Cryptocurrencies reached mainstream: How investors can invest in Bitcoin & Co

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Cryptocurrencies reached mainstream: How investors can invest in Bitcoin & Co

So for those who haven’t jumped on the crypto bandwagon yet, the barriers to entry continue to decrease and there are numerous opportunities to invest in cryptocurrencies. The following are arguably the three easiest ways to capitalize on the crypto boom.

Direct investment

The hurdles when buying cryptocurrencies directly have more or less disappeared to this day: For example, the payment service provider PayPal offers its customers the opportunity to buy, sell or hold Bitcoin, Ethereum, Litecoin and Bitcoin Cash.

The online payment provider Block (formerly Square) is also increasingly focusing - as the name change already indicated - on blockchain technology and, with the Cash App, has expanded its offering to include peer-to-peer payments and trading in shares and cryptocurrencies.

In addition, the trading app Robinhood, for example, which came under criticism after market turbulence surrounding meme stocks such as GameStop and AMC, also offers trading in cryptocurrencies.
According to Yahoo Finance, a major advantage of direct investments is that the cryptocurrencies are in your own custody and that investors do not have to pay any management fees - however, investors should be very vigilant when investing in the crypto market in this way.

There are ways to protect your own digital assets, such as a hardware wallet, cyber security tools or a password manager.

Crypto Mining Stocks

Institutional investors used to view crypto mining companies as largely uninvestable, reports Yahoo Finance.

The only way for crypto miners to fund more growth assets was to sell the bitcoins they mined, but IPOs have started giving them access to equity funding. As a result, crypto mining companies now have the opportunity to hold more of their digital assets in reserve and consequently benefit significantly from rising crypto prices.

For example, Marathon Digital Holdings recently increased its reserves to 8,027 bitcoin valued at $244 million, currently bringing its bitcoin reserve to just over a quarter of the company's current market value of $906.81 million.

is coming (as of June 9, 2022).
As a benefit of investing in mining stocks, Yahoo Finance highlights that the securities are easy to buy and sell while also leveraging the upside potential of their underlying crypto assets.

The downside is that the crypto mining industry is highly competitive and there is a risk that margins could come under pressure in the future.

Crypto Service Providers

Another way to benefit from the crypto boom is to invest in crypto service providers, such as the crypto exchange Coinbase.

The cryptocurrency exchange is probably the most popular place for newcomers to go, according to Yahoo Finance. According to its own statements, the popular crypto exchange enables the purchase, sale, safekeeping or transfer of cryptocurrencies in over 100 countries and now has more than 98 million verified users.

Quarterly trading volume is $309 billion.
The benefit of investing in a service provider like Coinbase, Yahoo Finance reports, is that they generate revenue from a wide variety of crypto products, providing access to the entire sector.

On the other hand, such service providers are often confronted with competition, regulatory uncertainties and the threat of cyber attacks.
Which strategy for a crypto investment is ultimately best suited for whom depends on various factors such as risk tolerance and investment goals and must therefore be decided individually.