Forget Bitcoin: Invest in Cryptocurrency Without Buying It

Interested in cryptocurrency but don’t want to pay $60,000 for Bitcoin? There are certainly other options for more cash and less risk.

cryptocurrency, crypto, blockcahin

Image source: Getty Images

It looks like Bitcoin may finally be making a recovery in Canada. After five months of trading lower and lower, Bitcoin finally started moving in an upwards direction this week. It’s been a crazy year for cryptocurrency. Bitcoin alone climbed 460% between October and mid-April. Then it fell from April to July by 15%.

But today, there’s an outbreak among cryptocurrencies, including Bitcoin. Since July, Bitcoin is up a whopping 83% to prices not seen since last April.

So should you invest in Bitcoin?

Well, all that volatility should tell you one thing: that Bitcoin is volatile right now. While cryptocurrency may be the future, it still has a lot of work and convincing to do. It’s a hacker’s dream right now, but also an investor’s dream.

That said, there are other ways to invest in cryptocurrency and Bitcoin without actually investing in it firsthand.

Invest in the infrastructure instead

One option is to invest in companies that support the cryptocurrency boom. This would include companies like HIVE (TSXV:HIVE)(NASDAQ:HVBT). Hive stock mines cryptocurrency using its massive data centres and has been acquiring further data centres to get this done.

Think of Hive stock as a difference between the old miners of the gold rush versus a massive company. You could certainly sift for gold, spending your savings to get to the mine and stay there for months on end. Or you could invest in a company with backing and the methods available to dig for gold on a massive scale.

The latter is Hive stock. It’s in the 21st century’s version of the gold rush, mining Bitcoin and other cryptocurrencies at an alarming rate.

Invest in companies that are already investing

If you want to invest more directly in cryptocurrency, find companies that are already doing it for you. For example, you can look at a company’s balance sheet to see where its investments lie. Now, this can include exchange-traded funds (ETFs) of course.

In fact, there are several cryptocurrency ETFs, such as Purpose Bitcoin ETF (TSX:BTCC.B) that invests directly in Bitcoin. Investing in Purpose is like getting a piece of the Bitcoin pie but at a lower cost. Whereas Bitcoin trades for $69,326 at writing, Purpose trades at just $9.58. Yet any price movement is directly linked to Bitcoin.

Want a bit more exposure and less risk? Go with companies that invest in Bitcoin and cryptocurrency, but other things as well.

Shopify (TSX:SHOP)(NYSE:SHOP), for example, started accepting cryptocurrency as an option for its clients last year. So Shopify stock most likely invests in cryptocurrency as well. With its short-term investments doing so well, this creates a significant revenue stream for Shopify stock. One that investors will want to pay attention to is the company’s earnings after its earnings report.

Therefore, by investing in Shopify stock, for example, you get the best of both worlds. Choose a company that’s investing in cryptocurrency for you, but will sell it if it gets too risky based on its financial experts’ opinions. So it does all the heavy lifting.

If you want even less risk, Royal Bank of Canada (TSX:RY)(NYSE:RY) is already looking to launch a cryptocurrency platform. So really only a matter of time.

Foolish takeaway

Bitcoin is an opportunity. But whether that’s an opportunity to make a lot of money or lose a lot of money is up to you. Whether it’s investing straight in Bitcoin, or through an adjacent business, there are certainly options to get in on the action in a safe and effective way.

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 ROYAL BANK OF CANADA and Shopify. The Motley Fool owns shares of and recommends Shopify. The Motley Fool recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify.

More on Investing

A cannabis plant grows.
Cannabis Stocks

Canopy Growth Stock Is Rising But I’m Worried About This One Thing

Canopy Growth stock is soaring as the legalization effort makes real progress in both Germany and the United States.

Read more »

young woman celebrating a victory while working with mobile phone in the office
Investing

3 Roaring Stocks to Hold for the Next 20 Years

These top TSX stocks are excellent long-term buys, given their multi-year growth potential and solid underlying businesses.

Read more »

Two seniors float in a pool.
Dividend Stocks

TFSA: How to Earn $1,890 in Annual Tax-Free Income

Plunk these investments into your TFSA to earn passive income and avoid the taxman.

Read more »

grow dividends
Investing

Here’s My Top 3 TSX Stocks to Buy Right Now

Even though the TSX has been rising, there are still some good bargains out there. Here are three top compounding…

Read more »

Target. Stand out from the crowd
Investing

Prediction: This Canadian Growth Stock Could Double by 2030

Alimentation Couche-Tard (TSX:ATD) is a top growth stock that could do well over the next six or so years.

Read more »

Businessman holding AI cloud
Tech Stocks

Could Investing $20,000 in Nvidia Make You a Millionaire?

Nvidia stock has made investors millionaires in the last 10 years. Is it too late to invest to become a…

Read more »

Engineers walk through a facility.
Dividend Stocks

1 TSX Stock I Wouldn’t Touch With a 10-Foot Pole

AtkinsRéalis (TSX:ATRL) is one TSX stock I'd never invest in.

Read more »

money cash dividends
Stocks for Beginners

Have $500? 3 Absurdly Cheap Stocks Long-Term Investors Should Buy Right Now

If you're looking for cheap stocks, these three have a huge future ahead of them, all while costing far less…

Read more »