How to invest in blockchain technology
If there are some top digital trends in the world of business, finance, and various other industries, they’ve got to be distributed ledger technology (DLT) and blockchain. Ever since they have been introduced into the traditional financial systems, cryptocurrencies have gained more attention. As a result, new opportunities, investment options, and sectors have opened upbringing new business models to the picture. With emerging businesses making the most of these latest advancements, certain government processes, e-commerce operations, and data security are all set to get even better.
Maodong Xu suggests that if you’re keen on getting onto the blockchain technology bandwagon to further your investments, keep two areas in your mind: cryptocurrencies and the businesses involved.. These could be a business dedicated to developing new crypto-related products or one that is involved in mining cryptocurrency and adding them to the distributed ledger of blockchains.
Do make note of the fact that while a blockchain itself is a distributed ledger, distributed ledgers are not blockchains.
Ways to invest in the blockchain:
- You can choose to invest in cryptocurrencies by directly purchasing crypto tokens. In this way, you take full or part ownership of a token such as Bitcoin, Shiba Inu, Ethereum, etc. Alternatively, you could also buy crypto trust shares. Curious about cryptocurrency investments? Learn all about it here. (link to website)
- Blockchain technology is a constant work in progress. It is relatively new and remarkably different as well as risky. Hence, if your risk appetite is low, you may prefer to invest indirectly in cryptocurrency. You can do so by investing in the stocks of organizations that operate on blockchain technology. To place a safer bet, ensure that the company you put your money on is reputed and well-established.
- If you do not want to get into the trouble of picking individual crypto companies to invest in, you can consider buying exchange-traded funds or ETFs. These invest particularly in the shares of the companies that provide or have exposure to blockchain technology. Compared to the direct market of cryptocurrencies where you can buy and sell crypto, the ETF market is relatively less populated and still has niche takers. Another important factor is that there are not a lot of companies that exclusively operate on blockchains hence there is a possibility of an overlap with other ETFs.
- Be an active member of crowdfunding initiatives for new cryptocurrencies via initial coin offering (ICO) –buy the new token that a developer issues as a result of working on a fresh blockchain project.
- If you can stomach risks, go for a penny stock in the blockchain. It is a dreadful ballgame with high risks but can bring good returns.
Blockchain technology is a gamechanger that can improve security, safeguard asset value, and store data blocks of digital currency. Putting your money on blockchain technology may not necessarily be the same as investing in any cryptocurrency. There are numerous available options like the ones listed above where you can invest and grow your money.