Bitcoin has become a popular alternative form of investment in recent years. The cryptocurrency has also brought extremely high returns over the past few years. Accordingly, interest in investing is also increasing among people who have not previously had anything to do with the crypto market or the blockchain. What does it mean to buy Bitcoin stocks?
Well, Bitcoin shares and other financial products related to cryptocurrencies offer an ideal entry opportunity for investors who have not previously had any contact with Bitcoin. In this article, we explain how you can buy Bitcoin stocks and other financial products. We’ll also talk about the differences between each asset class.
What is Bitcoin Crypto?
Bitcoin is the most well-known cryptocurrency. It was developed as the first decentralized currency in 2009 and revolutionized currency and the financial market with the blockchain. Bitcoin later developed from a decentralized currency into a popular investment object.
This crypto is based on a decentralized booking system. The transactions are legitimized with a digital signature. The Bitcoin blockchain is a peer-to-peer network. The blockchain is continuously stored on the nodes of the network. In a transaction, an exchange of decentralized currency takes place between two parties.
What Happened to Bitcoin Price in 2022?
The Bitcoin price will remain volatile in 2022. Because the demand for cryptocurrencies is always subject to strongly fluctuating cycles. The Bitcoin price sometimes loses double-digit percentage values within a few days, but can rise sharply within a short time.
In 2022, the trend was down until mid-February. However, we saw a trend reversal in February. Bitcoin has shown a slightly positive trend since then. Bitcoin’s all-time high was reached at over $68,000 in early November. The Bitcoin price is currently at $44,400 (as of March 25, 2022).
How to Buy Bitcoin Stocks – Explainer
Anyone who is still reluctant to invest directly in Bitcoin and to deal more intensively with topics such as wallets and transactions can use Bitcoin shares as an alternative. These are the shares of companies that are directly related to Bitcoin or indirectly benefit from the development of Bitcoin.
For example, Bitcoin exchanges and brokers on which Bitcoin or related products are traded such as Binance, benefit from Bitcoin. A rising Bitcoin usually ensures an increased trading volume on these platforms. Other companies that benefit from Bitcoin include suppliers of Bitcoin mining equipment.
What Bitcoin stocks are there?
We put together a small selection of companies whose shares you can invest in when it comes to Bitcoin:
- Bitcoin Group: It is a German holding company that includes Futurum Bank. This operates the largest European Bitcoin marketplace bitcoin.de.
- Coinbase: Coinbase is one of the largest and most popular crypto exchanges in the world. The company generates revenue from users’ transaction fees.
- Nvidia: The company is one of the largest developers of graphics cards (GPUs) for computers and gaming consoles. However, Nvidia is also one of the most important suppliers of Bitcoin mining material.
Bitcoin Stocks Alternatives
As you have surely noticed, Bitcoin stocks are stocks of companies that are dependent on the development of Bitcoin. However, other factors also play a role in the development of these stocks. Investment products that better reflect the value of bitcoin are available as alternatives.
ETNs ( exchange-traded notes ) are listed bearer bonds that reflect the value of bitcoin better than the bitcoin shares mentioned. Bitcoin ETNs are traded centrally via the Xetra stock exchange. The BTCetc Exchange-Traded Crypto (BTCE) became the first tradable Bitcoin ETN in Germany.
Bitcoin ETFs first entered the financial markets in the last few months. In order to circumvent the strong regulations, these ETFs are based on Bitcoin futures as a basis. Bitcoin futures are contracts for difference. A buyer and seller agree on a transaction for a certain number of bitcoins at a certain price on a certain date.
How to Buy Bitcoin Stocks?
There are many exchanges that offer trading services. It is also a good idea to use exchanges that allow topping up your account via cryptocurrencies! The process to start buying Bitcoin stocks is quite simple:
- Sign up with your preferred exchange
- Verify your trading account
- Finish with the compliance section (KYC)
- Fund your account
- Look for your favorite Bitcoin stock
Here’s a list of brokers where you can easily fund your account and buy Bitcoin stocks:
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