There are multiple ways to invest in the blockchain technology today
Nowadays, blockchain can be compared to personal computing in the 80s, the internet in the 90s, cell phones in the 2000s, or social networks and apps in the 2010s. Blockchain seems to be very promising, albeit a still not yet fully explored technology. Imagine you’d founded (or invested in) something like Apple, Google, or Facebook 20-25 years ago. Today you’d probably be a billionaire (or at least a millionaire).
People who spent several dollars on Bitcoin tokens in 2009 just to test the emerging crypto investing concept, today may be owning BTC worth hundreds of thousands USD. Some experts say that it may be too late to invest in blockchain at the same level of gains, but it is undoubtedly a good time to learn about it. The more you learn, the more reasonable your investments will be.
Before giving some investment advice, we should write a disclaimer. We are not a broker company, as well as we are not your broker or investment adviser. We are not here to tell you where to put your money. After all, you are the only one who is responsible for your money and actions. You can choose any of these options, but before you do anything, you should do a lot more reading and think twice (at least twice).
There are five ways to invest in the blockchain technology today. They are ranked from riskiest to safest.
1. Invest in altcoins and tokens
Once again, this is the riskiest way. You may find it difficult to argue with the fact that you can significantly benefit from such an investment if it works out. However, there is a similarly good chance you could lose all invested funds.
Investing in cryptocurrency, you are not investing straight in the blockchain. However, it means you invest in the practical financial application of this technology. Putting money in crypto coins (especially meme tokens) you are at risk of buying a pig in a poke. Unless you choose several most used cryptocurrencies with proven track record, e.g. Bitcoin or Ethereum, there is no guarantee you’ve purchased reliable crypto since it can be conventional pump-and-dump or a Ponzi scheme.
There is one more option, related to coins and tokens – an ICO (initial coin offering). Since there are so many new crypto tokens brought to market daily right now, it became extremely hard to determine what is real and what isn’t. It is exactly what happens with things in trend. We do not try to say that any ICO is a fraud, but you certainly should think twice before putting money into an ICO. History knows many examples when ICO was no more than a fake or a scam. Yet, if the token is a real deal and it grows in value over time, those who were on board from the very start, get maximum earning chances.
2. Invest in blockchain-related startups
Blockchain, as we have mentioned above, is a technology, not the application of technology. This changes a lot for those, who have decided to invest in blockchain. Anyway, putting money in a blосkсhаіn startup is often less risky than investing in сrурtосurrеnсу.
However, here’s the thing about blосkсhаіn startups. How are you supposed to find or even define which is a genuinely attention-worthy blосkсhаіn startup and which is a company that simply issues a token or adds blockchain to an existing product?
Blockchain companies now operate across payments, stablecoin infrastructure, decentralized finance (DeFi), asset tokenization, custody, cybersecurity, and blockchain infrastructure. Some aim to improve cross-border payments, automate financial transactions, facilitate the transfer of tokenized securities, or address technical limitations in existing blockchain networks. However, not every blockchain startup is innovative or commercially viable.
If you are thinking of investing in a blockchain startup, you likely have (extended) experience in this field. Thus, you most likely know what you are doing. Anyway, we can only recommend you to do your research and ensure that the firm is using blосkсhаіn for blockchain reasons. If a company is trying to find a solution to an existing unresolved problem, you can be sure it is doing something worthwhile. Stay away from firms and startups that try to find (or even create) a problem to which they can apply a temporary solution.
3. Invest in blockchain as a business
Today, a tendency is emerging to view not only blockchain-related startups but blockchain networks themselves as businesses. Big banks and financial institutions are increasingly offering their clients different crypto investing options. To do that and facilitate some stablecoin transactions, they need blockchain infrastructure. The same is needed to handle central bank digital currencies where governments have approved their projects. So, blockchains themselves are gaining greater roles.
One of the recent examples is WisdomTree bringing bankers and asset managers together to promote blockchain as an investable business and infrastructure opportunity, using Arbitrum as a case study. Its core message was to shift the perception of blockchain away from cryptocurrency volatility, associated with assets such as Bitcoin and Ethereum, and towards scalable business infrastructure. So, instead of investing directly in tokens, clients can gain exposure to companies providing blockchain-related infrastructure and services, including miners transitioning to AI data centres, crypto exchanges, and stablecoin issuers.
It reminds the previous option of investing in blockchain startups, but on a larger scale. The similarity is that one needs to do a thorough research before getting involved in such initiatives. Conduct due diligence and check the purpose and functionalities of the blockchain, how it works, who builds blockchain solutions on it, etc.
4. Invest in publicly traded blockchain ETFs
This option is less risky than previous ones, although it can’t be called the most profitable one. Despite the fact that this concept is relatively new in many markets, there are a number of publicly traded ETFs, which aim to track blосkсhаіn firms.
Nevertheless, as we know nothing’s perfect. The question is, how “blосkсhаіn” these ETFs really are? Some focus on companies developing blockchain infrastructure or providing digital asset services, while others include cryptocurrency miners, exchanges, semiconductor manufacturers, and traditional technology firms.
As a result, investors should examine each fund’s holdings and selection criteria rather than assume that a blockchain label guarantees direct exposure to blockchain technology. Yet, “ETFs and listed companies tied to the sector provide liquid, regulated exposure that fits existing investment policies, reporting and governance,” explained their utility Vanessa Grellet, Co-Founder and Managing Partner of Arche Capital, in a recent interview. For now, you can consider this option as reliable, but not the most profitable. It will not give you 1000% returns, but it is a price you have to pay for reduced risks.
5. Invest time in learning about blockchain
The name says everything. So what more is there to say? Time is one of the most valuable resources you have. If you disagree with this, it is your right, but we are sure that someday you’ll change your mind.
Try to learn as much as you can about blockchain, startups, investment strategies, cryptocurrency and their implementation in real life. This kind of investment doesn’t require any money or seed capital. Quite on the contrary, it requires only your time, brain, and willpower. Nevertheless, this option can be the most beneficial one. Once you have the necessary knowledge, you may spot the best blockchain investing scenarios that apply in your particular situation.
