How To Invest In Blockchain – Investing in Blockchain For Beginners 2021
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
If there’s one form of technology that’s been on everyone’s mind in the past couple of years, it’s Blockchain. Originally, Satoshi Nakamoto created the Blockchain alongside Bitcoin to act as its public transaction ledger, however, since then the use case for Blockchain technology has been increasing at an incredible rate. This is partly because the Blockchain is a distributed-database, with several improvements over traditional databases that are used in almost everything. In this guide, we’ll cover exactly how you can start investing in the Blockchain, the best brokers to do so, and some of the pros and cons to your new investment,
Table of Contents
#1 Broker to Invest in Blockchain– eToro
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How to Invest in Blockchain – Step by Step Guide 2021
Ready to invest in Blockchain technology? Then we’ve got you covered! Continue reading to find out how you can make your first investment in just a few minutes.
- Step 1: Open an eToro account: The first thing you’ll need to do is open an account with eToro. Simply type “eToro.com” into your browser, press the “Join Now” button, and fill in the necessary details.
- Step 2: Verify your Identity: Every regulated brokerage will require you to verify your identity, this is part of the KYC (know your customer) process. All you’ll need is a photo ID (passport, driving license) and proof of address (bank statement utility bill)
- Step 3: Fund your account: Once you’ve been verified you’re only one step away from investing. All that is left is funding your eToro account. To do so just click on the “Deposit Funds” button, enter the amount you wish to invest, and press deposit. You can pay using either a credit/debit card, bank transfer, or e-wallet (PayPal, Skrill, etc)
- Step 4: Invest in Blockchain: Now that you’ve funded your eToro account, you’re ready to invest! Just type “CryptoEqual” (or whichever Blockchain investment you choose), enter the amount you’d like to invest, and press “Buy”.
Where to Invest in Blockchain – Choose a Broker
Prior to making your first investment in Blockchain, you’ll need to choose a reputable broker. We understand that there’s a huge amount of information out there surrounding different brokerages, so to make it easier for our readers we’ve compiled a list of the top 3 brokerages that allow you to invest in Blockchain technology.
1. eToro – Best Blockchain Brokerage for all Investment Types
Since its launch in 2007 eToro has had a meteoric rise to fame, they’ve gone from humble beginnings to serving over 20 million active customers. This tells you all you need to know about the service eToro offers, customers are put first and given all the tools they need to succeed. Regardless of if you’re looking to make your very first investment, or have made hundreds, you’ll find yourself right at home on eToro.
Security & Privacy
For investors, security usually comes first. After all, you’ve already got to worry about how your investment is performing, you don’t want to worry about your brokerage getting compromised. To ensure eToro remains as secure as possible they’ve implemented several industry-leading security measures. The first being SSL encryption for sensitive data, this ensures that your data is safe from hackers trying to intercept it. Users can also enable 2FA, an additional layer of security for your account that works by requiring a code that’s sent to mobile/email before you can complete any important account actions. eToro is a regulated platform, meaning that your investment is in safe hands.
Features
eToro is jam-packed full of useful features, perfect for investors of every skill level. New investors may be interested in CopyPortolios, a way you can invest in a diverse range of assets with the click of just one button, granting new users immediate access to a well-balanced portfolio. eToro has an intuitive interface perfect for beginners, however, behind that simple interface lies an incredibly powerful platform. If you like to use advanced charting techniques, you’re covered, eToro has some incredibly advanced charting tools, so regardless of your strategy you can rest assured it’ll likely be possible on eToro.
eToro Fees
| Fee Type | Fee Amount |
| Commission Fee | 0% |
| Deposit Fee | $0 |
| Withdrawal Fee | $5 |
| Inactivity Fee | $10 after one-year inactivity (Monthly) |
Pros
- Regulated
- 2FA
- CopyPortfolio
- SSL encryption
- Low Fees
Cons
- Could benefit from MetaTrader support
67% of retail investor accounts lose money when trading CFDs with this provider.
2. Gemini – Best Blockchain Brokerage for Crypto Investors
Gemini, founded in 2014, is the youngest platform on our list, but that by no means equates to a lack of features. Created by the Winklevoss twins of Facebook fame, Gemini is an excellent cryptocurrency exchange aimed primarily toward those without much trading experience. That being said, they’ve done well to be inclusive of experienced traders by creating the Gemini Pro Trader platform.
Security & Privacy
As Gemini themselves have stated, they’ve operated with a “security-first mentality from day one”, this has translated well into investor confidence. They use several unique measures to ensure the safety of customers’ funds, directing a portion of their focus to protect against internal errors and misconduct from staff. The majority of funds stored in Gemini are held in air-gapped cold storage, meaning funds are kept safe offline, keeping investors protected, even if Gemini gets compromised.
Features
Gemini has managed to include plenty of advanced features while remaining user-friendly and simple to use. Their exchange is streamlined and provides an easy way to invest in crypto, although it could be a bit too basic for experienced traders, this issue is remedied by Gemini’s inclusion of their “Pro Trader” platform. To help make cryptocurrency accessible for the masses, Gemini has created a platform called “Cryptopedia” which as the name would imply, is an educational platform that currently has over 350 articles, encompassing pretty much every topic you could think of. Gemini is regulated by NYSDFS and is one of the only cryptocurrency exchanges that’s available in every state in the US.
Gemini Fees
| Fee Type | Fee Amount (%) |
| Convenience Fee | 0.5% |
| Transaction Fee | 1.49% |
| Deposit/Withdrawal fee | 0% ACH & 3.49% card fee |
| Inactivity Fee | $0 |
Pros
- Available in every state
- Great security
- Pro trader platform
- Regulated
Cons
- Only supports cryptocurrency trading
- Higher than average fees
67% of retail investor accounts lose money when trading CFDs with this provider.
3. Fidelity – Best Platform to Invest in Blockchain ETFs and Stocks
One of the best-known investment platforms in the world, Fidelity is the perfect platform for anyone wanting to invest in ETFs, Stocks, or looking for specialized investment accounts. Outside of supporting a variety of markets, Fidelity allows people to create accounts for long-term savings or retirement. While their platform aims to cater to the needs of everyone, those without much experience may struggle slightly with their interface.
Security & Privacy
It wouldn’t make much sense for a global investment platform that’s been around since the 60s to skimp on security. They’ve taken biometric security to the next level, by implementing voice biometrics, a way users can verify their identity by speaking into a microphone-enabled device. Additionally, they’re verified by the SEC and FINRA, which is always a reassurance for wary customers. US-based investors have their cash balances protected by FDIC insurance up to $250,000, so even if there’s an issue on Fidelity’s side, you’re covered.
Features
Fidelity has branched out into a heap of financial sectors, which isn’t surprising since they’ve been around since the days of Led Zeppelin and Jimi Hendrix. When investing with Fidelity you’ll have access to a huge amount of investment products, from Stocks to IRAs, and credit cards, this ensures that no matter your investment goal, you’ll be covered. To help its customers make the right investments, Fidelity offers a wealth management service, providing investors with a dedicated financial advisor and personalized investment management (although you’ll have to meet their requirements). Additionally, to make sure everyone investing with Fidelity has access to high-quality information to base their decisions on, users are provided with a huge amount of extremely well-researched information covering most markets and trending topics.
Fidelity Fees
| Fee Type | Fee Amount |
| Commision Fee | 0% |
| Deposit Fee | $0 |
| Withdrawal Fee | $0 |
| Inactivity Fee | $0 |
Pros
- Regulated
- FDIC insurance
- Solid market research
- Consultancy service
- Huge range of financial products
Cons
- Some services are not accessible to everyone
- The interface may be confusing for beginners
Invest in Blockchain – Broker Price Comparison
| Broker | Commission | Deposit Fee | Withdrawal Fee | Inactivity Fee |
| eToro | 0% | $0 | $0 | $10 monthly (after 12 months inactivity) |
| Gemini | Convenience fee 0.5% + 1.49% Transaction fee | 0% ACH & 3.49% card fee | Variable | $0 |
| Fidelity | 0% | $0 | $0 | $0 |
What are the Different Ways to Invest in Blockchain?
When it comes to investing in the Blockchain, you’ve got plenty of options. Due to the Blockchain being a form of technology rather than a company you can directly invest in, you’ll need to figure out which type of investment would best suit your needs. Below, you can find 3 different ways to get a foot-in-the-door in the world of Blockchain technology.
Stocks
One way that’s often overlooked when discussing how you can invest in Blockchain technology is buying shares of a company involved in the sector. Because Blockchain technology has such a wide use-case you’ve got heaps of choice when it comes to selecting which company you’d like to invest in. It’s easier to break your options down into sectors, you could invest in a company that produces the hardware needed to run a miner or validator node (Nvidia, AMD), you could invest in a company that runs mining operations (Bitfarms LTD), or even a company that holds a large amount of Bitcoin (Microstrategy, Square, etc). You’ll have to do some research and decide which sector is aligned with your trading goals, however, any large companies holding BTC should be the safest long-term bet.
ETFs (Exchange-Traded Fund)
If you’re looking for a low-risk way of investing in Blockchain technology, an ETF or exchange-traded fund provides an excellent entry point. An ETF is a group of assets bundled together by a fund, typically designed to mirror the performance of a certain index, in Blockchain’s case, this is typically a company that’s involved in the crypto space or holding a large amount of Bitcoin. Typically, because an ETF comprises a variety of companies, your risk exposure is far lower than if you were to invest in an ETF. It’s important to remember that despite the fact you may receive dividend payments, you’re not purchasing any underlying assets.
Cryptocurrency
Investing in cryptocurrency is by far the most direct way you can invest in Blockchain technology, after all, Bitcoin was the very first thing to utilize the Blockchain. Bitcoin is most people’s go-to when investing in cryptocurrency as it’s the largest and most stable cryptocurrency (although it’s still subject to wild swings). The price of cryptocurrency isn’t solely linked to Blockchain technology, each coin has its own unique use-case, meaning before investing you should take care to research what your chosen coin is designed to do. Directly purchasing cryptocurrency is considered to be a riskier way of investing in the Blockchain, however, it comes with the benefit of potentially massive returns just from holding the coin.
Best Ways to Invest in Blockchain
Now that we’ve discussed the different ways you can invest in Blockchain, we’ll speak about who can best benefit from each type of investment. You should always weigh the advantages of a certain type of investment against your specific needs.
Invest in Blockchain Stocks
Investing in Blockchain stocks gives you excellent long-term performance while shielding you from some of the risks involved with direct investment into cryptocurrency. This makes it perfect for anyone wanting to take advantage of the Blockchain boom, while only taking on a moderate amount of risk. Investing in shares of a company that’s part of the Blockchain ecosystem has several benefits, the first being dividend payments. When you buy enough shares of a company you’ll often start to receive dividend payments (usually quarterly or annually), this is a company’s way of sharing a portion of its profits with investors. Another unique advantage to investing in stocks is the ability to vote on the future of the company, the amount of votes you can cast is directly tied to the number of shares you own.
Invest in a Blockchain ETF
Does your trading strategy involve taking on the lowest amount of risk possible? If yes, then an ETF is likely the perfect investment for your needs. When investing in a Blockchain ETF, you’re putting money into a group of companies that are active in the Blockchain space, meaning that you’ll often have exposure to a variety of markets, in turn massively reducing risk. Although a fund may pass on dividend payments you should be aware that when investing in an ETF you don’t own any of the underlying assets.
Invest in Cryptocurrency
This past year cryptocurrency has been all the rage, it’s been constantly making headlines and drawing comments from prominent names in the tech/finance space. Currently, there isn’t a single market out there that is generating as much wealth for investors as cryptocurrency, this can be attributed to the fact that crypto is still very much in its infancy – an investment in crypto is akin to investing in Tesla in 2010. Investing in a cryptocurrency, like Bitcoin, is the only way to get direct exposure to Blockchain technology, when you purchase a coin you can use it to interact with the Blockchain in a huge range of different ways. Cryptocurrency is an extremely volatile market and as such is classed as a high-risk investment, therefore purchasing crypto is best suited to those looking for a high-risk, high-reward type investment.
Is Blockchain a Good Investment?
You would be hard-pressed to name a technology that’s set to shake up the world as much as the Blockchain. It revolutionizes the way data is stored and considering almost every business/website/app utilizes some form of data storage, Blockchain technology is likely to creep its way into a plethora of industries.
Faster & More Efficient
Almost every form of technology requires information to be sent from one device to another, the issue being that these transactions are not always quick or very cost-effective, this is where Blockchain technology comes into play. Rather than focussing on speeding up transactions by purchasing more powerful (and expensive) hardware, you can instead implement Blockchain technology. Take, for example, cross-border payments, traditionally, if you wanted to send funds internationally, you would be forced to use a 3rd party, typically charging a 10-20% fee and taking anywhere from hours to days to complete the transaction. In stark contrast, a cryptocurrency designed for international transactions like XRP can facilitate near-instant transactions costing only pennies.
Security
Another area that is greatly improved by implementing Blockchain technology is security. Instead of relying on a central server to store information, the Blockchain database is typically stored on every computer on a network, this means that it’s incredibly hard to falsely validate a transaction. Because a Blockchain is a distributed-database, there’s no single point of failure, making it far more secure than storing information on a large, central server. Additionally, the Blockchain also makes use of cryptography to encrypt all data, making it extremely difficult to decipher information that you shouldn’t have access to.
Investing in Blockchain – What are the Risks
There’s a reason an investment into Blockchain technology is considered fairly risky, it’s typically highly volatile and unproven. Of course, the upsides to Blockchain are tremendous but if you plan on investing, especially for the long-term, it’s just as important to consider the risks associated with putting your money into something without a proven track record.
Volatility
Unfortunately, pretty much every crypto-related investment is subject to extreme volatility, this is caused by constantly changing regulations, lack of a solid track record and prominent figures speaking out against cryptocurrency. Although certainly scary for investors, volatility isn’t always a negative thing. In fact, without so much volatility it would be harder to see large amounts of profit, price swings allow investors to buy in cheaper and sell for higher than they would in a more stable market. Although you can use volatility to your advantage, too much is likely to cause a great deal of stress, especially for long-term investments, therefore you must always research how a potential investment has been recently performing.
Unproven Technology
In the past year or two, an increasing number of companies are beginning to implement Blockchain technology into their businesses. While this is great, we don’t know how it’s going to go. Blockchain technology hasn’t been around for particularly long, especially not in a usable capacity for businesses. This means that while institutional interest in Blockchain is high, we have very little to go on when it comes to predicting how successful it’s likely to be. This means that although many are raving about the future of Blockchain technology, it’s entirely possible it won’t make as big of an impact as people believe, making it quite a risky investment.
How to Invest in Blockchain with eToro
At Economy Watch we understand how difficult it is to get started on a new investment platform, that’s why we’ve created this comprehensive guide on exactly how you can invest in Blockchain technology with eToro.
Step 1: Open an account with eToro
If you want to invest in Blockchain technology, the first thing you’ll have to do is register with a trusted brokerage. We recommend using eToro because their platform is incredibly user-friendly, powerful, and secure. Just type “eToro.com” into your browser, press “Join Now”, and fill in the required details.
Step 2: Verify your account
Because eToro is a regulated platform, you’ll need to verify your identity. Don’t worry, this is standard practice and will be necessary for any trusted brokerage. Luckily, getting verified is easy, all you’ll need to provide is a photo ID (passport, driving license), and proof of address (bank statement, utility bill).
Step 3: Fund your account
You’re only one step away from investing in the Blockchain! All that’s left is funding your eToro account. Just click on the “Deposit Funds” button, enter however much you’d like to invest, and press “Deposit”. Your funds will be automatically credited to your account. eToro supports credit/debit cards, bank transfers, and e-wallets (PayPal, Skrill).
Step 4: Invest in Blockchain!
Now you’re ready to make your first investment! In the eToro search bar type in your investment of choice (we’ll use eToro’s CryptoEqual), select the relevant option, press “Trade”, enter the amount you’d like to invest, and press “Buy”. That’s it, after following this guide you’ll have made your first investment into Blockchain technology!
Conclusion
To summarize, Blockchain technology is a revolutionary way of storing data and has some major implications for industries across the globe. It’s still early days for Blockchain, meaning it’s an excellent time to get involved before prices begin to shoot up. Throughout this guide, we’ve covered the best Blockchain brokerages, a few different ways you can invest in Blockchain technology, and provided a detailed explanation on how you can make your first investment. If you’re ready to make an investment, but struggling to make a selection on which broker is right for you, we recommend eToro. Unlike some other platforms, they have a commission-free fee structure meaning you get every-last-penny out of your investment, additionally, they have phenomenal security, and access to a huge range of markets. Throughout this guide, we’ve covered the best Blockchain brokerages, a few different ways you can invest in Blockchain technology, and provided a detailed explanation on how you can make your first investment. Overall, we’d say it’s an excellent time to get involved in Blockchain technology, the potential over the next few years is too big to be ignored.
Best Broker to Invest in Blockchain – eToro
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