Cryptocurrencies like Bitcoin and Ethereum have rallied in the last week, following several months of weakness. Investors interested in the asset class have several ways to gain exposure.
Retail investors looking to participate in the crypto market have these alternatives:
- Buy cryptocurrencies directly
- Buy stocks involved in the cryptocurrency industry
- Trade futures
You Can Buy Cryptocurrencies Directly
One of the most straightforward way to invest in cryptocurrencies is by directly purchasing digital assets like Bitcoin, Ethereum and Litecoin. These trade 24 hours a day, 7 days a week on cryptocurrency exchanges. These products can be purchased in fractional amounts, which makes even high-priced cryptos accessible to smaller investors.
You Can Buy Crypto-Related Stocks
Several companies are focused on cryptocurrencies, or have some of their business exposed to it. These stocks tend to be highly volatile and follow moves in digital assets like Bitcoin. This table identifies some of the most actively traded:
|Riot Blockchain (RIOT)||Bitcoin mining|
|Coinbase (COIN)||Crypto exchange|
|Marathon Technologies (MARA)||Blockchain technologies|
|Bit Digital (BTBT)||Bitcoin mining|
|Bitfarms (BITF)||Bitcoin mining|
|Microstrategy (MSTR)||Bitcoin owner, consultancy|
|Grayscale Bitcoin Trust (GBTC)||Trust holding Bitcoin|
(Trades over the counter)
|Canaan (CAN)||Bitcoin mining hardware|
You Can Trade Crypto Futures
Investors interested in cryptocurrencies can also trade futures tracking Bitcoin and Ethereum. However, they should first understand how the futures market functions.
Futures are derivatives that trade from Sunday night through Friday afternoon. They’re most popular for stock indexes like the S&P 500 (@ES) and commodities like crude oil (@CL). Futures contracts use the concept of margin, which means you need to have a certain amount of capital in your account to go either long or short. Profits are accrued based on correctly positioning before a move. Unlike trading cryptos or stocks directly, futures traders never directly own anything.
Here are the key futures contracts tracking cryptocurrencies:
|Coins / Contract|
|CME Bitcoin Futures||BTC||July 2021 (BTCN21)||5 coins|
|CME Micro Bitcoin Futures||MBT||July 2021 (MBTN21)||1/10 of a coin|
|CME Ethereum Futures||ETH||July 2021 (ETHN21)||50 coins|