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Ruth Kise 23 Aug 2023 ◦ 5 min read

Blockchain Companies and Stocks: Traditional Finance in the Crypto World

Blockchain Companies and Stocks: Traditional Finance in the Crypto World

2022 is in full swing, and it is already clear to everyone that the cryptocurrency world is alive, will live, and, in general, is still developing. Time has shown that the crypt market is growing, pushing the idea as well as attracting large funds. But how to put your own skin into the game, and where to start to earn money — is still difficult to figure out for many. Actually, there are no clear answers on where you can earn and how to advance (and of course, we don’t give financial or investment advice!), but we tried to convey some information in a concentrated and understandable way.

Direct Investing in Cryptocurrency

One of the most common and understandable strategies for interacting with cryptocurrency includes the purchase and storage of spot cryptocurrency assets. To do this, users can use centralized or decentralized exchanges, but in any case, you will have to go through the exchange of crypto for fiat money and back. Therefore, it is important to monitor the current regulation.

However, if you do not like buying coins, but the crypto world still attracts you, then there are other ways to join the conversation.

Investing in Cryptocurrency Infrastructure

Mark Twain said it best: "During the gold rush, it's a good time to be in the pick and shovel business". In this case, indirect and direct investment is similarly possible.

Direct investments in infrastructure are mining, investing in the creation of trading platforms (crypto exchanges), as well as services and technologies around them. Such investments should be considered long-term, strategic investments.

Investing in publicly traded stocks of the basic technology needed to create a crypto service is also a way to enter the market, especially if you don't want to worry about specific tokens. The Web 3 concept is attracting more and more large investors, so the value of companies whose activities are aimed at developing infrastructure is growing. There are many options for investing here, and you can start with your own vision of the development of the crypto world.

For example, if you are a proponent of the idea of crypto flow regulation and believe that the future lies with centralized exchanges, then the assets of Coinbase, the largest cryptocurrency exchange in the United States by trading volume, are traded publicly on the NASDAQ exchange. The platform held an IPO in April 2021 and its COIN shares are openly traded.

If you are interested in the blockchain technologies themselves, then the next option is the shares of ConsenSys, Ethereum blockchain software technology company. Let's recall that ConsenSys, which was valued at $3.2 billion in the last round of funding in November, joins a growing list of crypto companies whose estimates have jumped in recent months due to an explosion of interest in Web3.

Investing in Companies with Cryptocurrency Assets

Alternatively, you can use indirect investment strategies. Since some publicly traded companies have cryptocurrency assets, it is possible to buy publicly traded stocks of these companies, thereby taking advantage of cryptocurrency without necessarily owning it.

For example, MicroStrategy is a company engaged in the development of software and mobile applications. In August 2020, MicroStrategy invested $250 million in Bitcoin as a reserve asset. Later, the company made several more additional large purchases of Bitcoin, totaling more than $2 billion. After Bitcoin's price fell to about $20,800 in June 2022, the company said it had not received a margin call and that it had enough capital to withstand further volatility.

Also, you can turn your attention to Block (Square Inc until 2021), an American technology company that develops solutions for accepting and processing electronic payments. In October 2020, the company placed about 1% of its total assets ($50 million) in Bitcoin (4,709 bitcoins), citing Bitcoin's "potential to become a more ubiquitous currency in the future" as the main reason. In February 2021, the company acquired another $170 million in Bitcoin (roughly 3,318 bitcoins), bringing Square's total assets to nearly $500 million in BTC (roughly 8,027 BTC in total).

On December 1, 2021, Square announced its rebranding: the company was named Block. The new name is associated with the desire to reflect the growth of the company in the field of blockchain technology.

Investing in a Cryptocurrency ETF

Cryptocurrency ETFs are gradually being implemented, providing ETF shareholders with the possibility of indirect investments in cryptocurrency. For example, ProShares has launched a BITO — a bitcoin ETF that does not directly invest in bitcoin. Instead, it is based on futures contracts tied to the asset. The BITO ETF allows users to invest directly from their brokerage accounts instead of opening a wallet.

Copy Trading: Passive Investing

Next, we want to mention another way to increase capital copying. The essence of the method is to copy the transactions of another trader. This means that many small or not very experienced traders willingly invest in new projects supported by the industry's largest and most successful investors. This way you can start trading in stock markets, even without knowledge of how it all works. You can choose a "role model" on a special platform using filters, or seek help from Quantum AI artificial intelligence, which analyzes the market and offers the best deal options.

P.S. Goes Without Saying — But Don't Get Scammed

Attention! No matter which way of earning money you choose, always double-check the platforms on which you plan to earn extra money. Sites must be reliable and, all about, genuine!

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