When it comes to investing in digital assets, there are hundreds of them to choose from. However, due to risks and the complexities involved in buying individual coins, the process can be very daunting.

But worry not; you can invest in digital assets through less complex and low risk ways like investing in crypto stocks, exchange-traded funds (EFTs) & funds, and Contract for Difference (CFDs).

What Are Digital Assets?

In the past, digital assets meant anything that existed in digital format like documents, pictures, and videos. With the rise of the blockchain technology, the term ‘digital assets’ means items that are investable like NFTs, cryptocurrencies, tokenized real-estate, and asset-backed tokens. These assets exist in a digital environment but have value in the real world.

Ways to Invest in Digital Assets Without Buying Crypto

You can venture into digital assets without buying cryptocurrencies by investing in the following:

Crypto Stocks

One way to dip your toes into the digital assets pool without buying cryptocurrencies is by investing in crypto stocks. It involves buying individual stocks of companies that are in the crypto industry. These companies include bitcoin mining firms, crypto exchanges, and banks that offer solutions to crypto firms.

Basically, by investing in crypto stocks, you get a way to bet on the companies that will be leading in the industry. Moreover, trading crypto stocks on most major brokerages is commission free – but some brokerages might charge management fees.

If you’re looking to invest in digital assets without very high risks, crypto stocks are the way to go. However, note that cryptos inherit volatility, negative industry trends and poor earnings reports which can lead to a plummet on the value of the stocks.

Crypto ETFs and Funds

The other way to invest in digital assets without buying crypto is by venturing into crypto related exchange-traded funds (EFTs). EFTs are pooled investment securities that operate more like mutual funds. Typically, these securities track particular indexes, commodities, sectors, or other assets, but can be bought or sold on stock exchanges, unlike mutual funds.

Investing in EFTs is viable for you if you believe that blockchain technology can become a huge economic force in the world. EFTs that track broader industries are less volatile and have lower risks compared to investing in crypto coins.

You need to be aware that EFTs do not offer you ownership on actual cryptos, hence cannot be used to pay for goods or services. Also, if a specific crypto or company grows in value, you may not be able to gain the same level of growth by owning an EFT because the upside associated with the crypto or the company can be diluted.

Crypto CFDs

Contract for Difference (CFD) is another way to invest in digital assets without investing in cryptocurrencies. CFDs trading enables you to invest in assets like stocks, indexes, or currencies through engaging in a contract between you and a broker offering the asset you would wish to invest in.

Typically, what happens is that you and the broker agree to replicate market conditions and settle the difference when the position of the asset closes on the market. If the asset closes on a profit, the broker pays you and if it closes at a loss, you pay the difference to the broker.

Investing in CFDs offers you many advantages such as leveraged trading, access to overseas markets, and short (sell) positions for assets, which don’t exist in direct trading.

Opinion About Investing in Crypto Alternatives

Investing directly in cryptocurrencies necessitates signing up on an exchange and finding strategies to keep your digital assets safe. It may also imply that you need to invest a significant amount of money on volatile cryptocurrencies. But fortunately, there are alternatives like crypto stocks, ETFs and CFDs.

However, note that all investments in digital assets have their advantages and disadvantages. This necessitates performing proper research for more informed decision making on which digital assets to invest in.

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