Probably the simplest way to invest in blockchain technology is to buy shares in a publicly-traded company that’s trading blockchain or building a blockchain solution. After all, who hasn’t already heard about Bitcoin, right? Along with Bitcoin goes blockchain, the database technology on which the entire cryptocurrency world rests.
Think of blockchain as an electronic ledger. You can enter data into it, however, you cannot alter or erase it, which shows the integrity and transparency of such technology. Since 2009 when the first Bitcoin made its debut, numerous blockchains and platforms have emerged. One of the examples is Ethereum, which combines more centralized platforms and networks in a decentralized environment.
That’s why investing in blockchain technology has become one of the hottest topics in the last few years. Luckily, if you’re eager to learn how to invest in blockchain, make sure you read this article all the way through.
Investing in Blockchain
So, why should one invest in blockchain in the first place? Well, this technology is a pretty obvious enhancement of trust, transparency, and also efficiency that is transforming blockchain technology into a very appealing investment prospect. This means that many companies and organizations around the globe are already making the most of this technology and monetizing it is a smart move for making money.
The reason why many investors are interested in companies that are delivering the most in blockchain services is knowing that blockchain will make these companies more profitable. This will also raise their stock shares and consequently, portfolios of investors who invested in them early enough.
Keep in mind, however, that these companies don’t have to be tech players. A blockchain investment can involve investment in organizations that work with cryptocurrency and that have invested in cryptocurrency.
How to Invest In Blockchain Technology
As already mentioned, the easiest way is to buy shares in a publicly-traded company that uses or builds blockchain technology, or at least invests in crypto. There is an endless list of company names that are either using or working with blockchain technology, such as IBM; Amazon, Intel, AMD, Mastercard, DocuSign, JP Morgan. Besides the general companies investing in blockchain, there are also crypto-related ones such as Square, PayPal, MicroStrategy, Overstock, and many more.
When talking about these companies, another thing you will need to keep in mind is the enterprise blockchain solutions. Companies like JP Morgan, Facebook, and Walmart are just some of the companies that are tackling enterprise blockchains and understanding how they can be leveraged to increase transparency and optimize the company’s business operations.
You don’t have to buy individual stocks if you’re looking to gain exposure to blockchain, as there is another way as well. Some funds offer exposure to blockchain technology, and they are grouped along the lines of traditional funds. If you’re keen on diversification, you might have a portfolio of assets, mutual funds, and exchange-traded funds to invest with less risk at a lower cost.
When it comes to blockchain, there are many blockchain ETFs available to invest in companies and organizations that work with blockchain technology. If that’s something you might be interested in, consider investing in one of the biggest ones, such as Amplify Transformational Data Sharing ETF, Reality Shares Nasdaq NexGen Economy ETF, First Trust Indxx Innovative Transaction & Process ETF, or Goldman Sachs Finance Reimagined ETF.
Blockchain Investing Tips
Make sure you do your due diligence. Many companies will say they are involved in blockchain, but not everyone will know how to make the most of it. That’s why you must research the company before investing in it. The same goes for top blockchain startups. They might have perfect marketing and you will assume they know what they are doing, but a few months or even years after you’ve made your investment, the company will come short with providing results.
Before investing, think about several factors that will be handy when it comes to blockchain: an opportunity for growth, differentiating factors relative to the company’s other projects, and the competitive environment. Never forget that although blockchain is a high-growth sector, it’s also high-risk. For those who are only starting in the investment world, the wise thing to do would be to invest a small portion of your capital in blockchain companies and diversity in several areas.