Investing directly in bitcoin or other cryptocurrencies can be dangerous as their valuations can go on wild swings. At the start of the year, bitcoin was at a value of more than $40,000 U.S. but in the weeks since then it has fallen to around $30,000 U.S. That's a decline of 25% in a short time frame.
The price of cryptocurrencies can change often and without warning since there's a lot of speculation involved, which can make it risky to invest in.
A good alternative for investors is to invest in blockchain technology as a whole. And one way to do that is to invest in an exchange-traded fund (ETF) that has exposure to it, such as the Siren Nasdaq NexGen Economy ETF (NASDAQ:BLCN). In addition to blockchain, the ETF holds many top tech and financial stocks that utilize blockchain and that can benefit from its growing popularity.
Some of the big names in its top 10 holdings include Baidu, Square, Samsung Electronic, and even top bank stock JPMorgan Chase & Co. The fund's top holding is Galaxy Digital, which has a weight of just over 3%. A little over one-third of the fund's stocks are in financial services, providing some good diversification for blockchain investors.
Over the past year, the ETF has risen more than 55% in value while bitcoin has surged close to 300%. While it may not achieve the same type of returns as what you'd get from investing directly into crypto, it can be a much safer way to invest in the blockchain technology and prevent you from incurring significant losses if digital currencies crash.
