Bitcoin was one of the hottest assets in 2020, but already in 2021, it’s looking like it could have an even stronger year. The cryptocurrency has got a tonne of momentum at the moment, and HIVE Blockchain Technologies (TSXV:HIVE) stock, as well as others like it, have seen some major growth.
Tonnes of investors have been jumping on the cryptocurrency bandwagon and continue to look for ways to gain exposure to these high-potential assets.
Businesses are joining in on the momentum, too. Some are accepting Bitcoin or other cryptocurrencies as a form of payment, and some companies are even buying Bitcoin as a better store of cash long term.
Whatever way businesses or investors gain exposure to the digital coin, it’s only adding to the incredible momentum the cryptocurrency space already has.
However, if you’re looking to gain exposure, whether through HIVE stock or a Bitcoin ETF, there are a couple of things to know.
Bitcoin has been around for a little over 10 years now. Over time, as more uses have adapted to Bitcoin and other cryptocurrency projects have spun off, the use case for the revolutionary cryptocurrency has increased.
Developers have seen promising potential with blockchain technology, and there is strong demand for a decentralized monetary system that exists online. And that whole network is underpinned by the miners, like HIVE stock, which play a crucial role in the function of the blockchain.
This major increase in popularity has seen Bitcoin’s demand grow slowly over the years. It always had potential, but without mass adoption, the technology could never take off. That’s what makes the rally over the last year and a major jump in popularity so promising.
We’re already starting to see the snowball effect of more users owning Bitcoin, which attracts businesses to use and accept it, which incites more users to buy it, and so on.
Although the technology shows a lot of promise, Bitcoin and other cryptocurrencies have been speculative industries for a while. This makes the coins incredibly volatile and inherently risky.
So, it’s crucial that investors know what they are getting themselves into when making an investment and minimize risk by taking a long-term position.
There are multiple ways to gain exposure to Bitcoin. Here are some of the best investments.
HIVE and other Bitcoin stocks
The first thing you need to decide before gaining exposure to Bitcoin is how much risk you want to take on. Cryptocurrency is naturally highly volatile, so even the lowest-risk investments will still have significant volatility.
Investors who don’t mind the risk and are looking for the highest-growth potential possible should choose mining stocks like HIVE. These businesses are highly leveraged to the cryptocurrencies they mine, making them exceptional investments during these major rallies.
BitFarms is a popular stock for investors who want exposure strictly to Bitcoin, the biggest and best-known cryptocurrency.
HIVE stock, however, mines Bitcoin as well as other cryptocurrencies, which diversifies operations and reduces risk.
The other option is to buy a fund that tracks the price, such as the Purpose Bitcoin ETF. This way, you don’t have to worry about any execution risk. It’s simply an investment that Bitcoin will continue to gain in popularity and grow in price over the years.
Bitcoin continues to offer investors some of the best long-term growth potential of any asset. So, whether you want to simply gain exposure to the cryptocurrency or take on additional leverage with HIVE stock, it’s one of the top industries to invest in today.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Daniel Da Costa has no position in any of the stocks mentioned.