When you think of investing in Bitcoin, the only thing that tends to come to mind is that you have to buy it. However, there are ways of investing in the world’s largest cryptocurrency other than purchasing it. If you’re wondering how that’s possible, read on.
The most popular alternative to buying Bitcoin is to trade in exchange-traded funds or ETFs. ETFs track Bitcoin prices and they have been popular for a long time in Europe and Canada. However, in the USA, ETFs faced a hard time from regulators initially. The scene changed in October 2021 in the USA though, as ETFs related to Bitcoin were given the go-ahead by the government.
ETFs involve investing in Bitcoin futures, and they track the spot price of Bitcoin by using the contracts that the Chicago Mercantile Exchange oversees. The two ETFs launched in the USA so far include the (BTF) and the (BITO). Investors have to pay $9.50 for a $1,000 investment.
Another way to invest in Bitcoin without buying the crypto token is to buy conventional stocks in a company related to Bitcoin. For the average investor, this is the safest way to invest in the crypto, as the structures of companies are more familiar. The finest example of such a company would be Coinbase Global Inc. The crypto exchange generates the majority of its revenue from the fees charged from users for trading and depositing funds. As a result, the fluctuations in its valuation maintains a correlation with the price of Bitcoin.
Yet another way for investors to put in their money into Bitcoin without buying it is to invest in the tech itself. Companies such as Riot Blockchain and Marathon Digital Holdings Inc. provide Bitcoin mining services.