11 stocks to invest in crypto without buying crypto directly
Buy crypto indirectly.
Many of us want to invest in cryptocurrency but are not ready to accept the volatile nature of most digital currencies. If so, you may be surprised to learn about these alternative crypto investment methods.
Buying cryptocurrency can be a steep learning curve for those new to the space, even setting up a crypto wallet is still not intuitive enough for mass adoption. So how does one get into the crypto game without buying currency outright?
Can you invest in crypto without buying crypto directly?
Fortunately, it is possible to add some cryptocurrency exposure to your portfolio without buying any actual coins.
Here are three easier ways to invest in cryptocurrency that don’t involve buying coins:
- Invest in companies that have cryptocurrency. These companies use resources to invest in cryptocurrency, which means they have it on their balance sheet.
- Invest in a cryptocurrency ETF. Some ETFs give you cryptocurrency exposure without directly buying digital currencies.
- Invest in cryptocurrency infrastructure or blockchain technology. This investment involves any company that focuses on blockchain, cryptocurrency mining or cross-border transactions.
There is no need to buy an entire coin or worry about cryptocurrency fluctuations 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 the risk associated with a player.
1. ProShares Bitcoin Strategy ETF (BITO)
Since this is a futures ETF, the company does not hold any bitcoin. Instead, the fund gains exposure to bitcoin prices with futures contracts.
This fund is the first, and currently only, type of bitcoin-linked ETF on the market at the time of publication. Unfortunately, the SEC has rejected several other proposals for bitcoin or cryptocurrency ETFs.
For the uninitiated, ETFs (exchange-traded funds) are a hybrid between stocks and mutual funds. When you buy shares in an ETF, you buy into a number of investments owned by the fund.
2. Microstrategy (MSTR)
MicroStrategy is on this list because the company invests in Bitcoin as its primary reserve. While the company offers business intelligence and cloud services, it holds about $5 billion worth of bitcoin.
Since the company is simply buying bitcoin with its working capital, many experts feel that the stock should rise as 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 facilitating the buying and selling of dozens of cryptocurrencies so that new investors can enter the market. It also offers educational services, including tutorials and market updates so that novice crypto investors can learn along the way.
Even if you are not investing directly in crypto when you invest in Coinbase, remember that this stock is heavily linked to the volatile crypto market.
4. Riot Blockchain Inc. (RIOT)
Riot is one of the largest Bitcoin miners in America. We included them in the list because of the growing demand for cryptocurrency despite the limited supply. Experts estimate that miners won’t unearth every single bitcoin until 2140, which means these mining companies have a lot of work to do.
To produce new bitcoin, miners will use powerful technology to solve cryptographic challenges to verify transactions on the blockchain. In return for this effort, the miners collect newly created bitcoins as a reward.
Since mining companies are highly dependent on their mined assets, the value of this stock is likely to rise as Bitcoin increases in value.
5. Robinhood Markets (HOOD)
Robinhood is a fairly popular discount brokerage app that has recently allowed users to trade cryptocurrency alongside stocks and options.
Robinhood has billions of dollars in crypto-assets under custody, depending on revenue from crypto-trading. It has a significant competitive advantage over its competitors because they have a commission-free model and access to many cryptocurrencies.
Robinhood does not rely entirely on crypto transactions for revenue. Most of the revenue comes from transaction fees on trades, which can provide investors with more stability than other cryptocurrency exchanges.
6. Paypal (PYPL)
Paypal is a household name for digital financial transactions, and it has recently stepped into the crypto world. The PayPal app allows users to buy, sell and store Bitcoin, Bitcoin Cash, Ethereum and Litecoin currencies. It also provides educational articles that teach users basic cryptography.
Paypal made this list because it expands the average person’s access to crypto transactions. With PayPal, people can dabble in some of the most popular cryptocurrencies, even using them to pay for purchases in online stores.
7. Block Inc. (SQ)
Block, formerly known as Square, Inc., is a financial services and digital payments company. The company has bitcoin on its balance sheet and allows cryptocurrency transactions through the Cash app. It expands to cryptocurrency and digital wallets, bringing it closer to allowing crypto transactions between businesses and customers worldwide.
Block is an attractive crypto stock because the company is not solely dependent on crypto for its revenue. On top of this fact, Block allows users to use cryptocurrency as payments between each other, cutting out banks and other intermediaries.
8. Tesla (TSLA)
Since Elon Musk, the founder of Tesla, is a big proponent of cryptocurrency, we felt this stock was worth adding to the list. Musk
Tesla bought Bitcoin for around $1.5 billion in early 2021 and they 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 involved in the mining of cryptocurrency coins and tokens in North America. The company sees revenue from increasing the value of the Bitcoin they mine and from holding it.
Because Bitfarms is a mining company, it is important to emphasize that the price of this stock can be linked to Bitcoin’s market value.
10. Silvergate Capital Corporation (SI)
Silvergate is a cryptocurrency banking platform that has built a real-time payment 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 is 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 focused on bitcoin mining, processing and verifying transactions. The company is 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 around 199,000 miners by 2023.
Recently, the price of bitcoin has been very 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 cannot ignore the future potential of blockchain technology, there is volatility that comes with crypto investing.
The biggest advantage of investing in any of these stocks is that you are not buying one type of cryptocurrency, hoping that 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 to these speculative assets. You can allocate a higher portion of your portfolio when you invest in stocks that offer cryptocurrency exposure without being full crypto assets.
You are also investing in blockchain technology and digital payment systems which are likely to become increasingly popular in the future as more of the world goes online. If you believe in this technology, you want to invest your money in something you feel confident about.
The last word.
If you want to start investing in cryptocurrency without fully committing to one coin, consider these 11 stocks instead. It is important to remember that every investment comes with some volatility and there are no guarantees that these stocks will increase in value.
Do you want to further secure your risks? Check out Q.ai’s Bitcoin breakout kit. The set’s goal is to take advantage of future Bitcoin appreciation while reducing risk from potential technology sales.
