Different Ways of Investing in Blockchain

Blockchain technology has the potential to transform different industries around the world and it has become one of the hottest trends in the financial markets. Blockchain is a distributed ledger technology (DLT) or like a massive digital spreadsheet where every transaction is recorded. Transactions and data is confirmed and recorded, which can be accessed by all the participants.

While it is true that blockchain technology played an important part in the development of the cryptocurrencies like Bitcoin, the potential of blockchain technology to adapt to other uses is creating new ways of investing, both related and distinct from the crypto market.

Bitcoin and other blockchain-based cryptocurrencies are rapidly expanding and providing us with new opportunities to make profits. For instance, crypto yield farming or just buying and holding crypto assets until their price value goes up have proved to be effective ways of making money in decentralized finance (DeFi).

Features of blockchain technology are too good to just ignore. Blockchain-based cryptocurrencies are having a very similar impact on the finance industry to that of the internet on the publishing and music industries. However, the good news for investors is that there are different ways of investing in blockchain, even where they can leverage the potential offered by this transformative technology.

While how an investor decides to invest in blockchain will depend on the risk he or she is willing to take, there are two broad areas of blockchain technology to consider. The first one is pure cryptocurrency plays. The second is investing in businesses that are developing and implementing blockchain-based products and services, which range from financial technology and supply chain management to healthcare.

Collecting Crypto Assets

Just like people used to stockpile gold or other valuable materials with hope that its value will rise over time, many investors are now stockpiling cryptocurrencies. This is completely justified. Think about those who invest in Bitcoin, the most well-known cryptocurrency, a couple of years ago when the price was less than $1,000. Today, the price value of one Bitcoin is $46,000.

Still, the method of investing remains the same. Bitcoin is rare and finite as the total supply is limited to 21 million coins. This makes the cryptocurrency subject to the law of supply and demand, which is that if the supply of a product is limited and the demand for the product increases, its value will rise.

Crypto enthusiasts believe that the price of Bitcoin will soon reach $100,000 and the cryptocurrency definitely has the potential to achieve that in the near future. Moreover, there are many other promising cryptocurrency projects like Ethereum and Ripple. If you are convinced, all you have to do is buy some cryptocurrency and wait for its price value to increase.

Blockchain Penny Stocks

Most people think about Bitcoin and Blockchain when they hear the word “cryptocurrency”. However, there are hundreds of blockchain-based cryptocurrency projects that exist today and yes, penny stocks for blockchain-powered cryptocurrencies is a thing.

Many alternative cryptocurrencies have been developed over these last few years, these are often referred to as Altcoins. These Altcoins have been designed to compete with Bitcoin by filling the needs that were not met by Bitcoin.

Penny stocks that represent crypto projects or blockchain technology provide us with more investment opportunities. However, it is important to note that while most crypto projects are backed by blockchain technology, no one can guarantee when the price of a cryptocurrency will go up or down. Remember that it is a good idea to start small as crypto assets are very volatile.

Pure Play Method

Yes, Pure play method of investing can be used with blockchain technology. Many established companies around the world are investing in blockchain to be used by various industries, these include Intel Corp. (INTC) and IBM Corp. (IBM), IBM has it’s very own “IBM blockchain platform” as well.

These companies that are investing in blockchain allow investors to invest in the potential of blockchain technology while playing safely. You can learn more about blockchain startups and projects that you can invest in. 

However, the best investment option for those who are looking to keep the level of risk low is to invest in a technology company which is investing in broader applications for blockchain products and services, or invest in the stocks of a major financial services company that is experimenting with the potential of this revolutionary technology.
On the other hand, those who can tolerate a higher degree of risk for potential returns should invest in one of the pure blockchain technology investment opportunities. You could work with blockchain consultants who will analyze, develop and test blockchain technologies.