Bitcoin is worth trillions of dollars again. Here are 4 ways to invest in the biggest cryptocurrencies.

It seems like the cryptocurrency winter is thawing. As a result, Bitcoin (BTC 1.52%) It surpassed $50,000 per token and a market capitalization of $1 trillion for the first time since early December 2021.

The last visit by a major cryptocurrency to the trillion-dollar realm did not last long, forming the peak of a temporary bull market. Things must be different this time. Miner rewards will likely be cut in half again amid growing respect from institutional investors.

Let’s say you’re looking to dip your first toe into the crypto waters of digital assets and Bitcoin is the only name on your wishlist. There are several ways to approach your first cryptocurrency investment, and while each option may be the best idea for some people, it may be completely the wrong idea for others.

It would take a book to cover all the bases, but you have to start somewhere. Today we will guide you through the four most popular ways to invest in Bitcoin. One of them (or some combination) should suit your investment approach.

1. Buy real Bitcoin

The most obvious option is to simply buy Bitcoin or a small fraction of one coin. Purists will always prefer owning real assets rather than mirroring or packaging other people’s Bitcoin holdings. However, the most straightforward approach is not necessarily the easiest for new cryptocurrency investors.

Most stock brokerages do not support buying or selling cryptocurrencies directly. Unless you manage an inventory-based nest egg subject to one of the following exceptions: robin hood or interactive brokers, you will need to open a new account through a cryptocurrency trading service. Depending on your willingness to manage yet another money processing platform, this could be a minor hassle or transaction disruption.

There will be a moderate learning curve even for seasoned stock investors. Most Bitcoin orders are closer to a stock trader’s market order rather than a limit order. For ultra-liquid assets like Bitcoin, the difference is not as significant, but some investors argue for strict price controls with limit orders, which are not typically available in cryptocurrency trading.

Buying a few satoshis (the smallest fraction of Bitcoin you can own) may be right for you, but that’s not the only way to buy this trillion-dollar cryptocurrency.

2. Bitcoin-based ETF

The U.S. Securities and Exchange Commission (SEC) recently approved 11 exchange-traded funds (ETFs) that track the spot price of Bitcoin. When cryptocurrency prices rise or fall, ETFs do the same.

However, you can buy and sell these funds just like any other ETF or stock. Limit orders are always an option, and you probably already have a brokerage account that offers all the Bitcoin-based ETFs.

The most popular Bitcoin ETFs so far are: Grayscale Bitcoin Trust (GBTC 4.71%), iShares Bitcoin Trust (go 4.71%)and ARK 21Shares Bitcoin ​​ETF (ARKB 4.75%). Excluding various management fees, daily and minute-to-minute price fluctuations should be the same for all intents and purposes.

Grayscale ETF was the only mutual fund that owned Bitcoin before the SEC approved the ETF conversion. iShares is a leading ETF issuer supporting financial power. black stone. The ARK 21Shares fund is managed by renowned growth investor Cathie Wood and her team of analysts.

It’s very similar to trading regular stocks. The fund’s sole business is to manage a portfolio of Bitcoin tokens without any other products or services. Picking a few shares of a Bitcoin ETF should be the simplest approach for most people. Between these approaches and direct Bitcoin trading, you’ve probably already found what you’re looking for.

3. Bitcoin Miner

You can also enhance your Bitcoin investments for greater potential rewards and higher risk levels. If Bitcoin itself isn’t volatile enough to tickle your thrill-seeking spine, you might be interested in the following Bitcoin miners: Marathon Digital Holdings (Mara 14.35%) or Hut 8 Mining (hut 19.93%).

Hut 8 and Marathon both engage in Bitcoin mining, using specialized computing equipment and massive amounts of electrical power to earn Bitcoin. Their fortunes are closely tied to cryptocurrency prices, but are amplified by their constant efforts to create new tokens.

Marathon is known for its aggressive expansion and large-scale operations, primarily in Texas and North Dakota. Hut 8 focuses on operational efficiency and sustainability through its 11 mining centers scattered across Canada.

As an investment, it offers a higher level of risk and potential reward than purchasing Bitcoin directly. They have the potential for financial growth due to active Bitcoin production beyond simply owning Bitcoin. At the same time, the mining business is expensive, and investors are exposed to the risk of bankruptcy if cryptocurrency prices remain low for too long or threats such as spikes in power bills occur.

Mining stocks are not for the faint of heart. Going this route requires nerves of steel, so keep your starting position relatively small. If Bitcoin is a speculative investment, Bitcoin miners are speculative squared.

4. Stocks related to the Bitcoin market

If all the ideas so far have been too rich for your blood, you may prefer to enter the cryptocurrency sector indirectly instead. Some companies hold significant amounts of Bitcoin, while others operate in the cryptocurrency space. Investing in respected companies with strong ties to Bitcoin can reduce your digital asset risk.

It’s not a risk anymore always lower. For example, a data analytics software company MicroStrategy (MSTR 12.22%) In the fall of 2020, I converted almost all of my cash reserves to Bitcoin. Founder and Chairman Michael Saylor continues to pour more money into the company’s Bitcoin holdings, including by selling new debt and new stock for that purpose. In this case, MicroStrategy’s software business feels like a hindrance to cryptocurrency purchases.

With $9.9 billion in Bitcoin holdings and a market capitalization of $13 billion, MicroStrategy appears to be a Bitcoin miner that uses financial tools instead of computing hardware to grow its cryptocurrency holdings.

Others offer more benign Bitcoin promises. Elon Musk’s Bitcoin holdings tesla (TSLA 2.55%) It’s currently worth about $500 million, equivalent to 0.1% of the electric vehicle giant’s market capitalization of $578 billion. digital payment expert block it (S.Q. 3.74%) It offers cryptocurrency-based products such as hardware wallets and Bitcoin-based payment services, while also keeping 1% of its market value in Bitcoin.

Regardless of whether the price of Bitcoin rises or not, Tesla and Block are running successful and profitable business operations. Their cryptocurrency bet could pay off in the long run, but it doesn’t impact either company at the moment. As such, these stocks offer the calmest on-ramp to the cryptocurrency superhighway.