7 Ways To Invest in Web3 in 2023

Now that we have a better idea of what Web3 actually is, let’s look at a few of the best ways to invest in it!

1. Buy Web3 Stocks

Perhaps the easiest (although not the best) way to get exposure to Web3 is through the stock market. Let’s now look at a few companies that are heavily invested in Web3 technology.

  • Nvidia (NVDA)

    Nvidia manufactures graphic processing units (GPUs), which are vital in the development of Web3 technology. Another popular chip manufacturer building Web3 is Advanced Micro Devices (AMD).

  • Coinbase: (COIN)

    In order to participate in Web3, you must first own cryptocurrency. Coinbase is the largest cryptocurrency exchange in the US. Additionally, Coinbase has recently released a Web3 self-custody crypto wallet. Self-custody wallets are the gateway to Web3.

  • IBM

    IBM is deeply invested in blockchain technology and Web3.

2. Buy Web3 ETFs

ETFs are always a great way to diversify away single stock risk. Here are a few ETFs with exposure to Web3.

  • Amplify BLOK

    Amplify’s BLOK ETF invests in companies involved in the blockchain space. Its top holdings include Microstrategy (MSTR), GMO Internet Group (GMOYF), and Coinbase (COIN).

  • Siren BLCN

    Siren’s Nasdaq NexGen Economy ETF seeks to track the NASDAQ Blockchain Economy Index. This ETF has a lot in common with BLOK. Its top holdings include Coinbase (COIN), Marathon Digital (MARA), and Microstrategy (MSTR). BLCN is a passively managed fund while BLOK is an actively managed fund.

  • Grayscale Ethereum Trust: ETH

    Grayscale’s ‘ETH’ ETF seeks to passively track the performance of ether (ETH), which is the native cryptocurrency of the Ethereum mainnet. Ethereum is the predominant blockchain powering Web3, so exposure to this crypto is a must for any investor looking for Web3 exposure. It is worth noting that because of its ‘trust’ structure, Grayscale’s ETH does not track the price of ether 1×1; huge discounts often occur.

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3. Invest in Crypto Coins & Tokens

If you want direct exposure to Web3 and blockchain, your best bet is to invest in the crypto market directly. This can be done by purchasing digital currencies (crypto coins and tokens).

📚 Read: Crypto for Beginners

Crypto coins represent the native currency of a blockchain network (bitcoin is the coin behind the Bitcoin network) while crypto tokens represent the currency of decentralized applications built atop a blockchain network, usually Ethereum.

Since Bitcoin does not store smart contracts, its presence in Web3 is limited. Ethereum is the single best crypto investment to make in Web3 as this blockchain validates and stores the majority of data and transactions that occur in Web3. Web3 is also being built on alternate blockchains like Solana (SOL) and scaled on layer 2s like Polygon (MATIC).

📚 Read! Layer 1 vs Layer 2 Scaling Solutions

New to crypto investing? Check out our list of free research tools here!!

Most Popular Crypos by Market Cap

Here are the most popular crypto coins according to CoinMarketCap:

  1. Bitcoin (BTC)

  2. Ether (ETH)

  3. BNB (BNB)

  4. XRP (XRP)

  5. Cardano (ADA)

And here are the most popular tokens in the DeFi space: according to DeFi Llama:

  1. Lido (LIDO)

  2. Maker (MKR)

  3. Aave (AAVE)

  4. Curve Finance (CRV)

  5. Uniswap (UNI)

📚 Read: 11 Best Defi Crypto Coins to Buy In 2023

How to Buy Crypto

tasty offers users two ways to invest in ETH (and other cryptos!):

  1. Buy crypto on the tastytrade platform

  2. Buy crypto on the tastycrypto self-custody wallet

Note: When you store your crypto in a self-custody wallet, you alone have access to your private keys. Storing crypto in a self-custody wallet also gives you access to hundreds of different tokens and allows you to interact with decentralized applications, or dApps!

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Some of the most popular Web3 tokens to buy power decentralized finance, or ‘DeFi’ protocols. Let’s learn about DeFi next!

4. Invest in DeFi

DeFi (decentralized finance) is revolutionizing the way the world interacts with money. Like all blockchain activities, DeFi is run by smart contracts that operate on a peer-to-peer ecosystem.

If you have a self-custody wallet, you can participate in financial activities usually reserved for the elite. Here are just a few ways you can make money in DeFi:

  1. Stake crypto: If you own a proof-of-stake crypto (like ether) you can stake this crypto and earn rewards. Staking helps to validate transactions and allows blockchains to advance. Staking rates are usually paid in an ‘API’, and work a little like interest being paid in a bank account.

  2. Lend crypto: DeFi protocols like Aave allow investors to lend out their crypto to other participants in ‘pools’. Crypto lenders are paid an interest rate usually far superior to lending rates at traditional banks for lending crypto.

  3. Become a market maker: In DeFi, anyone can be a market maker by depositing two cryptocurrencies into a ‘liquidity pool’. As traders buy and sell from your designated pool, you earn passive income in fees.

5. Invest in NFTs

Non-fungible tokens (NFTs) are non-interchangeable, representative digital assets that are stored on a blockchain network that can not be copied. Most people associate NFTs with digital art collections like Bored Ape Yacht Club and CryptoPunks.

However, the use cases of NFTs extend far beyond art.