process called “mining.” They may be mined using any computer with a GPU and internet connection, as well as video cards that have been modified to mine. Riot Blockchain (RIOT), Canaan (CAN), HIVE Blockchain Technologies (HIVE), and Bitfarms are four examples of stocks in the cryptocurrency space. Coinbase is one of the most recognized cryptocurrency exchanges and includes COIN as one of its top 10 cryptocurrencies.

Not only do cryptocurrency prices usually drop during a downtrend, but many crypto stocks tend to fall as well. Keep that in mind before making any purchases, and if you have second thoughts about your investment decision or plans, consider talking to a reliable financial professional.

Besides buying cryptocurrency outright with fiat currency, another way to fill your portfolio is by using credit card rewards. Some cards offer the opportunity to earn crypto just for paying with the credit card like you normally would.

The BlockFi Rewards Visa Signature card, Gemini Credit Card, and Upgrade Bitcoin Rewards Visa are notable personal cryptocurrency credit cards. The exchange and Coinbase offer a rewards card as well.

The SoFi personal credit card and Venmo credit card offer great redemption options, including cryptocurrency.

By earning crypto as a credit card rewards, you are investing in crypto without having to put any money down. Even if the value goes down, you didn’t spend anything so whatever you end up with is pure profit.

Cryptocurrencies are sometimes described as a revolutionary technology that will revolutionize the world. For individuals who want to be part of the new technology, investing indirectly in cryptocurrency is an excellent alternative. As a consequence, the portfolio will be more diversified, and the risk will be dispersed more widely.