How To Invest In Crypto Stock Market (The Next Big Thing)

Last updated on December 9th, 2024 at 10:29 am

7 Famous Crypto Mistakes Traders Need To Avoid.Do you want to know how to invest in crypto stock market and how it can impact your financial lifestyle in 2024? Then, you’re at the right place to learn everything about the crypto stock market and the opportunities that lie ahead for you in a fast-growing industry that continues to surprise experts.

Impact of Crypto Stock Market

In the year 2023, it was all about AI (artificial intelligence) and how it will shape our lifestyles. This had an effect on the crypto industry too, as high interest rates continue to affect capital and flow of stable accounts, which has left cryptocurrency seem like a worse investment.

Furthermore, in November 2022, the price of Bitcoin, a leading digital asset in the crypto industry tanked below $16,500. This was one of the tough times in the industry, as the Federal Reserve was pumping up interest rates by an outrageous 75-point hike apiece. At the time, cryptocurrency was adversely affected by the declaration of FTX bankruptcy. Although most firms are also victims of bankruptcy, FTX liquidation was a major influence in the industry.

Although the crash of FTX is a thing of the past, its effect can still be felt in the crypto industry. In 2023, Bitcoin gained over 151% in the market with a price of $57,651. A lot of factors are the reason for this growth, such as easing in financial conditions and NASDAQ indexes. Lower interest rates will always fuel alternative assets for high returns.

The nature of Bitcoin price is volatile because it’s a reflection of market sentiment. That means it appreciated when investors are optimistic and this is caused by the emerging adoption and regulatory policies. The innovation of exchange-traded funds (ETF) can improve access to crypto through the stock market. It’s estimated that a whopping sum of $3 million could be approved by SEC to flow into the exchange-traded funds and then increased it to $55 million in the next five years.

How To Invest In Cryptocurrency Stocks

Cryptocurrency varies depending on the choice of the investors. This means investors have many options to choose from. It’s advisable that investors be cautious considering the volatile nature of the industry.

1. Purchase of Stock From Top Crypto Firms

Buying stocks in major cryptocurrency companies can provide exposure to investors without owning any crypto assets. This is like investing in publicly traded companies that are directly involved in the crypto industry. They’re companies that fit these descriptions and are namely:

• Crypto Exchanges: these are digital platforms for the buying and selling of crypto assets and derivatives. Although Coinbase has made its shares available to the public in 2021.
• Mining Companies: these are enterprises that generate income through the mining of new cryptocurrency. That’s why many mining companies are publicly traded with Riot platform, marathon digital holding, and Hut 8 mining.
• Mining Hardware: this is the process of solving complex mathematical problems to collect coins and tokens. Miners need hardware to get the job done and if possible, invest in companies that manufacture specialized hardware for crypto miners.

2. Purchase of Stocks From Publicly Traded Companies

Purchasing stocks from publicly traded companies that hold lots of crypto can offer indirect exposure to buying crypto shares in the company. However, the shares of companies with large crypto holdings are likely to be the same with cryptocurrency prices. Here are some publicly traded companies.

• Block (SQ): Block is a financial technology company that allows business owners and consumers to send and receive payments. Block supports Square and Cash App.
• MicroStrategy (MSTR): this is an analytic platform for businesses in cryptocurrency with over 135,500 Bitcoin holdings as of 2022. MicroStrategy uses a balance sheet to invest in Bitcoin as the financial driver and marketing strategy.
• Tesla (TSLA): it’s an electric automobile company that provides balance sheet exposure to cryptocurrency. The company owned enough Bitcoin to take an impairment loss of $204 million.

3. Investing in Blockchain Affiliated Companies

Investing in companies that use Blockchain technology can be a way to gain investment exposure to cryptocurrency. Blockchain technology can be important to the fast-evolving world of decentralized technology. Here are some of the ways investors are leveraging Blockchain technology across diverse industries.

• Technology: many companies seem to be using Blockchain-based solutions to expand their companies. IBM, a leading technology company, is offering Blockchain-based services to businesses, and also NVIDIA has developed a blockchain-based gaming platform.
• E-commerce: companies in the e-commerce industry are adopting Blockchain technology for seamless and transparent transactions. For instance, Amazon are providing Blockchain solutions for Amazon Web Services and Alibaba offers Blockchain as a service infrastructure to support product traceability, supply chain finance, and data sharing.
• Banking: The banking institutions are maximizing financial technology to enhance seamless user experience. For instance, JPMorgan Chase adopted the blockchain technology to execute cross-border trading.

4. Purchase of Publicly Traded Crypto Funds

The purchase of shares in publicly traded cryptocurrency funds that are sponsored by renowned institutions with pedigree. Here are some examples of publicly traded funds:

• Exchange Traded Funds: These are funds managed as stocks or liquidated assets. A crypto ETF may own cryptocurrency directly through Fidelity Advantage Bitcoin ETF or Invesco Galaxy Bitcoin ETF.
• Mutual Funds: these are managed funds that are sourced from a specific strategy or theme. A crypto mutual fund can hold cryptocurrency directly through investing in cryptocurrency or publicly traded crypto stocks.

Why You Should Invest in Crypto Before It’s Too Late

1. High Growth Potential
   Cryptocurrencies like Bitcoin and Ethereum have shown significant long-term returns, with adoption and institutional investments driving future opportunities.

2. Hedge Against Inflation
   With a fixed supply, cryptocurrencies can protect against currency devaluation, offering needed stability during economic uncertainty.

3. Expanding Use Cases
   Innovations such as DeFi, NFTs, and blockchain applications in various industries are creating diverse opportunities for investors.

4. Global Accessibility
   Crypto markets are open 24/7, allowing anyone to invest and trade without traditional barriers like high capital requirements.

Conclusion

Investors are encouraged to seek the advice of a financial advisor before making decisions. For instance, in 2005 those who invested $1000 in the Nvidia company gained $780,654 but this can’t be said of those investing now. That’s why investors need advisors for regular updates and guidance to build their portfolios.