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5 Ways to (Safely) Invest in Cryptocurrencies in 2021

5 Ways to (Safely) Invest in Cryptocurrencies in 2021

Cryptocurrency investing has taken the world by storm after proving its seemingly unlimited profit potential. Unfortunately, investing in cryptocurrency is a newer concept with less regulation, meaning anything can happen. While this has turned many risk-averse traders away, there are now more safe investment opportunities than ever before.

Invest in Gold-Backed Cryptocurrencies

Now recognized as digital gold, gold-backed cryptocurrencies are known to be stable investments since their value is pegged to the deflationary precious metal, gold. Like other stablecoins, each token represents a certain amount of gold. In most cases, one gram of gold is equivalent to a single token. The issuing company holds the equivalent amount of gold in a secure storage place that can theoretically be exchanged with the investor’s tokens at any time. These coins can be purchased directly from a creator website or from a cryptocurrency exchange like GoldExchange.com.

Investors can use the classic buy and hold strategy or elect more hands-on trading techniques, including future orders with preset Buy Stops and Buy Limits.

Purchase Popular Coins from an Exchange

Although more volatile, purchasing small amounts of a popular cryptocurrency from a reputable exchange is one of the most secure methods to invest in crypto. Exchanges make money by charging fees, which are paid through coin usage. That said, transactions occur relatively quickly since most exchanges have a high volume of traders interacting with them. The only downfall is that even among cryptocurrency exchanges, you must decide which coins to buy and which exchange makes the most sense for your goals as an investor.

Like any investment, diversification is crucial, and putting some money into several different coins might prove to be a less risky strategy. On exchanges like Coinbase and Kraken, scams are uncommon, and users will be given a wide range of coins to choose from.

Blockchain ETF

Exchange-traded funds were originally created to make investing in a variety of assets as simple as purchasing a single asset. As a result, these investments reduce some of the risk associated with investing in a volatile asset since they are made up of a pool of investments. In some cases, Blockchain ETF’s may be used more specifically to invest in futures and options according to the performance of Bitcoin, Ether, and other well-known cryptocurrencies. One example is the Bitwise 1- Private Index Fund, based on the Bitwise 10 Large Cap Crypto Index which contains a basket of popular cryptocurrencies.

Buy Stocks from the Companies that are Investing in Cryptocurrencies

Predicting the future of cryptocurrencies can be tricky since nobody knows what the future holds. However, more and more enterprises have since taken the initiative to invest in cryptocurrencies themselves. With no shortage of companies creating opportunities for cryptocurrency payments and transactions, traders can safely invest in reputable companies that are working on these initiatives. Some companies that are worth considering include Salesforce.com, Shopify, PayPal, and Mastercard.

Although these stocks are not direct cryptocurrency investments, they protect traders from the uncertainties around cryptocurrency. Since these businesses have many innovative fronts, it is likely their stocks will continue to increase regardless of the technology adopted. If cryptocurrencies do gain traction, the companies that had an early start in their development will likely be the first to benefit in the next few years.

Use Financial Apps Such as the Robinhood App

Robinhood, a popular investment app, has recently added cryptocurrency to the list of available offerings. Robinhood is a broad investment app that allows commission-free cryptocurrency investing for Bitcoin (BTC), Bitcoin SV (BSV), Ethereum (ETH), Ethereum Classic (ETC), Litecoin (LTC), and a few others. The app itself is good for investment purposes but has limited functionality for those who want to use cryptocurrency to buy and sell goods.

Square has also released a Cash App that allows customers to get bitcoin back on purchases similar to a cashback card. For users who are already collecting cash back or other points on purchases, this app provides a unique opportunity to begin collecting cryptocurrency coins with minimal effort.

The future continues to look bright for cryptocurrencies, which can be likened to several new and safe investments. From financial apps to ETFs, there is now an investment vehicle for anyone and everyone.


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by Harvey Carr // Harvey Carr is a contributor to Businessing Magazine.

Opinions expressed by contributors are their own.