Investing In Bitcoin Without Buying Bitcoin
Hey Jessatoshis
The Bitcoin market continues to expand, and while traditional finance continues to ignore it and the crypto market seeing it as something that needs to be innovated away from, the fact is it continues regardless. We are now passing through our 3rd post halving bull run, and as each bull run sucks in more capital and creates a frenzy, it also creates new paths towards Bitcoin.
Things have seriously changed since the last halving, never mind the previous one, and our opportunities to invest in Bitcoin continues to grow. For some like myself, you still believe the asset is the best place to bet on the growth of Bitcoin, but for others, they may want to look at other Bitcoin adjacent investments.
Either to diversify their holdings or to try and get Bitcoin exposure without having to hold the asset.
Mining operations
In previous years it was still feasible to invest in your own mining rig and join a mining pool. Still, as the industry grew and became more competitive, that opportunity moved towards more industrial operations. Bitcoin mining is now concentrated in places where there's cheap energy, renewable energy, waste energy or conditions that allow you to conserve energy.
As the industry becomes more robust and business starts to get involved, there is an opportunity to ivnest. As people invested in Gold miners to get access to the future returns of that gold, so too can you invest in Bitcoin mining operations.
As with gold operations, Bitcoin mining operations carry risk, and managing your expenses and balancing when to sell to secure more capital is a delicate process.
There are also options like the Blockstream Mining Note which is an STO that allows you to buy a certain amount of hash power, that hash power will eventually be paid back to you in Bitcoin.
Private equity
As more companies look to Bitcoin as the new financial system, they're building platforms, services and products around it. These companies range from Neo banks, exchanges, dapps and wallet providers, for example. You could capitalise on their growth by investing in Bitcoin-based companies while still small and undervalued should Bitcoin become a world reserve currency.
Public equity
Crypto is moving out of its primordial ooze phase, and the Coinbase direct listing was proof of that. They may be one of the first, but they surely won't be one of the last crypto companies to list on a stock exchange. You could secure their shares and enjoy the price appreciation overtime or the dividends they may be paying.
Besides, you could grab stocks in Bitcoin-friendly companies like Microstrategy, Square, Tesla or PayPal.
ETFs and paper Bitcoin
For those who don't want to spin up wallets, hold their own keys or deal with exchanges and their possible liquidity issues, there are now paper Bitcoin products you can look into, like the GrayScale Bitcoin Trust or Skybridges Bitcoin fund. We've also seen a Canadian and Brazilian ETF which means you can start to own this in your personally managed funds.
Bitcoin investing is coming for you
Whether you like it or not, the asset has performed remarkably well under these conditions, and more investors are FOMO'ing in and capitulating. As products like the ones I mention above continue to grow in popularity, we will only see an improvement in Bitcoin services and products, making the ecosystem that much better.
Have your say
What do you good people of HIVE think?
So have at it, my Jessies! If you don't have something to comment, "I am a Jessie."
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There are a lot of options these days to choose from. Pick the one that suits you.
Mining is difficult one. I remember a few years ago when there were posts everywhere about a mining rig etc. but not any more.
Coinbase surely leading the way and other companies will join the them soon.
Yeah I think 2015 or so was still the last of the retail mining crowd and then there was the cloud mining services ane a few of them being scams lol
I imagine plenty of Bitcoin infrastructure plays will go public mostly the exchanges and then later other companies but I don’t see much value in hodling that
Until Bitcoin yields slow down to below what these markets can give us I’m not really interested
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I don't know about putting my trust into those companies. I think I tried the free service Exabit and it was a scam. I didn't lose any money but I guess they have one of the more temporary emails I use.
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These options are more for traditional investors and people who want to get exposure in asset classes they understand! Holding the bearer asset is still the best bet for me and where I focus
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I think if you're starting out, using methods that are a little more familiar to traditional finance will feel more comfortable then you can really own the asset once you have dipped your toes in. Probably not a bad call to have a mixture of all but as we know, not your keys...
Yeah I think the whole custody your own coins is a normie nightmare and they want exposure but with training wheels, a gum guard and a ball box
What do you think of my first collection of all my Bitcoin writings? If you have Bitcoin posts, you want to submit, pop them in the comments and ill add them to the collection
I like that a lot! I'll be sure to send some of my BTC posts later on
grayscale has been a fucking pain in the ass, but i had diamond hands last week and even bought more, up big from the depths of friday morning. it still kinda scares me (GDLC), but not good choices for my IRA/retirement money right now, need crypto ETFs ... or something else, like could potentially transfer a lot to a crypto retirement fund.
I saw GBTC is trading below NAV so picking it up even with the fees is a no-brainer to those who can qualify to buy it now and want to get in. I think it will change its structure later once ETFs are available so I still think it's an okay solution for the short term.
As more and more large companies enter into the space, it will be interesting to see the number of people who say they would never invest in cryptocurrency, but actually are because their traditional investments have entered the space. I think it is important for everyone who is managing their own portfolio to branch out a little bit.
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I think so too, but I am happy to be late to these markets and wait for them to mature; for me I think there's still a way to go with Bitcoin, so I am going to keep riding those yields until it gets to a point where the yearly return doesn't look as good as some of these other Bitcoin adjacent investments
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That makes sense!
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yeah you can invest indirectly but then really indirectly in bitcoin by investing in coinbase stock. I haven't done that yet, but I definitely see it as a good alternative in a bear market.
that sounds like a good plan, I hope they tokenise their stokes and make it available on their exchanges so you can directly buy without having to switch out from crypto to fiat to stocks, that's going to be a pain
Binance is already trading TSLA and I think Bittrex also has stonks so I can't see why Coinbase can't be listed on other exchanges as a tokenised STONK
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yes thats a good thought they have to do it its a crypto company otherwise i will not take them serious hahaha.. so true
Can't keep Bitcoin down. Not with the adoption its getting these days. Poor weak hands who got shaken out.
LOL i feel nothing for those who sold me their Bitcoin cheap, only thanks for letting me take the Bitcoin off their hands and for the rest who I will provide the floor for, always happy to give unwanted sats a hope
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I feel every investment in Bitcoin is worth it in the long term. For short term, it might retrace and fall but in the long-term say five years, it will definitely be a worthy investment.
I see Bitcoin as investing in yourself, you go out and generate productivity in the world and people pay you for your services and Labour and then you put that into Bitcoin because you don’t need to use that value now but want to use it later
Bitcoin is just a reflection of your contribution to society
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I remember when I first heard about Bitcoin. All my friends and family said that it is a mistake. I don't understand why the "traditional financial world" is distancing itself from it. Maybe fear of something new?
The possibility of investing in Bitcoin mining operations later, never crossed my mind. Is really a good idea. In particular, you should invest in bitcoin-based companies. The advantage is that YOU profit from it and support the companies at the same time.
Very good article!!!
I like your writing style.
Keep it up :)