Cryptocurrencies are a very risky asset: the price can change by several percent a day, and it’s unlikely to predict the price and yield. But some investors put some money into cryptocurrency in the hope of multiples growth or are looking at such assets.
Cryptocurrencies are traded on regular exchanges, but there are still ways to invest in them – through shares in companies that own, trade or mine cryptocurrencies, or through funds. We tell you how to invest in cryptocurrency.
MicroStrategy (MSTR)
The company develops software, but it has about 114,000 bitcoins. That’s about $7.7 billion.
The more expensive bitcoin is, the more the company’s assets and its stock are worth, and vice versa. However, the correlation is not perfect and the company itself is operationally unprofitable.
Coinbase (COIN)
This is a U.S. cryptocurrency exchange whose shares began trading publicly in April 2021.
The exchange earns on commissions from cryptocurrency transactions. The more popular and volatile the cryptocurrency, the better for business.
Riot Blockchain (RIOT), Marathon Digital (MARA) and others
These are companies that mine cryptocurrency, most often bitcoin. Usually such companies own large amounts of cryptocurrency. For example, Marathon Digital has 7,453 bitcoins worth $506 million.
The more expensive bitcoin, the more expensive the companies’ assets are and the more profitable it is to mine the cryptocurrency. Meanwhile, from March 2020 to March 2021, the beta ratio for mining stocks was about 2.5: if bitcoin rose or fell by 1%, the stock rose or fell by 2.5%
Bitcoin funds: GBTC, BTCC and others
There is the Grayscale Bitcoin Trust (GBTC) in the United States. It has been operating since 2013 and tracks the price of bitcoin. The fund has over 654,000 bitcoins worth $44.5 billion.
GBTC’s price has often deviated from its fair price. In 2017, a GBTC unit was 132% more expensive than it should have been, and in November 2021 it was 15% cheaper.
Canadian ETFs like BTCC and BTCX should better track the bitcoin price. However, they only appeared in 2021 and it is too early to judge. Also in the U.S., the BITO ETF, based on bitcoin futures, was recently launched. These funds have lower commissions than GBTC.
Ether funds: ETHE, ETHX and others
Grayscale has an ETHE trust that tracks the price of ether. The problem is the same as with GBTC: the price has often deviated from fair. At the end of 2018, the unit was 3,550% more expensive than it should have been. It is now 3% cheaper than the fair price.
Canada also has ETFs that track the price of ether – these are the ETHQ, ETHX and other funds. Costs are 1.25% a year or lower – versus Grayscale’s ETHE’s 2.5% a year
AXRP, HODL and others
Notes that track the price of various cryptocurrencies are traded on European exchanges. Unlike ETFs, notes, i.e. ETNs, have credit risk because they are a debt obligation of the company that issued them.
Here are examples: AXRP tracks the price of the cryptocurrency Ripple, HODL contains five currencies at once, and VBTC tracks bitcoin. There are more than 20 such products in Europe. Costs range from 0.95 to 2.5% per year.
Investing in cryptocurrency can be a roller coaster ride, but the potential for huge gains is definitely there. I’ve seen my investments multiply in value, especially with bitcoin. It’s important to do thorough research and stay updated with market trends to make informed investment decisions.
I think investing in cryptocurrency is a risky but potentially rewarding venture. With the volatility of the market, it’s important to carefully analyze each investment opportunity. Personally, I prefer investing in companies like MicroStrategy and Marathon Digital that hold a significant amount of cryptocurrencies. Their success is closely tied to the value of these digital assets, and I believe they have the potential for substantial growth.
I personally think investing in cryptocurrency is a high-risk, high-reward game. It’s like walking on a tightrope, but with the possibility of hitting the jackpot. I’ve put some money into bitcoin and ethereum, and I’m hoping for a massive growth in the future. Fingers crossed!
I think investing in cryptocurrency can be very profitable if you do your research and stay updated with the market trends. However, it’s important to remember the high volatility and risks involved. It’s not for the faint-hearted, but it can definitely pay off in the long run!
Investing in cryptocurrency can be a thrilling rollercoaster ride! As the price of cryptocurrencies can fluctuate greatly every day, it’s crucial to educate oneself before putting in any money. But if you believe in the potential for massive growth, it might be worth the risk.
I personally believe that investing in cryptocurrency can be extremely profitable if done correctly. However, it requires careful research and analysis of the market. It’s important to stay updated with the latest news and trends in the cryptocurrency world. Always be prepared for the volatility and understand the risks involved. Happy investing!
I think investing in cryptocurrency through shares in companies that own, trade or mine cryptocurrencies is a smart move. It allows investors to diversify their portfolio and potentially benefit from the growth of the cryptocurrency market. However, it’s important to be aware of the risks involved and do thorough research before making any investments.
Are there any other ways to invest in cryptocurrency besides investing in companies or through funds?
Yes, besides investing in companies or through funds, you can also invest in cryptocurrency directly through exchanges. This allows you to buy and hold the actual coins, giving you more control over your investments. Just make sure to do thorough research and be aware of the risks involved.
Cryptocurrencies are such a volatile investment. It’s like riding a rollercoaster! But the potential for high returns is hard to resist. I’m considering investing a small amount, just to see what happens.
I think investing in cryptocurrency can be a game-changer. The potential for high returns is undeniable, but the risks are also significant. It’s important to conduct thorough research and stay updated on market trends before diving in.
Is investing in cryptocurrency through shares in companies more reliable than trading directly on the exchanges?
Investing in cryptocurrency through shares in companies can provide a different level of reliability compared to trading directly on exchanges. When you invest in shares of companies that own, trade, or mine cryptocurrencies, you’re indirectly exposed to the potential benefits and risks of the cryptocurrency market without the need to handle the technicalities of trading on exchanges. However, it’s important to note that investing in any form carries its own set of risks. It’s advisable to thoroughly research the company, its financial position, and the overall market conditions before making any investment decisions. Always consider diversifying your investment portfolio and consulting with a professional financial advisor.
I personally believe that investing in cryptocurrency through shares in companies that own, trade or mine cryptocurrencies is a smart move. It allows you to indirectly invest in cryptocurrencies while also benefiting from the company’s performance. Of course, it’s important to do thorough research and understand the risks involved, but with the potential for exponential growth, it’s definitely worth considering.
I believe investing in cryptocurrency through shares in companies is a smart move. It allows you to benefit from the potential growth of cryptocurrencies while reducing the risks associated with direct investments. Plus, by investing in established companies like MicroStrategy and Coinbase, you also gain exposure to the broader crypto industry. It’s definitely worth considering!
Investing in cryptocurrency is such an exciting and risky venture! I’ve been following MicroStrategy for a while now, and their bitcoins holdings definitely make their stock more enticing. However, it’s important to remember that the correlation between bitcoin price and company value is not always perfect. Stay cautious!
I have invested in cryptocurrencies through exchanges before, but investing in shares of companies like MicroStrategy, Coinbase, Riot Blockchain, or Marathon Digital seems like a more indirect and safer way to be involved in the cryptocurrency market. I believe that as the price of bitcoin continues to rise, these companies will benefit greatly and their stock value will increase. It’s definitely a smart investment strategy for those who want to make profits while minimizing the risk.
Investing in cryptocurrency is a high-risk game, but the potential for massive returns is undeniable. I believe that buying shares in mining companies like Riot Blockchain and Marathon Digital is a smart move. As the price of Bitcoin rises, so does the value of these companies and their assets. Plus, with the growing popularity of cryptocurrencies, the demand for mining services will only increase. It’s a win-win situation!
I’ve been investing in cryptocurrencies for a while now and it’s definitely a rollercoaster ride. The prices can fluctuate so much in just a day! But despite the risks, I still believe in the potential for huge returns. It’s all about finding the right opportunities and staying updated on the market trends.
Can you recommend any other companies that are involved in cryptocurrency mining?
Sure, besides Riot Blockchain (RIOT) and Marathon Digital (MARA), you can also look into Hive Blockchain Technologies (HIVE) and Bitfarms (BITF). These are also reputable companies involved in cryptocurrency mining.
I believe investing in cryptocurrency through shares in companies like MicroStrategy, Coinbase, Riot Blockchain, and Marathon Digital is a great way to diversify my portfolio. The potential for exponential growth in the value of cryptocurrencies is undeniable, and these companies have proven to be leaders in the industry. I’m excited to see the future of cryptocurrency and the profits it may bring!
What are the risks of investing in cryptocurrency through shares in companies? Can you provide some examples of companies that have successfully profited from investing in cryptocurrencies?
Investing in cryptocurrency through shares in companies has its risks. One of the main risks is the volatility of cryptocurrencies themselves, as the market can experience significant price fluctuations. Additionally, investing in companies that hold, trade, or mine cryptocurrencies can be risky due to their dependence on the cryptocurrency market. If the market crashes or if there are any regulatory changes, these companies may suffer financial losses.
As for companies that have successfully profited from investing in cryptocurrencies, MicroStrategy is a notable example. Despite being operationally unprofitable, their investment in Bitcoin has significantly boosted the value of their assets and stocks. Coinbase is another successful company that earns from cryptocurrency transactions through their exchange platform. Companies like Riot Blockchain and Marathon Digital, which specialize in cryptocurrency mining, have also been profitable due to the increasing value of cryptocurrencies like Bitcoin. However, it’s important to note that past performance is not indicative of future results, and investing in cryptocurrency always carries risks.
I have invested in cryptocurrencies through shares in companies like MicroStrategy and Coinbase. It’s a risky move, but the potential for significant returns is there. I believe in the long-term growth of cryptocurrencies, despite their volatility.
Is investing in cryptocurrency through shares in companies more profitable than directly investing in cryptocurrencies on exchanges?
Investing in cryptocurrency through shares in companies can provide a more diversified approach compared to directly investing in cryptocurrencies on exchanges. By investing in companies involved in owning, trading, or mining cryptocurrencies, you benefit from their overall performance in the crypto market, potentially reducing some risk associated with individual cryptocurrency price volatility.
Are there any risks involved in investing in companies that own, trade, or mine cryptocurrencies? How can one assess these risks effectively?
Investing in companies that own, trade, or mine cryptocurrencies carries significant risks. It is crucial to conduct thorough research on the company’s financial health, market position, and regulatory compliance. One way to assess these risks effectively is by analyzing their historical performance, evaluating their business model, and staying informed about the latest trends in the cryptocurrency industry.
Are there any specific risks associated with investing in companies like MicroStrategy and Coinbase rather than directly in cryptocurrencies themselves?
Investing in companies like MicroStrategy and Coinbase can bring additional risks compared to directly investing in cryptocurrencies. These companies’ stock value can be influenced by various factors beyond just the price of the underlying cryptocurrency, such as operational performance, market sentiment, regulatory changes, and more. It’s crucial to carefully analyze both the company’s financial health and its exposure to the cryptocurrency market before making investment decisions.
Do you have any recommendations on which company’s shares are more stable for investment in the volatile cryptocurrency market?
Cryptocurrencies are a very risky asset: the price can change by several percent a day, and it’s unlikely to predict the price and yield. But some investors put some money into cryptocurrency in the hope of multiples growth or are looking at such assets.
Investing in cryptocurrency is like riding a rollercoaster – thrilling and risky. I believe in the potential for growth, but the volatility keeps me on the edge of my seat!
Investing in cryptocurrency through shares in companies that own, trade, or mine them seems like a fascinating opportunity. The volatile nature of cryptocurrencies makes it both thrilling and nerve-wracking. It’s always a gamble, but the potential for significant growth is what keeps me hooked on this market.