In 2017, the cryptocurrency phenomenon gripped the world. And even now in 2018, it’s hard to avoid hearing friends, co-workers, or even barbers discussing the purchase of various cryptocurrencies.

This is not a suitable strategy for everyone. Perhaps you’ve not traded cryptos before, and are unwilling to. But that doesn’t mean you’re not curious and attracted by potential returns. Therefore, you’re looking for a safer way to gain exposure to the boom without directly investing in a volatile currency.

This report analyses a handful of blue-chip equities from various sectors which, in their own way, provide exposure to the financial world’s hottest market.

Why are cryptos receiving attention?

Since mid-2017, a growing number of media outlets, financial institutions and market commentators have been reporting on the cryptocurrency boom, initially championed by industry flag bearer Bitcoin.

Stories of investors making returns of 100% or more, without any trading experience, attracted immense interest in new but volatile market, especially given low interest rates and overvalued equity markets.

Some traditional investors are cautious, suggesting that price surges are speculative rather than generated by fundamentals. Despite this, demand has boomed globally and shows no sign of letting up, encouraging traditional investors to look elsewhere.

The platforms used to trade them, the computer hardware needed to procure them and research projects to harness their underlying technologies, have all unearthed potential opportunities that do not involve trading the cryptocurrencies themselves.

The risks of trading cryptocurrencies

There are multiple reasons why direct investment in cryptocurrencies is risky. Primarily, volatility is a concern; swings of 20-30% a day are commonplace and often occur based on very little news. Falling on the wrong side of this could be very costly.

Increased volatility has also lead brokers to double, triple or even quadruple margin required to open even the smallest of positions. The spreads offered by providers are not consistent and often range from 20 to 200 points, meaning you’re often down a considerable amount as soon as you open a position.

And that’s before selecting a cryptocurrency from the array available and confirming with your broker that a trade be made. Many firms have halted or even cut their crypto offerings, leaving investors questioning when, if at all, they can enter a new position.

Mitigate your crypto risk with equities

These risks are not to be taken lightly, and should you not want to be exposed to them, there are opportunities to trade less volatile equity stocks that have some form of exposure to cryptocurrencies.

This still allows you to tap into the return potential of the cryptocurrency market, however it removes a significant portion of trading risk. Furthermore, the process to trade equities is far simpler than cryptos, through a single, simple platform to execute trades.  Furthermore, Accendo Markets is fully regulated by the FCA, protecting you and your money. Contact us to find out more about our award-winning service.

Overleaf, we introduce four stocks with varying levels of cryptocurrency exposure that could provide alternative opportunities to trade the current trend.