Cryptocurrency investment strategy 3 – Buy crypto stocks

This crypto investment strategy doesn’t involve buying cryptocurrencies. It’s focusing on companies, that will benefit from either cryptocurrencies or blockchain technology and ideas. You can this way avoid some of the volatility that surrounds cryptocurrencies, whilst still profiting from this segment of the market. The idea of this strategy is

to buy stocks of companies that are directly or indirectly involved in cryptocurrencies, blockchain or similar technology. They don’t have to be specifically a blockchain company – it’s enough if some of their services or products are somehow connected to this part of the market and can profit from the growth of blockchain or crypto-assets.

Investment strategy number 3 in short: Don’t buy cryptocurrencies. Buy stocks of companies that can benefit from the growth in interest and success of blockchain and related technologies.

 

Some companies that fit this description:

A good place to find more blockchain related stocks is Seeking Alpha or Stocktwits – just follow the talk around some of these  and you’ll soon read about others.

Make sure you don’t just buy these because they do something with blockchain or bitcoin. Research the company, read reviews, what do they sell, check their investor relations and P&L (profit and loss) statements. Not all of them migh be solid long term investments, maybe good short term speculation opportunity.

There is and will be a very high interest in buying blockchain related stocks – even if a company doesn’t perform that well and their key metrics don’t make it a good purchase, being related to a blockchain technology will bring investors and push its price up. This is a clear bubble behaviour and it helps being aware of it. It doesn’t mean you shouldn’t buy these companies, but it should drive your investing strategy. They can go high fast, but they can fall fast too, so be prepared. On the other hand – if you buy cheap, low value stocks and invest smaller amounts, the downside is limited, the upside is much bigger.

Whether we are seeing a blockchain / crypto bubble or not, if you choose your investments , there will be some that will make it out of the bubble and profit. Same as during the dot.com bubble – many companies failed, but some didn’t (Google, Facebook, PayPal, Ebay, Amazon etc). If you have invested in others and at least one of these, you are probably still a happy investor.

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