How to invest in Bitcoin without actually owning the coins?
It is not necessary to buy Bitcoins to invest in the Bitcoin’s price movements. In this article, we’ll discuss 4 methods you can use to invest in Bitcoin without actually owning the coins.
There are various companies that are directly or indirectly involved in cryptocurrencies such as Bitcoin. The stock prices of these companies often move in sync with that of Bitcoin. Examples of such companies are cryptocurrency exchanges (Coinbase) or hardware companies that provide equipment for mining Bitcoins (NVIDIA).
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It is important to note that the price of Bitcoin and that of crypto shares do not necessarily correlate. Even with a rising crypto price, a share can decrease in value. Do you want to learn more about trading Bitcoin shares? Read this article.
Method 2: actively speculating on price movements
It is also possible to actively speculate on the price movements of Bitcoin by using derivatives. A popular derivative that allows you to speculate on both price increases and decreases of Bitcoin is the CFD.
A CFD is a derivative product: when you buy a Bitcoin CFD, you never actually own the underlying Bitcoin. Trading in Bitcoins using CFDs has several advantages:
- Thanks to leverage, you can take a large position with a small amount of money
- You can speculate on falling prices with a short position
- This method of trading is very suitable for the short term
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Method 3: investing in a Bitcoin index
You can also choose to invest in the price movements of Bitcoin by buying an index. Well-known examples of such indexes are the S&P Bitcoin Index, S&P Ethereum Index and the S&P Crupto Mega Cap Index. With these indexes, you directly follow the price movements of a cryptocurrency.
You can also decide to invest in a cryptocurrency stock index. A cryptocurrency stock index invests your money in a basket of companies that deal with Bitcoin. It is advisable to research which companies are included in the index.
Method 4: Bitcoin futures
You can also speculate on the price movement of Bitcoin with futures. Futures are more complicated than many other investment instruments. Additionally, some providers allow you to use very high leverage: up to 100X. This can be interesting if you know what you are doing.
Why would you invest in crypto without buying Bitcoin?
Investing in cryptocurrencies without buying them yourself is quite popular, but why? One advantage is that you can apply diversification . Especially in the case of ETFs, you can invest in a selection of cryptocurrencies or crypto stocks all at once.
Another advantage is that it’s simply less of a hassle. When you buy Bitcoins yourself, you have to secure your account and select good buying opportunities. By investing in stocks or ETFs, you don’t have to open a Bitcoin investment account yourself.
However, if you’re still interested in buying Bitcoins yourself, you can use one of these reliable crypto exchanges:
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 | Speculate in popular crypto products with eToro! Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more | |
 | Speculate on increasing & decreasing crypto prices with the CFD provider Plus500 using a demo account. 82% of retail CFD accounts lose money. |
Conclusion: Can you invest in Bitcoin without owning them?
You definitely can! As you’ve read in this article, there are enough alternatives for a direct investment in Bitcoin. Just like with all other investment products, it is important to research the investment products well before investing your money. This prevents you from losing a large amount of money.
