How Can I Buy an Online Business?

Most smaller online businesses are privately owned. They can be sold through direct negotiation with the owner or through a broker.

If you know of an online business you would be interested in buying, you can contact the owner and try to agree on a deal. This approach requires some homework to ensure the business is healthy.

• Analyze online traffic by using a tool such as SEMrush;
• Analyze the profile link. Ahrefs is a great tool to help you.
• Examine business records to assess cash flow, growth, and costs.

It’s a good idea to consult an attorney and an accountant to advise you, especially if a substantial sum is involved.

If buying an online business without an intermediary scares you, there are other ways. The most common way to find and invest in online businesses is by using online brokerage platforms.

Flippa

Flippa is a platform where you can search and buy online businesses. They sold more websites than all of their competitors combined, with a total sales of $375m by the time this post was written.

It is also the platform where more businesses can be found: 5000 new businesses and domains are listed for sale on Flippa every single day. As a consequence of such high volume, some auctions will present a host of low-quality, uninteresting sites.

Finally, Flippa provides some information to the buyers, such as verified Google Analytics, due diligence from Alexa, SEOMoz, etc. to save buyers time in checking that data.

If you are willing to do the work of searching for deals, you can buy an online business in an auction using Flippa.

Alternatively, you can use the FlippaFinder service and Flippa will search for businesses that match your criteria.

They will also approach the business owners, assess their business against your criteria, and present you with new opportunities weekly.

Once you choose a business you would like to buy, Flippa will do due diligence by helping you uncover the unique selling proposition, opportunities for growth, and any operational gaps. They will also help to negotiate.

Empire Flippers

Empire Flippers is another platform where you can search and buy online businesses.

Furthermore, Empire Flippers curates their list of online businesses, so low-quality sites should not be found in there. The price is defined by the seller, but it is often negotiable.

If you find an online business you would like to buy, you can either click the “Buy Now” button or you can make an offer and the Empire Flippers team will communicate with the seller to work out a deal.

Until you decide if you want to make an offer, you can either send emails to the seller or schedule a call, but a member of the Empire Flippers will be on the call to mediate and help.

How to Invest in Online Business

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Why Buying an Online Business Could Be a Good Investment

Here are four reasons why purchasing an online business could be a good investment.

Passive Income and (Possibly) Low Effort

With the right skills, running an online business might require minimal effort. If an online business makes money with ads or affiliate links, you are making money while you are asleep. This is a great way to generate passive income.

Remember that many online businesses require substantial time to manage effectively. You’ll need to review and update your content and offerings continuously. If you treat an online business as a passive investment, you may not be able to maximize your returns.

Quick Investment Return

Some online businesses can be bought by paying 2.5 to 3 times their annual earnings. If you buy an online business that is growing, the earnings will likely increase.

But let’s see an example where we assume the earnings remain the same after you buy it:

• Monthly earnings: $2,000
• Buy the business by paying 3 times its annual earnings: $72,000 ($2,000 x 12 x 3)

Three years later, you get all your money back and then you’ll have monthly income.

Compared with rental properties, for example, this investment option may offer a quicker return on your investment.

Potential to Skyrocket the Revenue

An online business can skyrocket its revenue. An example is Blush and Bar. In 2017, it was acquired for $75,00 when it was earning $1,000 per month. In 2019, Blush and Bar reported annual revenues of $1.3m and it was sold again for $550,000, which is 7233% higher!

Liquidity

Another benefit of investing in online businesses is liquidity, as you can see in the example above. If you manage to make the business more successful, there is a high chance you’ll sell it for a higher price than you paid for it.

Your ability to sell a business may depend on the current economic climate, so don’t assume that you’ll be able to make a quick sale.

What Skills Are Required to Invest in an Online Business

Buying an online business implies that you’ll need to maintain it. There are several skills required to run an online business successfully. Therefore, you should either have those skills or be willing to pay someone to do the work for you.

Here are four main subsets of skills to be aware of.

Search Engine Optimization (SEO)

People should be able to find your online business in search engines. The best and most sustainable traffic is organic traffic. If you are not on the first page of results in Google, you won’t get as many visits as you could.

SEO skills will help you boost your ranking.

To achieve this goal, you should be familiar with keyword research, analytics, page authority, domain authority, responsive design, backlink building, clean code, load times, and many other concepts. Tools such as Ahrefs, SEMrush, Moz, and UberSuggest offer services to help with this.

Content Creation

Content is probably the primary driver of traffic to your online business. Most likely, you can’t just keep the content that is already there, or otherwise, users might lose interest. 

You need to be ready to add more content regularly, which requires time and knowledge in the online business topic. You also have to continue updating old articles, so they remain relevant. When someone searches for something, they want to make sure the article covering the topic is recent enough.

Finally, you’ll need writing skills if the main content is text. If the main content is video, recordings, or images, ensure you are comfortable in those areas.

That said, a lot of very successful online businesses outsource content creation to professional bloggers and writers. If the financials make sense, you too should take advantage of this.

Passion

If you don’t have a passion for the online business topic you’re investing in, you’ll have a hard time maintaining it. It helps if you are passionate about the topic, which most likely means you will build expertise, and the users will trust and follow you.

Remember that success demands work. True passive income generally comes after putting in the necessary work now, so we can collect the benefits in the future.

Tech

How is the online business built? Was it built with WordPress? Or was it built from scratch in Ruby On Rails? How easy is it to add and edit content? How easy is it to edit the menu or the website structure? In summary, are you able to maintain the website?

Make sure you understand both the maintenance costs of an online business, and what it takes to get assistance when things don’t work as expected.

Are There Any Concerns About Investing in an Online Business

Before buying an online business, you should ensure you tick all the boxes from this checklist:

1. It is important to ensure that the data is real. Are the number of visitors and the reported revenue real or did the owner manipulate the data?
2. Do you have an interest in the business topic?
3. Do you have the skills to maintain an online business? If not, did you check how much it will cost to have someone do the work for you compared with the revenue you expect? If you need someone to do the work for you, will they be able to help you if there is an emergency?
4. Will the business remain relevant in the future?
5. Besides maintaining the website, are there any other tasks to be aware of, for example delivering products?

If you’re comfortable with the answers to the questions above, then great! You might be buying a great business that will generate passive income for you.

If you would like to go through a more detailed checklist, download these 660 due diligence questions for starting, selling, or investing in a business.

Conclusion

Investing in online businesses can be very rewarding if you find a good opportunity and have the skills to maintain it. There are many different platforms from where you can invest, some helping you move along the process than others, including protecting you from scams.

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Invest in Online Businesses is a part of our guide Alternative Investments For Beginners. Read up on other popular types of alternative investments:

• Investing in Art: (When) Is Art a Good Investment?
• Real Estate Investing For Beginners
• Investing in an Online Business 
• Investing in Commodities
• Crypto Interest Accounts
• Investing in Collectibles

The post How to Invest in Online Business in 2023 appeared first on FinMasters.

BlockFi

Companies like BlockFi allow people to earn interest on their crypto. According to their website, you can earn an interest of up to 8.6% annually on your cryptocurrencies. Interest is then paid back in cryptocurrencies, making your original investment compound over time.

BlockFi basically lends your cryptocurrencies to trusted institutional and corporate borrowers, on overcollateralized terms to avoid defaults. These institutions pay interest back to BlockFi. BlockFi does take a fee and pays the remaining back to the clients as interest. They also keep enough reserves to facilitate client withdrawals, so it all works smoothly.

Celsius Network

An alternative to BlockFi is Celsius Network. Celsius is a mobile app that lets investors earn interest on their cryptocurrencies, and like BlockFi, borrow cash against those cryptocurrencies.

Celsius’s interest accounts pay up to 10% interest, depending on the cryptocurrency, and claim to be the best provider in this space. They also pay interest weekly, in either cash or CEL tokens, which are Celsius’s own tokens. In order to incentivize users to use CEL tokens, they end up paying a lot more than they do in cash.

If you want to invest in Crypto Interest Accounts, BlockFi and Celsius are the top contenders in this space. But there are others you should check out as well, with slightly different approaches.

Nexo

Nexo, for example, also provides crypto interest accounts on stablecoins, besides USD, EUR, and GBP currencies. They provide interest rates of up to 8%, and they pay interest daily, allowing your funds to compound fast over time. Besides interest accounts, they also provide crypto loans and a card. Nexo’s card allows payments in local currencies, instant cashback on purchases, amongst other features.

Compound Finance

Compound Finance, on the other hand, has a slightly different offering. It is an algorithmic, autonomous interest rate protocol built for developers, to unlock a universe of open financial applications.

What it allows users to do is to provide liquidity to the market by placing the digital coins in it, and others will borrow from the market. Interest rates are then determined algorithmically, based on supply and demand, and interest accrues every Ethereum block. If there’s a lot of liquidity, interest rates will stay low. However, when there’s less liquidity, they will rise.

Note that Compound Finance is truly decentralized and it is quite trusted, so it’s a good alternative to those mentioned above.

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Mineral mavens shouldn’t put silver on the scrap heap. It’s a surprisingly essential and versatile metal with enduring value and appeal. Plus, silver’s price properties should appeal to risk-tolerant traders of all account sizes. So, let’s put the pedal to the metal and discover why silver truly deserves its label as a precious metal.

Silver Has Many Real-World Applications

If gold is for holding, silver is for using. You can also hold silver as an investment, but comparatively speaking, silver has a wider range of applications. There’s a reason people call silver an industrial metal. It’s used extensively by multiple industries throughout the economy.

According to the Silver Institute, silver is used in solar panels, electrical switches, and chemical-producing catalysts, and can be found in nearly every computer, mobile phone, and automobile^[1]. It’s durable and highly conductive of electricity, which makes silver ideal for coating electrical contacts, such as the ones found in printed circuit boards. Silver can help to reduce the need for wires as silver ink will provide an electrical pathway when it’s painted on a non-metal surface.

Then there are the traditional uses of silver in dental fillings, jewelry, silverware, and various antiques and collectibles.

Throughout the ages, gold may have gotten top billing but silver never really lost its shine. In the modern era, though, silver should always be in demand as long as people are buying electronic gadgets. As governments and private industry ramp up their 5G network spending, silver continues to play a role in building out the critical infrastructure.

Industrial use of silver creates ongoing demand that supports the price.

Silver Is Part of the Vehicle Electrification Movement

There’s another use of silver that’s so important, it deserves its own section. Many of today’s investors want exposure to the fast-emerging electric vehicle market. Sure, one can achieve this by purchasing shares of individual automakers, but this may turn out to be a risky proposition. On the other hand, investors might choose to own something that electric vehicle manufacturers need: silver.

Silver is ideal for electric vehicle components due to its conductivity, oxide resistance, and durability in harsh operating environments. Silver is used in many vehicles’ electrical control units; this is true for traditional internal combustion engine cars as well as modern electric vehicles.

Where the rubber really meets the road, however, is silver’s use in batteries that are used in electric vehicles, as well as the stations that charge these batteries.

Silver and the electric vehicle movement go hand in hand, and the numbers bear this out. As the Silver Institute reports, battery electric vehicles consume an estimated 25 to 50 grams of silver each, and hybrid vehicles consume around 18 to 34 grams of silver; meanwhile, internal combustion engine cars only consume roughly 15 to 18 grams of silver.

The net result has been and should continue to be, staggeringly strong demand for silver in the electric vehicle industry. 2021 automotive-market silver consumption was projected to reach 61 million ounces; this industry is anticipated to consume nearly 90 million ounces of silver annually by the year 2025^[2].

The Silver Price Moves Fast

Silver tends to exhibit faster price action than gold. If you’re more of a “slow and steady wins the race” kind of investor, holding gold might be the way to go.

Consider the math behind some of history’s biggest price moves in precious metals. From the 2008 low to the high in 2011, the gold price gained 166% – not too shabby^[3]. However, that’s nothing compared to silver’s mind-blowing 448% gain during the same time frame.

Yet, the silver sword is double-edged; what moves up fast can also drop fast. Thus, while gold lost 44.6% of its value from the 2011 high to the 2016 low, silver shed an eye-watering 71.8% of its value during that time.

That volatility can be risky, but if you time your entry and buy at a low point in the price cycle, it can also be an advantage.

Silver Could Provide a Good Hedge Against Inflation

Inflation is currently among the most pressing concerns among consumers and investors alike. As currencies such as the U.S. dollar lose value year after year, holding cash becomes a less appealing proposition for the long term.

This is where silver shares a common characteristic with gold and some other minerals: it’s resistant to currency inflation, and can even benefit from inflation. A historical example would be the inflation-intensive 1970s, during which the silver price rallied from $15 per ounce to $130 over a ten-year period^[4].

Of course, past performance doesn’t guarantee future returns, so don’t count on a repeat of silver’s stunning 1970s surge. The idea here isn’t to fantasize about life-changing gains in silver during high dollar inflation, but rather to consider silver as an asset that’s resistant to inflation and therefore a relative safety net when the dollar’s value falls. Besides, Morgan Stanley observes that “silver tends to rise more than gold with rising inflation and a falling dollar” due to silver’s “greater industrial demand”. Again, silver’s greater utility makes it even more useful when the currency loses its value.

There is a downside as well. Aside from the inherent risk of volatility and asset price declines, silver (like any precious metal investment) will not pay interest or dividends: your potential gain lies solely in asset price appreciation. This makes it important to buy at a low point in the price cycle and to take profit if it’s there to be taken.

Silver is much more than gold’s underappreciated cousin. It’s cheap, fast-moving, inflation-resistant, conductive, versatile, and crucial to the global trend toward electric vehicles. If you’re willing to cope with volatility feel free to go for the gold standard of industrial metals and stack some silver in your investment portfolio.

The post Is Silver a Good Investment? appeared first on FinMasters.

If you’re considering alternative investments, you’ll need to learn before you buy. Here’s a basic briefing to start the process.

What are Alternative Investments?

An alternative investment involves exposure to assets other than the traditional cash, bonds, funds, and stocks. Alternative investments may be made in physical assets (such as gold, art, or rare wines), or in financial assets, such as hedge funds, private equity, REITs, distressed securities, or cryptocurrency. These asset classes often do not have a correlation with equity markets, and they may perform strongly when the stock markets are bearish. That’s because many investors seek alternatives, especially those that involve ownership of a hard asset, when markets are not performing well.

Most types of alternative investments have a relatively high risk profile and promise high returns. You may have to lock up your funds for several years to earn those returns, and there’s no guarantee that you will earn them at all. These investments can be capital intensive, requiring a large initial outlay. Buying and selling can be difficult, so you may not get a quick exit when you need cash. 

Types of Alternative Investments

As an individual investor or as a beginner, you may do well to restrict yourself to one of the following alternative investments if you are looking to add them for portfolio diversification. Start with the one you understand best. Once you’re comfortable with it, consider adding others.

Some of the more popular forms of tangible and intangible alternative investments include: 

P2P Lending 

A number of online P2P lending platforms, such as Prosper, LendingClub and Peerform offer loans for personal use, business use, and almost any other need. Mintos operates in Europe, and Funding Circle serves the US and the UK. YieldStreet allows participants to make loans secured by collateral, which reduces risk.

All of these services allow you to join an investor pool and lend your money to qualified borrowers for a return that will typically be higher than what you’d earn from a traditional savings vehicle. 

Real Estate

Real Estate Investing is one of the most popular forms of alternative investment. You may consider buying and owning a property, such as a house or an apartment complex, and collecting rent from the tenants. If you wish to avoid the responsibilities of a landlord, you may hire a property manager. Remember that managers cost money, and will cut into your returns!

Online investing platforms such as Fundrise and PeerStreet are also gaining popularity. These platforms allow you to invest in residential properties without the typical responsibilities of a landlord. REITs also offer a way to invest in real estate without the entry barriers and liquidity restraints of direct investment in real estate.

Gold 

Many people see gold as an excellent portfolio diversifier and a tangible hedge against the risks of inflation. In times of unforeseen economic challenges, gold has historically performed the role of a rescue asset, rising in value when other assets fall. You can invest in physical gold coins or bars, or invest in gold accounts, gold ETFs, or participate indirectly by investing in stocks of gold mining companies. 

Equity Crowdfunding 

Equity crowdfunding platforms, such as Wefunder, AngelList, SeedInvest, and CircleUp in the US or CrowdCube and Seedrs in Europe allow you to invest in startup companies that are offering shares in order to raise funds.

Investing 101: Alternative Investments For Beginners

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If a startup you have invested in succeeds over time, you can make enormous returns on your capital. However, if the startup fails (Forbes Magazine reports that 90% of startups fail) you risk losing your entire investment. Equity Crowdfunding lets you take on the role (and the risks) of a Venture Capital firm with only a moderate investment.

Cryptocurrencies

Digital currency assets like Bitcoin have been delivering astronomically high returns for a small number of investors. However, the extremely volatile nature of crypto assets makes them a risky alternative investment. The concept behind the usefulness, security and value of cryptocurrencies is highly abstract. They are popular today but there’s no assurance that they will be tomorrow. The current high valuation of many cryptocurrencies may indicate that the fad has run its course.

Crypto Interest Accounts

Cryptocurrency interest accounts let you earn interest on your cryptocurrency holdings. You’ll allow someone else to use your crypto keys, and in return they’ll pay you interest. Many of these accounts pay substantially higher interest than normal savings accounts, with payouts on some accounts reaching 8-12% per year. It’s important to note that these accounts are not insured by the FDIC. Some accounts may have a lockup period after your first deposit and accounts often limit withdrawals, so if the value of your cryptocurrency turns down you may not be able to sell as fast as you’d like.

Popular Crypto interest account providers include BlockFi, Celsius Network, Nexo, and Compound. Each has its own advantages and disadvantages, so you’ll want to do some research before making a decision.

Collectibles

Collectibles include everything from fine art to wines, coins, stamps, and almost anything else that people are willing to pay for. Investing in art is one of the most popular forms of investment in collectibles, but there are many other options. In most cases collectibles are not highly liquid, and it may be difficult to find a buyer when you want to sell. You’ll need to have either professional advisors or a high degree of expertise in the particular field you’ve chosen.

If you want to invest in collectibles without committing large sums, look into Masterworks, a platform that allows you to buy a fraction of a high-value artwork. You won’t be able to hang the piece in your living room, but your shares can be bought and sold and you can mitigate the risk of sole ownership.

Commodities

Dozens of commodities are traded on US exchanges, ranging from oil of gold to wool, rubber, and various grains and food products. Most fall into four broad categories: metals, energy, agricultural, and livestock and meat.

There are several ways to trade commodities, including futures contracts, options, and commodity-focused ETFs. The value of commodities can be affected by many factors, and many of those factors are unpredictable. That makes commodities trading risky, but there are profits to be made if you have the expertise. You will need to study commodities trading for some time before you’re ready to trade, as the processes are complex.

Private Equity Funds

Private equity funds combine the potential gains of private equity investing with the diversification of a mutual fund. These funds pool money from multiple investors and invest it in dozens or hundreds of selected startups, with the diversification providing some cushion against the risks of startup investing

Consider the AngelList Access Fund or the Seedrs EIS100 Fund. Some private equity funds are limited to high net worth investors, and minimum investments may be substantial.

Agriculture and Farmland

Agriculture is an industry with inherent potential: everyone needs to eat, and growing populations and nations emerging into prosperity push food demand and prices up. Investing in agriculture can be complicated, especially if you don’t plan to own and operate a farm. There are still ways to do it.

The simplest way to invest in agriculture is through exchange-traded funds like the Van Eck Vectors Agribusiness fund (NYSEARCA: MOO) or the Invesco DB Agriculture fund (NYSEARCA: DBA), which invests in agricultural commodity futures. These and other funds invest in a variety of agricultural enterprises, giving you a diversified agriculture portfolio with a single investment.

There are several other options for investing in farmland. AcreTrader allows you to purchase shares in farmlands, and crowdfunding platforms like Harvest Returns, Farm Together, and FarmFundr link investors to agricultural enterprises that seek financing.

Income Annuities

An income annuity delivers a monthly income stream in return for a fixed investment. You invest a lump sum and receive monthly payments, often for life. Individuals in or approaching retirement often use income annuities to supplement their retirement income.

Income annuities may involve committing a substantial sum, and you should consult a financial professional to determine which product suits your needs best.

Treasury Securities

Treasury securities are fixed-income investments issued by the United States government, and are considered to be among the most secure investments you can make. Because of that security interest rates may be low, especially when the overall interest rate environment is low. Treasury securities still have a place, especially for investors with a low risk tolerance.

Treasury Securities are usually divided into short-term Treasury Bills (T-Bills), mid-term Treasury Notes (T-Notes), long-term Treasury Bonds (T-Bonds), and Treasury Inflation-Protected Securities (TIPS). Each has its own term and payout system, but in each case you are lending money to the US Government. The interest rate may be low, but you will receive it and you will get your money back when the term of the investment is up!

Certificates of Deposit

Most banks and credit unions offer certificates of deposit, often called CDs. These accounts require you to commit funds for a specific period of time. In return you’ll get a higher interest rate than most savings accounts offer. You’ll pay an interest penalty if you withdraw the money before the time period expires. CDs are insured by the FDIC and are a highly secure way to save money. Many people use CDs to save for a specific purpose that dictates when the money will be used, like a tuition payment or a down payment on a house.

Some CD users opt for a CD ladder, which uses multiple CDs with different maturity dates to assure regular availability of funds. Ask your bank, credit union, or other CD provider for details.

Invest in Online Business

Many people start online businesses and find that they are not in a position to sustain them or maximize their potential. These businesses are often for sale, sometimes at quite affordable prices. If you’re considering starting an online business, buying an existing one can save you a lot of work and time.

As with any decision to go into business, you’ll need some time and some expertise to choose and evaluate an online business that’s been offered for sale. You’ll need to understand the business niche and the underlying technology, and you’ll need to review the financials carefully. Choosing the wrong business could mean a lot of time and energy put into making the website and the business viable. Choosing the right one could be a short route to online profits.

These are very different investment instruments, but they all have one thing in common. If you plan to invest, you’ll need a strong understanding of your chosen alternative investment.

Knowledge is power, and these are not investments to make casually.

Pros and Cons

You should objectively evaluate the strengths and limitations of alternative investments before making a decision to buy.  

Pros of Alternative Investments

These are some of the advantages of alternative investments.

Tax Benefits

Some types of alternative investments may offer sheltered or tax advantaged cash flows. Favorable long-term capital gains tax treatment and pass-through depreciation are two distinct tax benefits to consider in some of these investments. If you become a part-owner of a private syndicate or fund in an alternative investment, the tax benefits (such as a deduction for depreciation) will get passed on to you directly. 

The tax status of alternative investments and their earnings can be complicated, and you’ll need to consult a tax professional to be sure you’re assessing them correctly.

Opportunity for Exceptional Returns 

Alternative investments are often parts of less efficient markets, which increases the possibility to earn exceptional returns. Sometimes the market conditions may favor a particular asset class, give you the chance to profit from it.

For instance, after the 2008 financial crisis, some cash-rich investors purchased deeply discounted real estate assets and made substantial profits over a short period.

Greater Sense of Satisfaction and Control

Special skills, knowledge, or experience in a particular alternative asset class can give you the opportunity to profit. In addition to the financial gains, you can also get a sense of emotional and intellectual satisfaction. For instance, if you a deep understanding of a newly emerging technology and you invest in a startup in that area, you are likely to enjoy the entire process of valuation, funding, mentoring, and taking ownership, apart from gaining strong returns.

Many alternative investments are best suited to individuals who have this deep area-specific knowledge.

Cons of Alternative Investments

Alternative investments can also have significant risks and disadvantages. These are some of the most prominent.

Risk of Adverse Tax Consequences

Some alternative investments can also carry negative tax consequences.

For example, you may be considering entering into a private partnership as an investor. Although the partnership structure allows for pass-through taxation, the deed may not have the mandatory clause for tax distribution. In this case, you may end up with a large tax bill, which you’ll have to pay out-of-pocket even when the partnership has not distributed any cash during the assessment year.

Complex investments often require the attention of tax and legal specialists, which can be a significant expense.

Risks Arising from Lack of Transparency

Many alternative investments carry extra risks arising from a lack of transparency.

For example, when you invest in commingled funds or pooled structures, it can be difficult to recognize your risk levels without complete information. Prior to the 2008 financial crisis, some bank-sponsored funds indulged in “window dressing” and sold risky assets in ways that made the deals look completely safe to the buyers. In reality, the buyers were exposed to risky alternative assets that were completely wiped out when the crisis occurred. 

Alternative asset markets may not be as thoroughly regulated as major investment markets, and information may be limited or unreliable.

Risks of Complexity of Investment

Alternative investments are often highly complicated. This makes it difficult to determine their actual underlying value.

For example, unless you have specific knowledge about exotic assets, such as art, antiques, or rare wines, you may not understand their real worth and their market demand patterns. This increases your risk of buying at a time when the valuations are peaking. These complex investments are inherently characterized by low liquidity, and their exit from some types of assets may be restricted. 

Many alternative assets get the most attention when they are at peak or near-peak values, which is also the worst time to buy them: the idea is to buy low and sell high, and that’s hard to do unless you have a very clear idea of actual and potential value.

If an alternative investment is in the news, it’s probably not a good time to buy it!

Final Word 

When considering alternative investments as a beginner, you should focus on avoiding get-rich-quick schemes, scams, and completely new or unproven investments. Avoiding mistakes is far more crucial to preserving and growing your capital than making big winning moves.

Alternative investments can be an effective way to diversify your portfolio and hedge against downturns in traditional asset markets. They can generate significant returns. They also present unusual risks, and they require specialized knowledge. If you have real expertise in a specific asset class, and if you have money to afford to commit to speculative investments, you may wish to explore them further. If not, you may wish to wait until you’re ready.

The post Alternative Investments: What Are They, Types, Pros & Cons appeared first on FinMasters.

In this post, we look at the reasons for a gold investment, how to invest in gold and the pros and cons of doing so. Investing in gold can be a controversial topic, so we have tried our best to keep things balanced, and include both the opportunities and the risks of gold investments.

A Brief History of Gold

Both gold and silver have been used as currencies and financial instruments for at least two thousand years. It is believed that gold was used for decorative purposes over 40,000 years ago, and that gold was the first metal that was used by man. Precious metals were already widely known, used, and valued when the first coins came into being.

Prior to using gold as a form of money, crops and livestock were used as a store of value and a medium of exchange. However, using these commodities as a currency presents all sort of logistical problems. Objects like sea shells and feathers were also considered, but lacked the durability something of value requires.

Gold was an obvious choice to replace these primitive currencies. Its scarcity meant a small quantity carried significant value. It was durable, it could easily be divided into small quantities, and it could be minted into individual “units”. 

The earliest known coins, which were made of a mixture of gold and silver, were used in what is modern day Turkey approximately 2,600 years ago. Until not long ago, gold and silver have continuously been used as currencies ever since.

Gold, silver, and various forms of gold-backed paper money remained the primary monetary system until the second world war. In the period since then, the global monetary system has moved away from precious metals, although most central banks still hold some gold reserves.

By decoupling currencies from gold, governments have been able to more effectively use monetary and fiscal tools to manage their economies. However, money that is not backed by gold is also more prone to inflation. The increase in the global money supply has led to concerns of instability and hyperinflation in the future.

What Is Gold Worth? Supply, Demand and the Price of Gold

Gold does not generate cash flows in the way that real estate or a company does. This means it cannot be valued, and the price is purely a function of supply and demand. The major swings in the gold price are often the result of speculative demand, which in turn depends on sentiment and inflation expectations. However, beyond this demand there is also an underlying relationship between supply and demand.

As more gold is extracted from the earth, the cost of extraction rises. This is simply because the remaining gold is harder to reach. Each gold mine has a cost of production (COP), so when the gold price falls below that COP, the mine is no longer profitable. If this happens the mine may suspend production or halt new investments. The net effect is that as the gold price falls, the supply of new gold coming into the market slows.

On average, about 50% of the gold produced each year goes to the jewelry industry. In addition, 5 to 10% of production is used by technology industries. The remainder of the demand comes from sources that could be considered speculative: central banks, investors, and speculators.

The point here is that there is still residual demand beyond the more speculative demand. And, as the price falls this residual demand increases. So, while we can’t “value” gold, we know that there is a stabilizing relationship between supply and demand. 

Gold Investment as an Inflation Hedge

One of the key arguments for a gold investment is as a hedge against inflation. Central banks can effectively print as much paper money as they want, and rising money supply can lead to inflation. On the other hand, we know that the relationship between gold’s supply and demand is relatively stable, which means its “value” can’t be debased. 

History has shown that over long periods of time gold has maintained its purchasing power. Over short periods of time, its purchasing power has fluctuated about as much as its price.

When we talk about inflation, we are talking about the purchasing power of currencies. It’s important to point out that while gold has maintained its purchasing power far better than currencies, over the last 150 years, stocks have done an even better job. If your only goal is to beat inflation, stocks have proven to be a better hedge. However, as we will see, there are other compelling reasons to invest in gold.

Gold Investment as Portfolio Hedge

A gold investment has a very solid track record as a portfolio hedge. If you are investing in stocks, you can reduce portfolio risk by adding safe haven assets to your portfolio. Safe haven assets, which include precious metals, bonds and cash, are assets with stable values.

The prices of risk assets, like equities, are closely tied to global growth and economic stability. The price of these types of assets usually falls when a recession is expected or when market volatility increases. When this happens, capital usually flows to safe haven assets. T

This is known as flight to safety. This negative correlation between risk assets and safe haven assets can be used to reduce the volatility of an investment portfolio. 

The charts below show the effect of allocating between 0% and 50% of a portfolio to gold, with the rest allocated to stocks. For gold we are using the GLD ETF and for stocks we are using the SPDR S&P 500 ETF (SPY). The first chart illustrates the extent to which investing in gold would have reduced the downside risk of an equity portfolio during the global financial crisis in 2008.

The second chart illustrates the extent to which a gold investment reduced volatility during the COVID-19 correction in 2020.

The two charts above show how investing in gold reduces portfolio volatility during equity market corrections. However, it’s important to note that over long periods of time, including gold in a portfolio has resulted in lower overall returns. The following chart, which includes both corrections, illustrates the performance of the four portfolios from 2008 to 2021.

Gold Investment as Hedge Against a Global Financial Collapse

The world has never really experienced a complete collapse of the financial system. We are talking here about a catastrophe that results in banks and institutions not being able to operate. This would obviously have catastrophic consequences for the economy and financial assets could lose most of their value.

It’s impossible to assign a probability to this scenario. It’s probably not zero, but it’s probably quite low. During the last few market crashes, central banks have shown a willingness to do whatever it takes to make sure there is liquidity in the system. They have also shown they are prepared to bail out banks and institutions if necessary.

Perhaps the bigger risk is the fact that so much of the financial system is now electronic, and the fact that cybercrime continues to rise. If there is a complete financial meltdown, cyberterrorism might be a more likely cause. But again, the probability is probably quite low.

So, is gold a good investment as a hedge against a scenario like this? Prophets of doom have been warning about the imminent collapse of civilization for decades – and gold is often touted as the only solution. If there is a financial meltdown, gold would almost certainly retain its value better than other assets. But there are also practical issues to consider – like buying everyday goods when all you have is a one-ounce gold coin. The good news is that investing in gold as a portfolio hedge should give you some protection against this “end of the world” type scenario. 

One thing to consider is that unless you hold physical gold that is actually in your possession, it may be difficult or impossible to actually claim your gold holding in the event of systemic collapse. Holding gold in your possession exposes you to possible theft or loss, which is probably more likely than a global economic collapse!

6 Ways of Investing in Gold

There are now several ways to invest in gold. These range from owning physical gold to “paper gold” and gold stocks. Each type of gold investment comes with its own advantages and disadvantages.

1. Gold bullion
2. Gold coins
3. Gold jewelry
4. Gold ETFs
5. Gold derivatives
6. Gold mining stocks

1. Gold Bullion

Gold bullion is the traditional way to own relatively large quantities of gold. The word bullion actually refers to bars, ingots and coins. For gold bars to qualify as bullion they must have a known purity (usually above 90%) and must be produced by accredited refiners.

Gold bars range in size from 1 gram to 400 ounces, so a gold bar can be worth anywhere from $60 to $735,000. Larger bars usually need to remain stored in approved vaults to retain their provenance. Smaller bars can be stored in a vault or wherever the owner chooses.

2. Gold Coins

Buying gold coins has been the traditional way for most investors to invest in gold. Gold coins of various types have been around as long as gold has been used as a currency. They allow investors to accumulate small quantities of gold over time.

It’s important to know that there are two very different categories of gold coins. The first category is gold bullion coins like American Gold Eagles and Krugerrands. These coins are made of pure gold or 92% gold alloy and generally contain one ounce of gold. They are minted by government mints. These types of gold coins often trade at a small premium to the gold price, but their prices track the gold price closely. Owning these coins is the same as owning gold bars and a direct investment in the price of gold. 

The second category consists of numismatic, rare, and limited-edition coins. The price of these coins reflects the gold they contain as well as a premium that reflects their age and rarity. Investing in these types of coins is more like investing in antiques. Investing in these coins requires specialized knowledge and caution is advised.

3. Gold Jewelry

Buying gold jewelry can also be considered a form of gold investment. But, just like rare and numismatic coins, there is more to the value of jewelry than the gold it contains. In the case of jewelry it’s usually the aesthetic qualities that contribute to the value. Investing in gold jewelry gives you added utility, which is probably worth something. You just need to remember that the premium you pay will always be subjective, both when you buy it and when you sell it. 

4. Gold ETFs

Exchange traded funds (ETFs) have emerged as a very convenient way of investing in gold. ETFs are vehicles that trade on the stock market, just like any other share. Gold ETFs are trusts that own physical gold stored in a vault. They allow you to hold your gold investment alongside your stock portfolio in a trading account.

Gold ETFs are cheap to trade and own, and eliminate the need to worry about storage, insurance or transport. The SPDR Gold Shares ETF (GLD) is the largest ETF that tracks the gold price, and was briefly the largest ETF in the world. There are similar ETFs listed on most major exchanges.

5. Gold Derivatives

Futures, options and CFDs (contracts for difference) based on the price of gold are another way to trade gold. These instruments are all derivatives that can be traded on margin, which allow for leverage. Derivatives are probably the best instrument for active traders, but not necessarily for investors.

6. Gold Mining Stocks

Investing in the shares of companies that mine gold is an indirect way of investing in gold. Gold mines have relatively stable costs, while their revenue fluctuates according to the gold price. In most cases, gold stocks offer leveraged exposure to the gold price – their profits rise faster than the gold price when it rises, but fall faster than the gold price when it falls. Some gold miners have fairly predictable cash flows, while others are very speculative. The more stable companies have low production costs, which means that they remain profitable even when the gold price falls. 

More speculative mines, known as marginal miners, have higher production costs and are at risk of losing money if the gold price declines. Junior miners are companies involved in exploration and development of mining operations, and are even more speculative. The following are prominent examples of gold mining companies in various categories along with their US stock tickers. Be aware that some of these companies may have exposure to other precious metals too.

• Largest gold producers
• Lowest cost gold producers
• Junior and marginal gold producers
• Gold royalty and streaming companies

Largest Gold Producers

• Newmont Corporation (NYSE: NEM)
• Barrick Gold (NYSE: GOLD)
• AngloGold Ashanti Limited (NYSE: AU)

Lowest Cost Gold Producers

• Kirkland Lake Gold (NYSE: KL)               
• B2Gold (NYSE Arca: BTG)              
• Centerra Gold (NYSE: CGAU)                 

Junior and Marginal Gold Producers

• Yamana Gold (NYSE: AUY)
• DRDGOLD (NYSE: DRD)
• Seabridge Gold (NYSE: SA)

Gold Royalty and Streaming Companies

Another category of gold stocks are royalty and streaming companies. These are companies that provide capital to gold producers in return for royalties or a percentage of the gold produced. These companies have less exposure to the risks and costs associated with gold mining. Some examples of royalty and streaming companies include:

• Franco-Nevada (NYSE: FNV)
• Wheaton Precious Metals (NYSE: WPM)
• Sandstorm Gold (NYSE: SAND)

There are also a few gold miner ETFs to consider:

• VanEck Gold Miners ETF (NYSE Arca: GDX)
• VanEck Junior Gold Miners ETF (NYSE Arca: GDXJ)

Investing in Gold Stocks vs. Investing in Gold Itself

Gold stocks can generate higher returns than gold itself, but gold stocks are also a lot more complicated than simply investing in gold. There’s a lot more to a gold miner’s profits than the gold price. You must also consider a producer’s cost of production, gold reserves (the amount of underground gold a mine has access to), labor costs and the balance sheet. In addition some gold mines are in countries with significant political and legislative risk. Some mines hedge their exposure to the gold price, and this also needs to be considered.

Investing in the largest gold producers will have slightly more risk than gold itself, along with more upside potential. These companies are well diversified with mines around the world, and have relatively low production costs. Investing in the junior and marginal gold stocks requires a lot more knowledge, research and time – and carries a lot more risk. Junior gold miners are definitely not suitable for buy and hold investing.

This chart illustrates the relative performance of the gold price represented by the GLD ETF and the GDX ETF since 2006 when it was launched. As you can see, gold stocks underperformed the gold price by a significant margin. However, it is worth noting that this has been an historically difficult period for gold miners and gold mining shares.

The Physical Gold vs. Paper Gold Tradeoff

ETFs like the SPDR Gold Shares fund are probably the most convenient and cheapest way to trade and own gold. Gold ETFs, futures and other instruments based on the gold price are sometimes referred to as paper gold. Some investors who invest in gold as a hedge against the stability of the financial system believe paper gold is almost as risky as other financial assets. There is some truth to this as you cannot trade ETFs and futures if exchanges don’t open for business. More skeptical investors even question the existence of the gold held by ETFs.

On the other hand, investing in gold bullion or coins requires storage, security and insurance. There are also logistical issues to consider when you buy or sell physical gold. And there’s an argument to be made that if you own physical gold that is stored at a financial institution, all you really have is the receipt which is once again like paper gold. The alternative is to store the gold yourself in a safe or hidden somewhere. Ultimately, there is no single best way to invest in gold. It really comes down to your reasons for a gold investment and your preference for convenience.

Is Gold a Good Investment Compared to Silver?

Some precious metals investors prefer silver to gold. There are pros and cons to both, which can be summarized by the following points:

• Investing in gold has delivered higher returns over the long term.
• Silver has more industrial uses, and is used by the growing solar energy industry. This means demand may rise as economies grow, but also means recessions could dampen demand.
• For several reasons, the silver price is more volatile, and is likely to remain so.
• Gold is preferred by central banks.

So, is gold a good investment compared to silver? With lower volatility and higher long-term returns, gold is probably a better asset to own over the long term. However, if you track the precious metal market closely, you may identify periods when silver makes more sense.

Is Gold a Good Investment Compared to Bitcoin?

The emergence of cryptocurrencies, and notably Bitcoin, have given investors a new asset class to consider. Bitcoin is often referred to as digital gold – but is it really? The correlation between Bitcoin and speculative assets remains very high. This suggests that Bitcoin is really a speculative risk asset, while gold is the opposite. Bitcoin returns increase when risk appetite rises, while gold returns increase when risk appetite falls.

Investing in Bitcoin is really an investment in an emerging technology and monetary system, and a speculative one too. It could also be considered a hedge against a total collapse of the financial system. But it hasn’t proved to be a very good hedge against portfolio volatility, and the high volatility also outweighs its ability to hedge inflation.

In the last decade, the returns from Bitcoin have eclipsed the returns from gold. Whether this continues in the future remains to be seen. When comparing the two, you really need to consider your goals and see the two as very different assets.

Pros and Cons of Investing in Gold

There are pros and cons to investing in any asset, and gold is no exception. We can summarize the case for investing in gold by listing these pros and cons.

Pros of Gold Investments:

• Gold has a long history as a tradeable asset, and has a proven track record as a store of value. As a real asset, the value of gold is not linked to the financial system. 
• Gold has also proven to be an effective safe haven and portfolio hedge during periods of market instability.
• The increase in the global money supply is leading to growing concern about inflation and the stability of the monetary system.
• Cybercrime continues to increase, and the global economy is becoming more digital and connected. This means there is more at stake from a major cyberterrorism incident.
• If you hold gold as a permanent hedge in your portfolio, you do not have to rely on market timing to avoid volatility.

Cons of Gold Investments:

• Gold doesn’t generate profits, dividends or rent.
• Because gold doesn’t generate yield, it can’t really be valued. The price of gold fluctuates with supply and demand, and is prone to speculative bubbles. 
• If Bitcoin or another cryptocurrency becomes an integral part of the financial system, it may live up to its promise as a form of digital gold. This could make gold a less compelling investment.

Is Gold a Good Investment in 2022?

To get an idea of how the gold price may perform in 2022, we need to go back to the first half of 2020. During the first few months of the COVID-19 pandemic, the gold price rallied as much as 30%. This move was largely driven by speculation and the fact that central banks were “printing” money at unprecedented rates. This created a situation where most of the potential buyers were already long, and there were few buyers left to take the price higher. Some of the buying was done with leverage, which meant there were forced sellers when the momentum ran out.

The result has been that the gold price has underperformed other asset classes for most of the last 18 months. The strong performance of cryptocurrencies and growth stocks also resulted in little interest being shown in gold. Global inflation is now the highest it has been in decades. Whether it remains high, or declines remains to be seen.

As various forms of quantitative easing come to an end, there is some risk that gold becomes less attractive. However, this is probably offset by the fact that ending quantitative easing is likely to lead to more stock market volatility. Predicting a massive rally in the price of gold would be pure speculation. However, as of early 2022, there are a few compelling factors in gold’s favor:

• Gold probably carries a lot less risk now than it did during the speculative rally in 2020. 
• At the same time, equity market volatility has increased and there are fears of further downside. 
• Recent volatility in the cryptocurrency market make gold a more compelling hedge against inflation or a financial crisis.
• With rates rising, bonds are also becoming less attractive safe haven assets.

All of this suggests gold is very well positioned as a hedge against other asset classes in 2022. The possibility of further inflationary pressure would add to the case for gold.

Conclusion: Is Gold a Good Investment?

At any given time there will be market pundits predicting gold’s imminent raise to $5,000 and higher. This is pure speculation, but there are other good reasons for gold investments. The most compelling reason to invest in gold is as a hedge against portfolio volatility and potential inflation. What are your views on gold as an investment? Please let us know in the comments below.

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What Are Commodities and Why Would You Invest in Commodities?

Commodities are an important part of industry and trade, and you’ll see them everywhere, from the fuel we use in your car to the food you buy in supermarkets to the raw material used to build pretty much anything in this world.

Perhaps some of the most well-known commodities out there are gold, silver, crude oil, natural gas, soybeans, and corn. Wikipedia has a comprehensive list of traded commodities for your reference.

Some of these commodities, like gold, act as a hedge against the stock market. One of the most successful investors in the world called Ray Dalio created a portfolio structure called the All-Weather Portfolio. The idea of this portfolio is that its makeup will perform reasonably well under all market conditions.

In that portfolio structure, a part of it includes commodities because when the stock market goes down, commodities, like gold, tend to go up in price, as they are considered safe-havens, and vice-versa.

How to Invest in Commodities

How do you trade commodities? There are several ways to trade commodities. Some of the most well-known ways to trade commodities are to buy futures contracts, options, ETFs that track commodity prices, or even buying some of the raw materials yourself.

If you want to buy gold, you could just go to a gold specialist shop and buy gold. That is obviously more expensive because the gold has been processed and the shop needs to make money from it too. On top of that, you still have to store the gold yourself, which is not safe.

Conclusion

When trading commodities, be mindful that they are somewhat risky to invest in. That’s because commodities can be affected by uncertainties that are difficult to predict. Examples of uncertainties could be weather events like flooding and wildfires, epidemics that could spread diseases on something like soybeans, and wars that can dramatically influence the price of crude oil.

When chosen carefully, though, commodities can help create a balanced portfolio.

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Collectibles fall within the realm of speculative assets. They are considered speculative assets because the outcome of your investment in them is highly uncertain. For you to sell, you will need a buyer willing to pay the price you’ve set for the asset without any underlying cash flow. 

Collectibles are generally illiquid assets. That means you can’t convert them back to cash easily, as there is no daily market transacting these assets. You are expected to buy and hold for the long term before considering selling.

Should we then invest in collectibles at all? We’ll explore the two most popular options below.

Artwork

Some companies are starting to enable investing in shares that represent a collectible – artwork in particular.

One example is Masterworks. They are the first investment platform for Artwork. With Masterworks, you can purchase shares representing ownership of a painting similar to how you would purchase shares in a traditional company. These are fine art pieces, and the expected return on investment, as per their website, could range between 8% and 20% of median annual returns.

They showcase art pieces from artists like Keith Haring, Andy Warhol, and Zao Wou-Ki on their platform.

Wine

Another popular way to invest in collectibles is to invest in wine. But is this a profitable investment?

According to a paper called The Price of Wine, published in 2014, the real financial return of wine between 1900 and 2012 was 4.1%, which exceeded government bonds, art, and investment quality stamps.

They also mention the following survey results:

A recent survey by Barclays (2012) indicates that about one quarter of high-net-worth individuals around the world owns a wine collection, which on average represents 2% of their wealth.

Not all wines are created equal, so choosing the right wines is the key. The paper proposes a model for the price dynamics of wine, taking into account several inputs.

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Maybe you’ve been collecting art since forever, and somewhere along the way, you started getting serious. Should you think of art as an investment? And if so, what do you need to know in order to go from appreciating and enjoying art to making smart investment decisions? Let’s explore when and how art can be a good investment for you.

Invest in Art With Money You Can Afford to Lose

This is the first rule of art investing, or any investing where your return is not guaranteed. This is not investing in a low-risk mutual fund. If art is something you are passionate about, there is nothing wrong with collecting it. As an investment strategy, you need to think about it as a long-term alternative investment. Wealth is built when you have your financial bases covered and can begin to dabble in investments where the risk/reward calculations are more dramatic. If you are investing in art, you have to be prepared to have your money tied up for a long time or even to lose it.

Advantages of Investing in Art

Investing in art has some distinct advantages compared with other asset classes. 

• You have a physical asset. With art, you have something to show for it. It’s not just a number in an account somewhere. It’s not a portfolio of companies you don’t really know much about being looked after by a fund manager. 
• Art brings pleasure. You can display artwork proudly in your home and enjoy it and share that enjoyment with friends and family who visit.
• Consistent value. This may surprise you, but art is not volatile the way stocks and other asset categories can be. There are no guarantees, but the art market tends to be fairly stable over the long haul. 
• Reliable gains. The data show that well-selected art portfolios tend to appreciate over time.

You’ve got to choose wisely, and you’ll need to have a good eye for art and a good sense of the market, but art does tend to gain value over time.

Disadvantages of Investing in Art

Make no mistake, there are also disadvantages in the art market, and you will have to consider them before investing.

• Art is not a liquid asset. You can’t quickly cash out on a Monet, so if you think you might need your money in a hurry, this is not the place to park it.
• You’ve got to know your stuff. You either have to know a great deal about art or put your trust in an expert who can make wise decisions on your behalf.
• Art needs proper storage and maintenance. This is not something you can just store and forget about. Art needs to be carefully displayed or stored and, when necessary, restored by people who really know what they are doing. But you need to be careful here, too. Even great restoration can negatively impact the value of a work of art.

Art that the market accepts as collectible typically appreciates over time, sometimes dramatically. The challenge lies in selecting pieces and artists who are or will be accepted as collectible. That requires detailed knowledge of both art and the art market.

How to Invest in Art?

Art investing is very personal and needs to be a hands-on endeavor. Here are a few things to keep in mind in the investment process.

• Know the artists. Learn about the artists whose work you’re considering. Does their work have a track record of increasing value? Are they new and getting buzz in the art world? 
• Authenticity is key. If the artist is still living, determining authenticity is not complicated. If they and their representatives claim it, it is an authentic piece. For artists who are no longer living, get a reliable certificate of authenticity.
• Get an appraisal. You want the value of your pieces to go up, and that starts with paying the right price. You’ll need to pay an appraiser, but knowing the value of a piece ahead of the purchase is crucial to making a sound decision. 
• Buy originals for the best odds on a positive return on your investment. There is a market for prints (copies of a painting that are high quality and on a limited run) but they may or may not appreciate in value. 
• Know the dealer. It can be difficult to find information on small-scale art dealers but do as much due diligence as you can. Check the dealer’s reputation. Most galleries and dealers will have information about past exhibits and works they have represented. If you can find previous customers, they can be a great resource.

Galleries and auction houses are going to put the most positive spin on artists and the value of the work. As much as possible, seek independent verification of the artist’s background, the authenticity of the work, and its current value.

Where to Purchase Art?

Keeping all of the above in mind, where you purchase a work of art is important. Here are the most typical venues for art purchases and what to look for as you purchase with an eye toward long-term investment value.

(When) Is Art a Good Investment?

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Auction House

For making a calm, rational decision, an auction may not be the best place for purchasing works of art for investment. Unless you have the discipline to go in with a budget ceiling and stick with it, a bidding war can escalate the cost of a work beyond what you had intended to pay. Also, this is a scenario where you want to have your research buttoned up ahead of time. You want to know everything you can about the artist, the work you are interested in, and the auction house itself before signing in and picking up that numbered paddle. 

Gallery

For a clear-headed art purchase, a gallery is the better choice. After the research is done, a purchase at a gallery can be made without the heightened drama that can accompany an auction purchase. 

Online 

The popularity of the purchase of art through online galleries and auctions is increasing every day. Just make sure you are purchasing from a reputable source, and follow all the research and data collection guidelines – which you will probably be doing largely online anyway.

Direct From the Artist

If you are personally acquainted with artists you believe in, buying work directly from them can provide valuable support to an emerging artist and can be a way to get great deals on potentially valuable pieces. Just be sure that your personal connection to the artist is not coloring your judgment. These purchases are likely to be high on the risk scale.

What Medium Is the Best Investment?

When we think of investments in works of art, most of us think of paintings. We think of masterworks hanging in the Louvre, the Whitney, the Tate, or other famous museums. 

According to Widewalls, the medium is much less important than understanding the market. So while the most popular media for collecting and investing are paintings, drawings, photography, and sculptures, the medium is not the main concern in your investment strategy.

Tools for Understanding and Exploring the Art Market

If you are just getting started in collecting and investing, here are some tools that can help you understand the current market better.

• Magnus is an app that collects data on art. In this age where knowledge is at our fingertips, a way to find out about artwork in real-time can be a valuable tool. When you see a piece that catches your eye, there might be some data available.
• Art Market Research is your source for more general information on art market trends. From fine art to handbags and rare whiskey, there’s a market for that. Understanding the year-over-year trends can help you assess the appreciation potential of a piece you’re considering.
• Masterworks allows you to dip a toe into the market by purchasing a share in works of “blue-chip” artists. The fractional ownership system is similar in some ways to platforms like Fundrise, which invests in a portion of a commercial real estate property.
• Artemundi is one example of an investment fund dedicated to helping people manage art portfolios. With a number of funds to join, account management services, and appraisal services, companies like this can be a helpful resource to the serious collector. 

This is a sample of the resources available to a beginning art collector. We’re not endorsing any of them, and if you plan to invest in art, you should explore as many options as possible and examine all of them critically.

Is Investing in Art Right for You?

Art is not an asset class for everyone. And if you may need that money to pay the bills in the near future, this kind of investment is not for you. But if you appreciate art and are looking to diversify your investment portfolio, art may be an interesting and valuable path forward for your long-term investment goals.

(When) Is Art a Good Investment? is a part of our guide Alternative Investments For Beginners. Read up on other popular types of alternative investments:

• Investing in Art: (When) Is Art a Good Investment?
• Real Estate Investing For Beginners
• Investing in an Online Business 
• Investing in Commodities
• Crypto Interest Accounts
• Investing in Collectibles

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What Exactly Is Bitcoin and Blockchain?

Bitcoin is a good place for a primer on cryptocurrencies to start. Bitcoin was the first cryptocurrency, and most other crypto assets and blockchains are variations on the original principle. If you understand the basics of Bitcoin, you will find it easy to understand other crypto assets and networks.

Bitcoin is a decentralized cryptocurrency that exists on a decentralized ledger known as a blockchain. Every Bitcoin transaction and the number of Bitcoins held by each address is recorded on the blockchain. A Bitcoin address is like an account at a bank and tells us who owns what.

The blockchain is updated by “nodes” which are computer programs that store and process transactions. Bitcoin is decentralized, so anyone with enough computing power can download the software and run a node. Nodes that process new transactions are known as “miners”, and these nodes are rewarded with newly “mined”  Bitcoin when they add transactions to the ledger. Transactions are added to the blockchain in batches, or “blocks” of around 1,700 transactions.

Mining nodes solve cryptographic problems to “win” the right to update the next block. The transactions they add to the blockchain also need to match the transactions proposed by more than 50% of the other nodes. This ensures there is always consensus and prevents double spending and fraud. When the first block was mined, the reward was fifty Bitcoins – but this figure is halved every few years and is now down to 6.25 coins per block. Approximately 144 blocks of transactions are processed each day.

Bitcoin and the Bitcoin network were launched in early 2009 by Satoshi Nakamoto, the actual identity of whom remains a mystery. Nakamoto mined the first block on January 3rd, 2009 and created the first 50 Bitcoins. As of February 15th, 2022, the ledger is on block 723,467 and 18.9 million Bitcoins have been mined.

What Is the Value of Bitcoin?

Bitcoin does not have an intrinsic value like other assets do, as it does not generate cashflow or profits. However, supply is limited. There are only 18.9 million Bitcoins in existence so far, with just 900 new coins being added each day. The block reward will continue to halve until there are 21 million Bitcoins at which point no more Bitcoins will be created.

If supply is limited, and demand rises, the price must rise until supply and demand are in equilibrium. So, the price of Bitcoin really comes down to demand. The limited supply is one of the factors that differentiates Bitcoin from conventional currencies, also known as fiat currencies. These currencies are controlled by central banks, and the supply can be increased at any time, which causes inflation.

When Bitcoin was launched, few people knew about it and there was very little demand. This is the reason it took six months for the price to reach just 9 cents, and another four years to reach $100. However, demand grew as more people learned about Bitcoin, and the rising price supported the case for investing. Most of the demand for Bitcoin comes from traders, speculators, and investors. These sources of demand are very sensitive to sentiment.

But there is also an important use case: transferring value. Individuals, FinTech platforms and institutions can “use” Bitcoin as a method to cheaply and quickly transfer value from one entity to another. This is important as this type of demand is not influenced by sentiment.

In the past, it was retail investors that accounted for most of the demand for Bitcoin. However, this is beginning to shift to institutions and FinTech platforms. Ultimately, if demand for Bitcoin continues to rise, the price will likely rise over the long term – though there will of course be peaks and troughs along the way. 

Ethereum and Decentralized Applications

By now you should have a basic idea of what Bitcoin is. Ethereum, or Ether, was the 18^th digital coin to be launched, and it is now the second most valuable cryptocurrency, and possibly the most interesting of them all. The Ethereum network is an example of a network that added entirely new use cases to the concept behind Bitcoin and the blockchain.

Ethereum’s blockchain isn’t just a ledger for transactions involving Ether. Autonomous applications can also run on it, which makes it like a massive, decentralized supercomputer. These applications are governed by “smart contracts” that also reside on the network.

The Ethereum network creates an environment where DApps (decentralized applications) consisting of software and smart contracts can operate on the network without the control of any single entity. Examples of DApps that can run on the network include games, marketplaces, and exchanges. 

The key difference between a DApp and any other application is that the DApp is not hosted on a centralized server, and it is not controlled by any single entity. The Ethereum network effectively rents processing power to the DApp by charging transaction fees. DApps can in turn charge users for access to the application, or a transaction fee. In fact, DApps can issue their own digital coins to fuel their own platform economy.

Networks like Ethereum allow for entirely different types of applications and organizations. This means businesses, platforms and software can exist and be directed by a community of users and developers, rather than by shareholders or a traditional management structure. 

Example: Decentralized Applications (DApps)

Cryptocurrencies are traded on exchanges. These exchanges are either centralized or decentralized, with the latter being a good example of a DApp. Coinbase is an example of a centralized exchange. The platforms (there are several) are owned by a company. Like most companies, Coinbase has a management team, staff, offices, equipment and expenses to pay.

A decentralized exchange (DEX) is a DApp that exists as software and smart contracts on a blockchain like the Ethereum network. This means a DEX avoids many of the costs a centralized exchange would incur. 

A DEX, and most other DApps, will typically have its own token, which is required to access the platform, pay fees, or even to buy and sell other virtual currencies on the exchange. DApps like this are usually set up by a team of developers who are incentivized to add value to the platform, thereby increasing the value of its native token.

Types of Digital Assets

There are no “official” categories for cryptocurrencies, but we can classify them according to their primary use. In many cases, virtual currencies can have multiple use cases that give them value.

• Crypto coins – The first group of digital assets are those that primarily act as a medium of exchange (MOE) or a store of value (SOV). This group includes Bitcoin, Bitcoin Cash, and Litecoin. This category could be referred to as pure cryptocurrencies, coins, or digital currencies.
• Utility tokens – Networks like Ethereum and DApps can issue their own tokens which are required to access the service. These types of tokens are sometimes described as utility tokens as they provide their owners with utility. However, these tokens can act as an MOE or SOV too – as is the case with Ethereum. The term altcoin is used in various ways. Sometimes it may refer to any cryptocurrency that isn’t Bitcoin.
• Stable coins – There’s no denying the fact that most cryptocurrency prices are volatile. Stable coins are cryptocurrencies that are designed to have very low volatility. Most are backed by the US dollar and their prices are typically close to $1 at all times. Other stable coins use a system of collateral to reduce volatility. Stable coins offer crypto investors a place to keep their capital in the ecosystem while diversifying into less volatile assets. They also facilitate trading on decentralized exchanges which can’t accommodate trading in fiat currencies. Tether (USDT), USD Coin (USDC) and Binance USD (BUSD) are the leading stable coins.
• Non-fungible tokens – NFTs are unique items that can be stored on a blockchain. By storing a digital asset on a blockchain, its ownership, ownership history, and authenticity can be verified. See below to learn more about NFTs.
• Asset backed tokens – Asset backed tokens are digital tokens that are backed by real world assets like real estate, commodities and stocks. This is a grey area for cryptocurrency markets as the link between a blockchain and a real asset is dependent on the legal system. There has been limited progress in this area, but it holds potential for the future. In theory, all financial market assets and real estate could eventually reside on a blockchain.

What Is DeFi?

DeFi stands for Decentralized Finance, an emerging and alternative financial system. DeFi applications aim to use blockchain technology to replace the intermediaries that traditionally act as middlemen for financial transactions. Other DeFi applications are designed to solve challenges unique to the crypto industry. Some examples of DeFi applications include:

• Decentralized exchanges
• Peer-to-peer lending
• Yield farming
• Insurance
• Synthetic assets and derivatives
• Providing liquidity
• Stable coins

DeFi applications typically operate on the Ethereum network and rely on smart contracts for governance.

Example: DeFi

BlockFi is a well-known DeFi platform that provides users with several services. Besides a wallet and trading platform, BlockFi offers users several ways to earn a yield on their crypto assets.

In addition, you can apply for a Bitcoin credit card. This allows you to spend money against your Bitcoin holdings and earn 1.5% back on each purchase. BlockFi also provides loans using crypto assets as collateral. This means you can borrow money while continuing to hold your digital currencies.

Prominent Cryptocurrencies

Bitcoin (BTC) and Ethereum (ETH) are the dominant cryptocurrencies and together account for over 60% of the total market value of all cryptocurrencies. The following is a list of other prominent and interesting cryptocurrencies. This list is by no means complete or a list of recommendations. For a complete list of crypto assets have a look at the CoinMarketCap website.

• Binance Coin (BNB) is the native token for Binance, which is a major cryptocurrency exchange. Binance Coin resides on the Binance Chain blockchain and is used to pay for various services on the platform.
• Ripple (XRP) is a payments network designed for interbank payments. XRP is the token used to transfer value between entities. XRP does not run on a blockchain but on a network of servers controlled by banks, so some believe it is not a true cryptocurrency.
• Polkadot (DOT) is a protocol designed to act as a bridge between other blockchains. Developers can also use Polkadot’s chain to create their own blockchain that inherits features from the Polkadot chain.
• Cardano (ADA) is similar to Ethereum in that it allows for DApps and smart contracts to run on the network. The Cardano network uses proof of stake (POS) rather than proof-of-work (POW) to validate transactions.
• Litecoin (LTC) was one of the earliest cryptocurrencies and was designed to improve on certain aspects of the technology behind Bitcoin. Like Bitcoin, Litecoin is primarily a store of value and medium of exchange.
• Solana (SOL) is another popular blockchain for developers to build DApps on. Solana is similar to Ethereum in many ways but boasts faster processing speeds and lower transaction fees.
• Uniswap (UNI) is a protocol that facilitates transactions between different cryptocurrency tokens. UNI is the native token used to transact on the network.
• Monero (XMR) is a cryptocurrency with a focus on privacy. Monero is one of the oldest digital coins on this list and was designed so that transactions on the network cannot be traced.
• IOTA (MIOTA) is a blockchain designed for the internet-of-things. Developers can use it to build applications that allow devices to communicate and make micropayments to one another.
• Stellar (XLM) is a decentralized network that facilitates the transfer of value between fiat and digital currencies. Lumens are the tokens used to transact on the network.

How to Invest in Cryptocurrency

Before you can invest in a cryptocurrency, you will need a wallet to store your digital assets. You will also need to choose an exchange or broker to trade with.

• Cryptocurrency wallets, public and private keys
• Crypto exchanges, brokers and apps
• Non-fungible tokens

Cryptocurrency Wallets, Public and Private Keys

Each address on a blockchain consists of a public and a private key. The public key is the address someone would use to send bitcoin or another digital asset to you. The private key is like a password that you need if you want to send your Bitcoin to another address.

A wallet is used to access your cryptocurrencies and keep them safe. You don’t actually store your digital assets in the wallet as they only really exist on their respective blockchains. Instead, the wallet is used to store your public and private keys, and to interact with the blockchain. Most people use software wallets like the Coinbase Wallet or MetaMask. You can also use hardware wallets like Ledger which are not connected to a computer and add an extra level of security.

Some wallets can be used with multiple crypto assets, while others are only compatible with a specific cryptocurrency. When you set up your wallet, make sure you follow the instructions carefully to ensure that you do not lose your private keys.

Note: If you trade on some centralized exchanges like Coinbase, you do not need to have a wallet as the exchange operates more like a stock broker. You already have a wallet included with your account on the exchange. You can however send your coins to your own wallet.

Crypto Exchanges, Brokers and Apps

You can buy and sell cryptocurrencies on various different types of platforms. These include:

• Centralized exchanges like Coinbase and Binance.
• Decentralized exchanges like IDEX and dYdX.
• Brokers, including Robinhood and eToro.
• Payment platforms like Square’s Cash App and PayPal.

If you are making your first Bitcoin transaction, the choice of platform probably won’t make a big difference. However, in time you may prefer an exchange that better suits your needs. Active traders and serious investors prefer to trade on exchanges as the fees are lower than they are for brokers and other platforms.

Decentralized exchanges are more complicated to work with, so they are probably best avoided until you are comfortable with the crypto market. Exchanges for digital assets vary widely in terms of the coins you can trade, the fiat currencies you can fund an account with, and account funding methods. 

Non-Fungible Tokens

NFTs are the latest type of crypto asset to capture the world’s attention. Assets like Bitcoin and US dollars are fungible as each unit is exactly the same as every other unit. NFTs represent assets that are not identical to any other assets, and so non-fungible.

The NFTs that gained popularity in 2021 were mostly digital artworks and copies of tweets, which exist as jpeg files. These NFTs are individual blockchain tokens that includes information like the name of the creator, the creators signature and the date the NFT was minted. The media file itself cannot exist on a blockchain, but the NFT will usually include a hyperlink to the asset itself.

These types of NFTs allow artists to monetize their artworks, and allow ownership to be authenticated. This is important for digital art (images, audio and video) that can easily be copied. But there are also lots of reasons to be somewhat skeptical about these types of NFTs. Although the individual NFTs are unique, there is no limit to the number of NFTs like this that can be produced. Many of these artworks are computer generated, and one collection can include thousands of artworks.

In addition, an NFT may give official ownership of an artwork to one person, but that doesn’t stop anyone else copying it. The earliest NFT artworks may well retain some value due to the fact that they were the first to be minted. NFT’s like the signed copy of Jack Dorsey’s first tweet should also retain value due to their rarity.

However, it’s difficult to find a reason for millions of other NFT jpegs to retain any value if they have no utility. When an NFT has utility, it becomes a different story. The real potential for NFTs becomes apparent when they give their owner utility.

Example: NFTs With Real World Utility

An example of an NFT with utility is Bored Breakfast Club. This is a collection of 5,000 NFTs that come with a free coffee subscription. NFT holders will have unique coffee blends delivered to them, wherever they are in the world, for free. 

The NFTs include a digital image of a breakfast scene made up of 200 individual traits. The artworks are inspired by the popular Bored Ape Yacht Club NFT collection. NFT ownership comes with the right to receive free, unique coffee blends roasted by Yes Plz Coffee. If an NFT is sold, the right to receive coffee transfers to the new owner. 

Initially, NFT holders will receive two bags of coffee, spread out over a two-month period. After that, shipments will be made when there are enough funds in a community fund, the Community Coffee Wallet. This community wallet is funded by royalties on NFT sales in the secondary market like OpenSea, coffee sales and merch sales.

More NFT Use Cases

The Bored Breakfast Club is a good example of the potential for NFTs. In this case, the NFT and artwork are really a ticket that provide access to a subscription service. 

There are lots of other potential use cases for NFTs, with many of them tying in with the emergence of Web3 and the Metaverse. NFTs are already starting to make an impact in digital worlds like video games. For years, objects in these virtual worlds have been traded for real money. NFTs create a mechanism to do this securely, and to transfer digital assets between digital environments.

As the Metaverse evolves, unique digital assets will become more important, ubiquitous and valuable. These could include digital real estate, avatars and access passes. NFTs are a compelling way to authenticate ownership of these assets. There are also several compelling real word use cases for NFTs. One example is event tickets which are often the subject of fraud and scams. If event tickets are issued as NFTs, they cannot be illegally sold or copied.

NFTs can also be used to protect intellectual property including images, music, videos and software. They can be used to track and pay royalties to creators. Creators can also sell their work as an NFT with additional utility. As an example, a musician could sell an album as an NFT that also gives the holder free entrance to future concerts.

Apart from these examples, NFTs can be used to track items with supply chains, to authenticate documents and credentials, and for vehicle licensing. As you can see there is a lot more to the potential for NFTs than digital art. In the future even more use cases are likely to emerge as the digital economy evolves. In fact, NFTs and asset backed tokens could become an essential link between digital and physical worlds. 

7 Ways to Make Money From Cryptocurrencies

There are lots of different ways to make money in the crypto and blockchain industry.

1. Direct Cryptocurrency Investments
2. Cryptocurrency Derivatives
3. Non-Fungible Tokens
4. Yield Farming and P2P Lending
5. Cryptocurrency Mining
6. Cryptocurrency Funds
7. Cryptocurrency Stocks

1. Direct Cryptocurrency Investments

The first and obvious option is to build a portfolio of cryptocurrencies, or to trade them actively.

2. Cryptocurrency Derivatives

You can now trade futures and options on Bitcoin and Ether on several exchanges including the world’s largest financial derivatives exchange, the Chicago Mercantile Exchange (CME). A lot of brokers now offer CFDs (contracts for difference) on a range of cryptocurrencies.

Derivatives like futures, options and CFDs, allow you to trade with leverage and to open short positions on cryptocurrencies like Bitcoin. However, with all the crypto market volatility we would advise you to be very cautious about trading with leverage.

3. Non-Fungible Tokens (NFTs)

As mentioned, the NFT market is still evolving so there should be plenty of different opportunities to invest in the future.

4. Yield Farming and P2P Lending

Some cryptocurrencies can pay you interest. Generally this involves lending your coins to a miner or validator to help them increase their stake. The validator then shares the rewards they earn for validating transactions. This process is known as yield farming. Peer-to-peer lending is another way to earn interest on your crypto assets.

5. Cryptocurrency Mining

Crypto mining is not as easy as it used to be as the costs of doing so have risen dramatically. Nevertheless it can still be profitable if you go about it the right way. The barriers to entry are lower if you invest in a cloud mining pool. However, these mining pools need to be investigated thoroughly. In general, you should develop a good understanding of the industry before diving into mining.

6. Cryptocurrency Funds

It is possible to invest in the largest cryptocurrencies using a stock trading account. There are three types of crypto funds that can be traded on the stock market.

The first of these is ETFs (exchange traded funds). It has taken a long time for crypto ETFs to receive regulatory approval – and there’s still a long way to go. At this stage, the only Bitcoin ETF in the US holds Bitcoin futures rather than Bitcoin itself. This fund is the ProShares Bitcoin Strategy ETF (NYSE: BITO).

The second type of funds are ETNs (exchange traded notes). These differ from ETFs in that the assets are not held in a trust, but on the balance sheet of the issuer. ETNs offer more flexibility than ETFs, but come with some counterparty risk. Most of the cryptocurrency ETNs are listed in Europe. Examples include the VanEck Bitcoin ETN (listed in Germany) and the 21Shares Ethereum ETP (listed in Switzerland).

The third type of funds are closed end listed investment trusts. These are similar to ETFs, but have a fixed number of shares in issue. This means that the price is dependent on supply and demand and can vary substantially from the value of the underlying assets.

The Grayscale Bitcoin Trust (US OTC: GBTC) is the best-known closed end crypto fund. This fund traded at a large premium to the NAV for years, but is now trading at a discount. Grayscale also manages various other single coin funds and two multi coin funds.

7. Cryptocurrency Stocks

There are also quite a few publicly listed companies that derive all or some of their earnings from cryptocurrencies or the blockchain industry. The companies listed below are involved directly in crypto mining, or hold substantial digital assets on the balance sheet.

• MicroStrategy Incorporated Class A (NASDAQ: MSTR)
• Riot Blockchain Inc (NASDAQ: RIOT)
• Marathon Digital Holdings, Inc. (NASDAQ: MARA)
• HIVE Blockchain Technologies Ltd (TSXV: HIVE)
• Galaxy Digital Holdings Ltd (TSX: GLXY)

There are also lots of companies, including Nvidia, CME Group, Block (Square) that offer partial exposure to the industry. You can also invest in several ETFs that invest in companies involved in blockchain technology and cryptocurrencies. Examples include:

• Amplify Transformational Data Sharing ETF (NYSE Arca: BLOK)
• First Trust Indxx Innovative Transaction & Process ETF (NASDAQ: LEGR)
• VanEck Digital Transformation ETF (NASDAQ: DAPP)

How to Evaluate a Cryptocurrency or Crypto Project

Investing in cryptocurrency should be approached with caution. While the most successful cryptocurrencies have generated massive returns for early investors, they have also exhibited extreme volatility. In addition, countless cryptocurrencies have seen their prices decline with little chance of recovery. There are now over 5,000 cryptocurrencies to trade, but there probably isn’t room for nearly that many digital currencies.

For long-term investors, sticking to the largest coins has proved to be a winning strategy. This doesn’t mean that a new or small project can’t succeed, but the chances of failure are a lot higher for small projects. Unfortunately, the crypto market has also become a platform for scams, fraud and money laundering – see below. Whether you are investing in tokens, NFTs or any other crypto asset, you should carefully evaluate each project. This will become even more important as the market matures.

First of all, it’s important to make a distinction between trading and investing. Trading is short term in nature and based entirely on supply and demand. As long as demand for an asset remains strong, a short-term trade can be profitable regardless of the long-term viability of the asset.

If you are investing, which typically means for six months or longer, you will need to look beyond current market hype. As an investor, you should be considering the value of the asset and how that may change over time. Digital assets may not have an “intrinsic value” but there are factors that affect their perceived value. The technology and use case behind a crypto project are obviously important, but you should also consider the following:

• Sustainable demand – For any asset to appreciate over time, their needs to be sustainable demand for that asset. Ideally demand should come from multiple sources – including users – and not just from speculators.
• Community – Community strength has emerged as an important indicator of the success of crypto projects. Hype doesn’t guarantee success, but a project that can’t build up a following is likely to struggle regardless of its other attributes. Community strength is especially powerful when it is “organic”, and not paid for with giveaways, paid media coverage etc. Bitcoin and Ethereum do not have marketing departments – instead they rely on a community of users and developers to spread the word.
• Competitive advantage – For any coin to succeed, there needs to be a clear competitive advantage. A lot of Bitcoin’s success can be attributed to the fact that it was the first and has always been the most valuable. For Dogecoin, the fact that Elon Musk likes it is a huge advantage. 
• Incentives – Another important aspect of a project is the way incentives are aligned between various stakeholders. During the ICO (initial coin offering) craze of 2017, project founders were often incentivized to sell out and leave the project, rather than see the plan through. If incentives are aligned, there is more chance that the community will work together.

How to Avoid Cryptocurrency Frauds

Various types of scams and frauds are becoming increasingly common in the crypto space. This is often the case with new industries that are not fully regulated and have new projects popping up every day. You can reduce the risk of becoming a victim of scams, cybercrime and fraud by following these guidelines:

• Make sure the people behind a project are real. Try to find their social media profiles and make sure there is a history and more than a few connections. A reverse image search on Google will usually tell you very quickly if someone’s identity is fake.   
• Don’t leave large amounts of digital assets in an exchange account. Use a hardware wallet for extra security if you have more than 10% of your assets in crypto.
• Be very careful with any hyperlink you receive via email, via Discord or in a chat room. Phishing scams often use websites that look very real to trick people. 
• Likewise, be careful with anything that appears to be free or too good to be true.
• In general, stick to coins, projects and exchanges that are established and well documented. The smaller or less well known a project is, the more skeptical you should be.

Conclusion

This guide to cryptocurrency investing is just a starting point, but hopefully it has given you a good foundation for further research. We should probably still regard cryptocurrencies as speculative investments. However, the physical and digital economies are beginning to converge.

Cryptocurrencies and blockchain technology are an essential building block for the economy of the future – which means they shouldn’t be ignored either. What are your thoughts on investing in cryptocurrency? Do you think that at some point all assets will be tokenized? What is your favorite cryptocurrency or NFT any why? Let us know in the comments below.

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