HFM information and reviews
Octa information and reviews
FXCC information and reviews
FxPro information and reviews
FXCM information and reviews
Vantage information and reviews

Diversify Your Portfolio with Cryptocurrencies Without Direct Ownership

Written by Sandro Pontedra  Finance Industry Expert Sandro Pontedra

The realm of cryptocurrencies, blockchain technology, Bitcoin, Ethereum, and virtual currencies has evolved dramatically over the past few years. What was once an unfamiliar lexicon to the general public has now become a significant part of the financial landscape. Investing and trading in virtual currencies are no longer niche pursuits reserved for the young and daring. Rather, it's an established and enduring facet of the financial world. In this article, we'll delve into how this transformation occurred and why cryptocurrencies are here to stay.

Instead of discussing the intricacies of trading virtual currencies or the advantages and disadvantages of their use, we'll explore how investors and traders can gain exposure to the crypto world through stock and ETF investments.

The Pandemic Fuelled Interest in Stocks and Cryptos

As the COVID-19 pandemic swept across the globe, many anticipated a stock market crisis akin to the 2008 subprime meltdown. Traders who had endured the hardships of 2008 often swore off the stock market, unable to revisit it due to their past losses. However, an intriguing turn of events unfolded when the coronavirus pandemic struck. Rather than fleeing from the stock market, many individuals, often lacking substantial trading experience, flocked to it. The crisis was seen as an opportunity by newcomers, who observed major, well-established companies' stock prices plummeting. To them, it seemed like the ideal moment to join the stock market and seek significant gains. Consequently, a vast portion of the public became exposed to the world of blockchain and virtual currencies.

The Synchronization of Stocks and Cryptos

One crucial factor endorsing the permanence of cryptocurrencies is their integration into the global stock indices (such as SPY and QQQ). The two primary beneficiaries of this integration are Bitcoin (BTC/USD) and Ethereum (ETH/USD). Over the past two years, these cryptocurrencies have exhibited a strong correlation with stock market events. This shift contrasts with the early days of Bitcoin when its price movements remained largely isolated from global market sentiments. Previously, Bitcoin could surge while global indices dipped, and vice versa. The fact that Bitcoin now responds to stock market dynamics aligns with the recognition of virtual currencies as commodities and suggests possible institutional adoption.

Furthermore, the emergence of various ETFs, like GBTC (Grayscale Bitcoin Trust), has facilitated Bitcoin investments. While GBTC is a publicly traded Bitcoin fund, it's not a direct investment in Bitcoin and can exhibit varying price movements compared to Bitcoin itself (BTC/USD vs. GBTC).

Simplified Exposure to Cryptos

Investing in cryptocurrencies directly, particularly Bitcoin, can be challenging for newcomers. Setting up a digital wallet, securely storing the wallet's password, and handling tax reporting and banking transactions can become formidable tasks. To overcome these hurdles and gain exposure to the crypto world, investors can consider trading stocks directly tied to cryptocurrency price movements. A plethora of publicly traded companies with connections to the crypto market exists, offering a more accessible entry point. These companies engage in Bitcoin mining services, payment solutions with Bitcoin, cryptocurrency exchanges, or allocate a significant portion of their capital to cryptocurrencies.

Researching which publicly traded companies are engaged in cryptocurrencies falls on the investors' shoulders. A simple online search will reveal a multitude of companies traded on U.S. stock markets that have ventured into the crypto sphere. By purchasing these stocks and ETFs, investors can indirectly invest or trade in virtual currencies, a strategy that many traders worldwide have already embraced.

It's worth noting that cryptocurrency-related stocks may experience significant gaps due to the 24/7 nature of cryptocurrency markets compared to traditional stock market hours. Price fluctuations during the weekend can lead to substantial gaps in cryptocurrency-related stocks when trading resumes on Monday.

Navigating the Crypto Universe

The world of cryptocurrencies is vast and continually evolving, with no end in sight to its expansion. Price movements in this realm are highly unpredictable and notoriously volatile. However, the integration of cryptocurrencies into mainstream financial markets and the availability of cryptocurrency-related stocks and ETFs provide a means for traditional investors and traders to diversify their portfolios and participate in this exciting and ever-changing space.

In conclusion, cryptocurrencies have transitioned from obscurity to mainstream acceptance, and their impact on the financial landscape is undeniable. Investors and traders now have the opportunity to engage with this asset class through traditional financial instruments, offering exposure to the crypto universe without the complexities of direct ownership. As the crypto journey unfolds, it's certain that the space will continue to captivate the world's attention with its limitless potential and inherent volatility.

Share: Tweet this or Share on Facebook


Soulbound Tokens (SBTs): Pioneering Digital Identity in the Blockchain Era
Soulbound Tokens (SBTs): Pioneering Digital Identity in the Blockchain Era

Soulbound tokens (SBTs) represent a groundbreaking concept in blockchain technology, championed by Ethereum co-founder Vitalik Buterin and inspired by mechanics from the popular fantasy game...

HF Markets Enhances Its HFcopy Trading Platform for Enhanced Trading Synergy
HF Markets Enhances Its HFcopy Trading Platform for Enhanced Trading Synergy

HF Markets has announced significant upgrades to its HFcopy program, catering to both Strategy Providers (SPs) and Followers, thereby solidifying its position as a premier copy trading platform...

Navigating the Exciting Challenge of Trading Over 150 Stocks with ModMount
Navigating the Exciting Challenge of Trading Over 150 Stocks with ModMount

ModMount presents traders with the exhilarating opportunity to dive into one of the largest and most dynamic online markets – the stock market. This platform challenges traders, whether novice or seasoned...

Understanding Buy and Sell Walls in Crypto Trading
Understanding Buy and Sell Walls in Crypto Trading

The world of cryptocurrency trading is a dynamic and ever-evolving landscape. As investors and traders navigate this digital frontier, they encounter both promising opportunities and formidable obstacles...

Unlocking the Potential of Asset-Backed Cryptocurrencies: An In-Depth Exploration
Unlocking the Potential of Asset-Backed Cryptocurrencies: An In-Depth Exploration

Imagine blending age-old investment wisdom with the groundbreaking digital currency sphere. The infusion of the US dollar into blockchain technology, or endowing cryptocurrencies...

The Dynamics of Commodity Trading: An In-depth Look
The Dynamics of Commodity Trading: An In-depth Look

From the very clothes on your back to the coffee you sipped this morning, commodities influence our daily lives. This vast market encompasses a wide variety of goods...

Editors' Picks

MultiBank Group information and reviews
MultiBank Group
FP Markets information and reviews
FP Markets
XM information and reviews
Just2Trade information and reviews
AMarkets information and reviews
IronFX information and reviews

© 2006-2023 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.