Investors interested in cryptocurrency are likely aware of the huge decline that bitcoin and other cryptos have taken over the past two months. It all started when the algorithmic stablecoin Terra crashed, triggering a strong sell-off that affected the entire crypto market.
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Given its volatility, cryptocurrency is not for the faint of heart. It not only tends to make wild price swings, but it’s also expensive, can’t be purchased through traditional brokerage accounts, and doesn’t have the backing of financial institutions, CNBC reported.
So what is the best way for investors to get a piece of cryptocurrency without buying the coins? An alternative is to invest in companies that offer crypto-related services or hold the coins themselves..
If you want exposure to cryptocurrency without direct risk, here are some options:
- Invest in companies with crypto technology: These include Square and PayPal, which allow users to trade cryptocurrencies on their platforms. Even big tech companies like Amazon, Google, Microsoft, IBM, and SAP use blockchain in different parts of their business.
- Find cryptocurrency funds: Some funds hold Bitcoin and other cryptocurrencies. For example, Grayscale and Osprey have created bitcoin trusts, Doug Boneparth, CFP and president of Bone Fide Wealth in New York, told CNBC. And funds with exposure to cryptocurrencies and blockchain technology include the Ark Next Generation Internet Exchange Traded Fund. Remember that funds may charge fees.
- Buy Tesla Stock. Last year, the electric vehicle maker bought $1.5 billion worth of Bitcoin and said it would soon accept it as payment, although Tesla later suspended the latter option after the CEO Elon Musk has expressed environmental concerns related to crypto.
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This article originally appeared on GOBankingRates.com: Top 3 Ways to Invest in Crypto Without Actually Buying
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