Cryptocurrencies are one of the most lucrative asset classes in the world – soaring in popularity and value over recent years. As an inherently volatile and speculative asset class, cryptocurrencies can provide the unique opportunity to generate life-changing wealth over a short period of time, although not without extreme risk.
Overexposure to cryptocurrency has some grave dangers. Crypto has an uncertain regulatory future – it is unclear how future regulations will impact the price or longevity of different crypto assets. Secondly, cryptocurrency is extremely volatile, often fluctuating by large amounts over a short period of time. This factor can create a significant financial burden for investors with short-to-medium financial obligations if crypto enters a sustained downturn. Crypto is extremely speculative. The great majority of current projects will die in the long run, many of which with no real use cases.
To avoid overexposure, prudent investors will diversify their portfolios across other asset classes. Diversification not only minimizes the risk associated with crypto but allows investors to capture growth in other industries. The following discussion will explore some of the best crypto alternatives you can invest in today.
Real Estate
Real estate is one of the most popular alternative investments in the world and is easily one of the best crypto alternatives. It can enhance your portfolio by offering cash flow, competitive risk-adjusted returns and a hedge against inflation. One of crypto's greatest advantages is that it offers a vareity of different ways to make great passive income. Real estate is one of the greatest investment vehicles for passive income and is often much safer than crypto. Historically, real estate has been a reliable long-term investment as home values tend to rise over time. Here are a few of the best ways to invest in real estate:
REITs
A real estate investment trust (REIT) is a perfect option for investors who want exposure to real estate without a traditional real estate transaction. A REIT is formed when a corporation invests money from investors to buy and operate income properties. REITs are a solid investment for stock market investors that desire regular income, investors seeking high liquidity or investors who do not have the capital to buy a property individually.
Residential or Commercial Rental Property
Owning rental properties is a great opportunity for individuals with significant capital, patience with tenants and do-it-yourself (DIY) renovation skills. Rental properties provide regular income and can appreciate in value over time. However, a key drawback is that managing tenants can be tedious and stressful.
Arrived Homes is a great alternative platform for investors with less capital to spend. The platform allows investors to invest in shares of rental homes starting from $100 and earn passive income in the process.
Tokenized Real Estate
Tokenization, with respect to real estate, is the process of developing a digital token to signify ownership of a type of real estate asset. With the advent of blockchain technology, real estate tokenization is providing an opportunity to steer clear of the illiquid, bureaucratic and inaccessible characteristics of the traditional system.
HoneyBricks is a great way that investors can invest in high-quality commercial real estate opportunities through asset-backed security tokens with most of the same advantages of traditional real estate. The real estate investments are each tokenized on the Ethereum blockchain, allowing for fractional ownership, the distribution of security tokens directly to investors’ digital wallets, and easy dissemination of passive income from the properties. It offers a fantastic selection of properties you can invest in that each have extensive breakdowns of their pros and cons. The minimum investment varies by the property but they can be as low as $100.
Precious Metals
Precious metals include assets such as gold, platinum, silver and more. These precious metals can be coins with a numismatic value or simple bullion (often stored as bars). Precious metals are popular investments because they’re often regarded as non-correlated assets (however, the level of correlation depends on the rest of your portfolio).
Precious metals are valuable because they’re scarce, have industrial use cases or possess investment properties that make them an excellent store of value. Here are a few precious metal investments to consider.
Gold
Gold is the most popular and investable precious metal. It’s valuable for its scarcity, shaping capability, durability (it doesn’t corrode) and ability to conduct heat and electricity. In fact, gold gave rise to the concept of money itself, through its portable, private and permanent characteristics.
Throughout history, gold has been a widely accepted store of value. It also serves as an effective hedge against economic or political turbulence and as a hedge against rising inflation. You can find numerous ways to invest in gold. Investors can purchase gold stocks (shares of gold mining, royalty or streaming companies), gold-focused ETFs or gold-focused mutual funds.
Birch Gold, Red Rock Secured and Augusta Precious Metals, world-leading precious metal platforms, are three fantastic options for getting started. All 3 platforms allow investors to convert an existing IRA or eligible 401(k) into a retirement account backed by physical gold and silver. They each offer all the most popular precious metals in various forms, sizes and coins.
Silver
Silver is the second most popular investable precious metal. Like gold, it's also used as a store of value to make silverware, jewelry, coins and bars. It’s an important industrial metal used in the electronics, electrical and photography industries. Silver’s dual role as an industrial metal and store of value makes it a more volatile alternative to gold. Silver is available on most of the best precious metals companies including Augusta Precious Metals, Red Rock Secured and Birch Gold.
Art
The art market has been one of the hottest alternative investment crazes in recent years and is another one of the best crypto alternatives. If an up-and-coming artist goes on to a successful career, the cash value of their work can explode. An Art Basel annual report estimated that the global art market sales in 2021 reached over $65 billion in 2021. Here are a few ways to invest in art.
Online Art Marketplaces
Until recently, fine art as an investment has been almost entirely exclusive to the rich. Online art marketplaces completely changed this. They great starting point for investing in art because traditional artwork is illiquid and can present difficult maintenance and storage obstacles for novice investors.
Masterworks is a clear frontrunner online option, especially for the inexperienced art investor because it does most of the work for you. With Masterworks you can easily invest in slices of all kinds of art, including art made by legendary artists including Picasso, Banksy and Basquiat. Masterworks purchases artwork and offers shares to investors while keeping you informed of the investment's status.
Non-Fungible Tokens (NFTs)
NFT art is a digitized piece of artwork that a person has tokenized onto a blockchain. No physical copies of these digital files exist; rather, they are only available online, where investors and art buyers can buy and sell them.
NFT art provides proof of ownership, allows collectors to monetize their work without the intervention of third parties, and helps collectors distinguish the original from its copies. NFT art can be purchased from NFT marketplaces such as OpenSea, X2Y2, Blur, Looksrare and more.
Fine Wine
Buying wine can be an excellent source of diversification, providing investment returns with little to no correlation to traditional assets. The value of wine depends on a variety of factors such as harvest yields, weather patterns, vintage and consumer trends, all of which intersect with demand and supply. Since most of these factors are unrelated to the stock and crypto market, wine investments are a great complement to a portfolio.
There are a few popular ways to invest in wine apart from buying individual bottles. Investors can buy wine shares – an easy and liquid way of gaining exposure to the wine industry. Larger investors can work with online services such as Vinovest, which allows investors to build diversified wine portfolios. Lastly, investors can invest in wine funds and futures.
Equity Crowdfunding
Equity crowdfunding provides investors with a great alternative investment opportunity by helping them fund businesses for a stake in the company, often via an online alternative investment platform. The slice of equity received by each investor is proportional to the amount of cash invested. Equity crowdfunding is one of the best crypto alternatives because of it's high profit potential.
Equity crowdfunding can be a great way to broaden an investment portfolio and has minimal capital requirements. StartEngine is the leading crowdfunding platform available by a long shot with a great selection and easy-to-use user interface. It is important to note that equity crowdfunding is a high-risk investment because the majority of startups fail in the long term.
Should I Diversify With the Best Crypto Alternatives
It is generally considered best practice to avoid overexposure to crypto (and really any kind of investment) by diversifying across other asset classes. Diversification helps lower your risk and is one of the best ways to weather the crypto market's ups and downs while maintaining the potential for growth in the long-term. This assumes that you are investing in some of the best crypto alternatives, however. You still need to diversify into strong assets like the ones described above.
Please note that none of the guidance in this article is financial advice. Not even the most strategically diversified portfolios guarantee success.
- Exclusive Crypto Airdrops
- Altcoin of the Week
- Insider Interviews
- News & Show Highlights
- Completely FREE