Cryptocurrency has become the one to beat in 2021. With major investors like Elon Musk backing the use, and trading platforms like Coinbase expected to be worth than most major banks in North America, it’s clear why.
But this new industry doesn’t come without risk. So for investors that are curious about getting in on cryptocurrency, but want to keep risks at a healthy level, if not at a minimum, there are some strong options that will grow your money faster.
If you’ve looked up cryptocurrency prices lately, you’ll quickly discover the price is out of most people’s budgets. However, the TSX offers all of the world’s Bitcoin exchange-traded funds. Investors can pick up Purpose Bitcoin ETF, Evolve Bitcoin ETF and the CI Galaxy Bitcoin ETF today at a price that’s easier to swallow. Shares trade at about $11.50, $27 and $10.50 respectively.
This is a much safer – and frankly easier – option for those wanting to get in on cryptocurrency. The ETF is managed by professionals, responsible for storing Bitcoin holdings safely, and using cybersecurity that protects from any attacks. You can also use these in your Tax-Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP). This means your exposure to taxes on capital gains is down to a minimum if not zero!
Make money faster
Now that you’ve got the sexy option, investors should then look into stocks that can produce cash way sooner than Bitcoin. I mean literal cash, in the form of dividends. While you could see significant returns from a Bitcoin investment, you will see cash dividends when you invest properly.
Let’s say you invested in a dividend favourite like Enbridge Inc. (TSX:ENB)(NYSE:ENB). The company has a solid dividend yield of 7.13% as of writing. It’s backed by decades of long-term contracts that will continue to see dividends come in. It’s also see dividends rise at a compound annual growth rate (CAGR) of 14.32% over the last decade!
The company is also in the rebounding oil and gas sector. So arguably, with a significant investment you may see returns far beyond anything you get from a Bitcoin ETF. But what’s better, is that with a Bitcoin ETF and Enbridge stock in tow, you have exposure to two emerging industries that should continue to soar in the years to come.
In fact, let’s say we see similar trends in the future with both Purpose Bitcoin ETF and Enbridge. Over the next decade, a $25,000 investment in Purpose Bitcoin could bring in a total of $684,853.26 in 20 years if we continue to see similar share growth! However, by investing $25,000 in Enbridge and reinvesting dividends, investors could have $1,476,900.16! And that’s with proven share growth of 12.55% compound annual growth rate (CAGR) over the last two decades. So which would you choose?
Bitcoin will definitely make a lot of people rich, but investors need to be careful. Get-rich-quick schemes may just pan out to be just that: schemes. So while it’s exciting, definitely have other strong companies in your arsenal that can see practically guaranteed income over the next few decades.
And don't stop with only two stocks, make sure to find other Motley Fool favourites to load up your portfolio!
There’s a dark horse Canadian company that has produced 3 TIMES the number of vehicles as Tesla, yet its stock trades for roughly 25x LESS!
We’re convinced this under-the-radar Canadian disruptor that’s less than 5% the size of Tesla could be one of the best growth stocks of 2021 and beyond.
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 Amy Legate-Wolfe owns shares of ENBRIDGE INC. The Motley Fool owns shares of and recommends Enbridge.