3 Safer Ways to Invest in Bitcoin

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3 Safer Ways to Invest in Bitcoin
2. Invest through an ETF
1. Make sure you have a well-diversified portfolio
3. Consider crypto stocks

• Perhaps the safest way to invest in Bitcoin
  doesn't involve investing in Bitcoin at all, but
  instead investing in crypto stocks.
• A crypto stock is a company that is involved in
  the cryptocurrency market in some way. The key to
  investing in crypto stocks is to invest in them
  because they are solid companies -- not solely
  because they're involved in cryptocurrencies.
  Strong companies will do well over the long term
  regardless of what happens with Bitcoin. But if
  Bitcoin does turn out to be a life-changing
  investment, these stocks may experience even
  higher returns.
• Examples of crypto stocks include
• Tesla CEO Elon Musk recently announced a 1.5
  billion investment in Bitcoin, and the company
  also allows payment in the form of Bitcoin.
• Square The company allows users to offer
  cryptocurrencies, including Bitcoin, as a form of
  payment. It has also purchased more than 200
  million worth of Bitcoin since October 2020.

Investing in Bitcoin directly is possible, but it
can be a hassle. Cryptocurrencies trade
differently from regular stocks, and to invest
directly in Bitcoin, you'd need to create a
digital wallet and sign up on a cryptocurrency
exchange. This can also be a security concern
because if you lose the password to your digital
wallet, you can't access your investments. A
Bitcoin ETF would mimic the price of the
cryptocurrency, but you wouldn't be investing in
Bitcoin directly. In other words, the ETF would
make it so that you can invest in Bitcoin like
you would any other stock through a traditional
exchange. Currently, the Securities and Exchange
Commission (SEC) hasn't approved any U.S.-based
Bitcoin ETFs. However, Bitcoin ETFs do exist in
Europe and Canada, and some experts believe the
SEC will start allowing them in the U.S. within
the next year or so. If or when that happens, it
will make it easier (and safer) for Americans to
invest in Bitcoin.
No matter where you choose to invest, it's always
wise to have a well-diversified portfolio.
However, if you're considering investing in
Bitcoin, a healthy portfolio is especially
critical to limit your risk. The more diversified
your portfolio is, the less impact Bitcoin will
have on your overall investments if it takes a
turn for the worse. Aim to invest in at least 10
to 15 different stocks from multiple industries
if you're choosing to invest in individual
stocks. Or you can invest in index funds or ETFs,
which provide instant diversification because
each fund includes hundreds or even thousands of
stocks.