Blockchain is the database for digital transactions and cryptocurrencies. You can choose to invest in blockchain in a range of different ways, from investing via stocks of companies that offer these services or are in the process of developing those services. Blockchain technology is seen to be high risk as an investment. We all see Bitcoin dominating the financial news headlines, and it’s not always for a good reason. Investors are watching the volatile prices swinging back and forth, and they see the appreciation potential, too. Blockchain is, however, different. Blockchain doesn’t get as much attention, but it should!
What is blockchain?
Before you can learn how to invest in blockchain, you should learn what it is. Blockchain is an electronic ledger. The data can be entered into it but it cannot be changed, altered or deleted once it’s in. This gives it integrity and permanency like nothing else and there is not just one blockchain out there. There have been blockchains emerging since January 2009. Some of these support Bitcoin, but others support multipurpose platforms and work differently.
How to invest in blockchain
Investing in blockchain as a technology has become a huge conversation over the past years, and there are so many ways that you can do it. One of the simplest ways is to buy shares in a publicly traded company that uses blockchain technology or works with cryptocurrency. Some of the most well known and publicly traded business that use blockchain technology include these (for example):
There are also publicly traded companies that can offer cryptocurrency related services – or they can be directly exposed to cryptocurrency. These include companies like:
- Grayscale Bitcoin Trust
- Intercontinental Exchange
- CME Group
While cryptocurrency is becoming much more mainstream in its uses, it’s much more likely that crypto firms will be listed publicly as a result. Buying individual stocks is not the only way that you can gain exposure to blockchain, either. It’s important that you look into funds that provide exposure to blockchain technology. Most investors choose to hold a portfolio of assets, exchange traded funds and mutual funds. These are usually the instrument of choice and they can offer diversification and less risk with a much lower cost. They have a big advantage in this new blockchain sector, too.
As a blockchain is a tool that has a range of different purposes, there are no direct methods to invest in that blockchain. However, you can choose to invest in the technologies and companies that we listed for you above. This will ensure that you get the products and services that you need that use blockchain. You can also purchase stocks in a company that develops blockchain solutions, and digital securities are tokenized on the blockchain. You can then purchase these to buy ownership in those businesses that also tokenize their shares.
Investing in the blockchain is risky, but it’s worth it for the returns over time.