Market Information

Market Information

Are Cryptocurrencies Shares a Solid Investment?

Tuesday, October 23, 2018

Rewind back to this time last year, and cryptocurrency seemed like the new wave of finance, triggering a swarm of people trying to convert their investments in hopes of a massive payoff. Some made out like bandits, but when the market corrected itself earlier this year, many other people were left out in the cold, but even if cryptocurrency isn’t creating overnight millionaires, it’s still changed a lot of the ways people look at finance.

One example is cryptocurrencies shares. People may not be interested in buying the currency itself, but having a shareholder role in the companies that provide them is appealing to many. But now that the dust has settled in this particular area, is it still a good idea?

The Issues With Cryptocurrencies Shares

The nice thing about cryptocurrencies shares is that they, in theory, offered a layer of safety rather than choosing to buy stock in cryptocurrency mining companies, so even as individual currencies rise and fall, they could still make money due to the overall need.

However, there’s still going to be an element of risk, just perhaps not as catastrophic. For example, if currency prices see another drop, it’s likely that investments, even in shares, will drop in value as well. In addition, bought-deal offerings may mean that existing investors see diminishing returns on what they have.

With cryptocurrency shares perhaps not being the sure bet that they used to be, some people may be reticent to try and buy in, but then again, you could make the argument that this would make the perfect time, considering that getting involved is considerably less expensive than it was during its peak. What future investors need to understand about investing in cryptocurrency shares, as well as cryptocurrency itself, is that by nature, there are going to be undulations.

A lot of what triggered the crash earlier this year was some governments mulling over potential regulation to some of the most popular cryptocurrency out there. Indeed, not all of these regulations were finalized, so there may still be some up-and-down in the future. So, ultimately, cryptocurrencies shares may not be a solid investment, but that doesn’t make them a bad one.  It’s probably a poor idea to build your entire portfolio around them, though.

One Side Option

However, people who are interested in the investing potential of the crypto world may want to look into investing in blockchain technology instead. The fact is that blockchain may have been brought to the forefront by cryptocurrency, but this isn’t the only use that it has. Remember, blockchain can record any sort of transaction, not just a financial one, expanding the potential offerings considerably. Here are a few other areas where blockchain stands to have a transformative role:

  • Banking
  • Healthcare
  • Advertising
  • Charity
  • Retail
  • Crowdfunding
  • Human resources

So, perhaps the best thing to do for those who are still intrigued by cryptocurrency as an investment opportunity is to try and make sure they are investing in crypto-adjacent shares as well. This way, they have the high-risk, high-reward as well as some more stable options.

The perception of cryptocurrency, and the companies that are powering them, may have taken a hit since it set the world on fire at the end of last year, but it still has plenty of applications today, especially for the investors who are willing to take a more measured approach. This is where companies like PrimaryMarkets come in, serving as a global independent marketplace that allows wholesale sophisticated investors to connect with secondary trading of securities and investments. In addition, we also help unlisted companies and trusts to raise new capital.

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