Crypto stocks are one of the easiest ways for traditional investors to access the crypto bubble, without having to actually own a digital asset. These stocks are no different than regular stocks. These are stocks in companies that either support crypto or use crypto, for example, Coinbase, MicroStrategy, and even miners. For some investors, they may offer a safer way into the market that combines some potential for innovation, with familiarity from the stock trading market.
But the fact is, crypto stocks may not move on the same trajectory as the real crypto markets. They may sometimes track with Bitcoin, But often times they will act more like overpriced stocks, tracking earnings reports or overall economic movements.
My personal strategy is to hold a small percentage of my portfolio in crypto stocks to provide some diversification. It can help offset some risk, while keeping me attached to the crypto market. However, I always remember - these are still stocks, and stocks can still be volatile.
Take time to research the company, their relationship with crypto, and their overall financial health before investing. Remember correlation does not equal guaranteed returns.
Notice the theme of balance, as well as information - and always Do Your Own Research (DYOR)!
