Invest in Cryptocurrency Stocks Instead of Real Cryptocurrency
Just a few years ago, buying up cryptocurrency was all the rage. In theory, you could spend a little bit on Bitcoin or one of the other popular cryptocurrencies and cash out at an amazing rate of return.
But as you might have noticed, Bitcoin and some of its contemporaries are now in a post-hype stage, as Coin Talk’s Jay Caspian Kang previously pointed out . Crypto is no longer a viable get-rich-quick scheme ( I mean, has it ever been? ), And experts warn against it if you’re looking for short-term gain.
But perhaps you are still interested in how the cryptocurrency is developing and want to diversify your investment portfolio a little. Instead of buying some kind of coin, you can invest in cryptocurrency through stocks. From a logistic point of view, this is much easier than remembering an access key and storing your digital currency securely . This is potentially less risky. But should you do it?
The stock market is still risky by design , but if you are reading this and have at least a retirement savings account, you are probably already playing the game. Cryptocurrency stocks can be an option to invest in this new technology without affecting the final product.
The Wall Street Journal recently named Overstock.com Inc., Nvidia Corp. and Hut 8 Mining Corp. as popular cryptocurrency stocks. These companies do not usually issue their own cryptocurrency like Bitcoin or Ethereum. Instead, they are focusing on developing blockchain technology that enables cryptocurrency transactions.
But the document also indicates that there is still a lot of volatility. Cryptocurrency-related stocks have tumbled after the crypto bubble burst in 2018, and while Overstock.com and Hut 8 Mining have stabilized, they are nowhere near their previous peak performance.
In terms of their involvement in the crypto game, Overstock, for example, is an e-commerce retailer. He also runs a blockchain subsidiary called tZero and plans to release his own currency under that name next year. Other cryptocurrency players are well known on stock tickers: Microsoft, Visa, PayPal, and Goldman Sachs on Yahoo! List of “Best Cryptocurrency Bets” from Finance .
“The fact that a company primarily focuses on cryptocurrency and blockchain does not mean that it cannot have other lines of business or even be in other segments of the cryptocurrency value chain to diversify business risks associated exclusively with a limited number of cryptocurrencies. said Riley Adams, Chief Commercial Officer and blogger for Young and The Invested .
Basically, just as you want to diversify your investment portfolio to reduce the risk of one bad stock buy wiping out your earnings, companies also want to reduce their risk by diversifying the way they invest money in their own company. Focusing on the technology behind specific currencies, Adams said, “dramatically reduces the risk that any currency will collapse after significant investment in it.”
Adams advised checking companies that are working on facilitating payments or blockchain infrastructure, rather than those focused on one particular type of cryptocurrency.
If you don’t want to track individual stocks , you can still get some of this cryptocurrency development. Many Yahoo! The list, for example, can be found in index funds based on company size or industry.