Ways to Invest in Blockchain

Bitcoin continues to make headlines for its rollercoaster behavior. In 2017, the cryptocurrency made a whopping 1,850% run which made it the darling of investors. But just a year after, Bitcoin prices sunk fomenting anguish to investors who were caught off-guard. Leading to 2020, Bitcoin and most other cryptocurrencies saw erratic price movements.

Due to the volatility of digital currencies, long-term investors are particularly cautious about them. But despite the flawed philosophy of cryptocurrencies, many are still drawn to the technology behind it because of its promising future.

To limit your risks associated with the instability of Bitcoin and other cryptocurrencies, you should invest in the blockchain. Some interchange cryptocurrencies and blockchain but they are not the same. Blockchain is the underlying technology that supports Bitcoin and other digital currencies. It is a secure, digital record system that uses a decentralized network of servers. Aside from being used as a platform for transacting cryptocurrencies, blockchain technology is increasingly utilized in other purposes completely unrelated to Bitcoin or digital currencies. Blockchain technology applications include keeping track of legal documents, improving cloud storage, smart contracts, medical records, and data decentralization.

Blockchain holds a promising future with numerous untapped possibilities. Even if digital currencies crash, the technology would remain. This makes blockchain-based investment tools the best assets today and in the future.

If you want to invest in blockchain but don’t want to direct exposure to the unpredictability of cryptocurrencies, here are some of the best ways. These investment tools are anchored on blockchain technology, to varying degrees.

Stockpile Bitcoin

Although cryptocurrencies seem unpredictable and risky, Bitcoin is one of the best investment tools today. For those who have held Bitcoin since 2010, they netted an impressive 12 million percent ROI. In 2019, cryptocurrencies were the top-performing asset type, even better than the stock market. In 2020, digital currencies have again shown resilience as they weathered the market crash due to the coronavirus. Of course, Bitcoin also has a history of crashes such as in 2018 wherein it saw a major slump (over 80%). But while this has happened multiple times, cryptos can bounce back.

Anticipating its rising prices in the future, many investors are now stockpiling on bitcoins. Just like gold, Bitcoins can be stored and traded later on. Keeping it dormant protects your asset from the volatile market movement.

Blockchain penny stocks

Alongside the growing popularity of Bitcoin is the emergence of numerous penny stocks for digital currencies. Created to compete with Bitcoin, these cryptocurrencies are great alternative investment tools. Examples of alternative digital currencies include Litecoin and Altcoins.

Altcoin crowdfunding

In the stock market, companies raise funds or capital by going public, also known as Initial Public Offering (IPO). This is also common in the blockchain industry. If you have an innovative blockchain-based project, a popular way to raise seed capital is through crowdfunding. In crowdfunding, the company pre-mines and offers alternative coins. These coins are then sold through an Initial Coin Offering ( ICO) before its public launch. Investors can participate through crypto crowdfunding platforms like Stokr, BnKToTheFuture, Waves, and QTUM.

Angel Funding and Startup Ventures

Blockchain companies that lack funds to support their solutions are in search of angel fund and startup venture capitalists. Due to the increased interest in technology, investing in blockchain-based innovations is gaining traction. You can find blockchain startups through platforms like BnKToTheFuture and SeedInvest.

Pure-play Blockchain or Cryptocurrency Business

With the increased attention on distributed ledgers, we saw a rise in the number of companies offering pure blockchain technology as well as the rice of cryptocurrency businesses. These businesses are focused entirely on real-world implementation of blockchain. Some examples include BTCS, Inc., Space Corporation, and Global Arena Holding.

Some investors think that digital currency and blockchain technology are just a fad. However, these technologies continue to pick up and could potentially revolutionize the way the world works. By investing in these companies, you can expect lucrative gains once the blockchain company becomes widespread.

Blockchain-related stocks

Blockchain stocks allow you to invest in blockchain technology without exposure to the risks of digital currencies as well as speculative pure-play blockchain companies. Unlike the pure blockchain companies, blockchain-related stocks are well-established leaders in their industries but with a major interest in the distributed ledger technology. These publicly traded companies may offer blockchain-related products and services, incorporate the technology into their operations, or play a role in the blockchain development.

Some excellent blockchain companies you can invest in include IBM, CME Group, MasterCard, Square, Amazon, Docusign, and Nvidia. These companies have well-established operations not related to cryptocurrency or blockchain which makes them safe, long-term investment tools.

Blockchain ETFs

Blockchain exchange traded fund (ETF) is a basket of individual stocks. Instead of trading different stocks, this fund compiles several stocks to come up with a low-risk, high-gain investment. Managed by experts in stock trading, ETFs hold many blue-chip companies like Goldman Sachs, Microsoft, and IBM. Some examples of ETFs with exposure to blockchain include Innovation Shares NextGen Protocol (KOIN), Amplify’s Transformational Data Sharing ETF (BLOK), and Reality Shares NexGen Economy ETF (BLCN). All of these traded funds have a low risk of exposure to cryptocurrencies.

Final Thoughts

Without a doubt, blockchain technology looms large and holds a very promising future. It’s only a matter of time when blockchain will revolutionize the world. Various researches expect the blockchain market to grow over the years as various sectors continue to adapt it.

As an investor, it is just fitting that you’ll have a certain degree of wariness over such a speculative technology. These were the same feelings investors had when the Internet, computers, and other innovations first came. Fortunately, there are many ways to invest in blockchain. Hopefully, the methods discussed above can help get you started.