Investing in Blockchain

A guide to blockchain’s place in banking, investment, and digital finance

Reviewed by Cierra Murry

Since Bitcoin first appeared in 2009, distributed ledger and blockchain technology have progressed from a niche curiosity to increasingly core elements of financial systems, supply chains, and digital ecosystems. As individuals and institutions alike come to embrace cryptocurrencies, smart contracts, and decentralized applications (dApps), new investment vehicles—from thematic ETFs to blockchain-based tokens—are proliferating.

This article offers a guide to current investment opportunities and future developments for investors interested in this fast-paced technological area. 

Key Takeaways

• Blockchain has broadened beyond just cryptocurrencies.
• Investors now choose among spot‑crypto ETFs, tokenized real‑world assets, DeFi yields, NFTs, and crypto‑linked equities—each with its own risk/reward profile.
• Real-world applications for blockchain also span multiple industries, from finance to supply chain management to real estate.
• Keep an eye on CBDC rollouts, AI-and-blockchain convergence, modular/L2 architectures, and strategic crypto reserves as the sector’s future growth drivers.

Understanding Blockchain

At its core, a blockchain is a distributed database spanning multiple computers that records transactions into sequentially-linked blocks secured by cryptographic methods. The distributed architecture effectively removes the need for trusted third parties by creating a transparent ledger where data, once recorded, cannot be altered retroactively. This breakthrough solved the thorny “double-spend” problem, meaning that digital tokens could not be copied (“counterfeited”) or transactions altered or deleted.

Bitcoin’s blockchain relies on a consensus mechanism known as proof-of-work (PoW), where so-called “miners” compete with one another to solve cryptographic puzzles (hence, “crypto”), a process which also serves to verify transactions. When a miner successfully solves the puzzle, they add a new block of transactions to the chain and also receive freshly minted bitcoins as a reward. This process (which occurs approximately every 10 minutes) protects the network from attackers or other bad actors.

Unlike many newer blockchain platforms, Bitcoin relies on a relatively simple protocol that intentionally limits programmability to enhance access and security. This conservative approach has helped Bitcoin maintain its reputation as the premier blockchain network, with no successful attacks on its core protocol since its inception.

Beyond Bitcoin

However, Bitcoin is just one example of how a blockchain can be deployed, and the ecosystem has undergone significant transformation since 2009. Ethereum, for instance, brought to the fore advanced smart contract features that allow for programmable transactions and automatic execution of agreements without any third-party involvement.

The technology has evolved to support complex decentralized applications (dApps), which enable new digital economies and governance frameworks beyond basic value transfers. Today, businesses in the health care, real estate, and logistics sectors—in addition to the financial industry and others—utilize blockchain technology to protect information, digitize property ownership, and monitor transactions to cut down on fraudulent activities and operational inefficiencies. 

Where Blockchain Is Being Used

Global cryptocurrency market value sits at $3.45 trillion as of mid-2025, with Bitcoin alone commanding over $2 trillion of that capitalization. But as a sector, the blockchain market—encompassing infrastructure providers, enterprise platforms, middleware vendors, and protocol developers—has grown into a multi-billion-dollar industry valued at nearly $50 billion in 2025, and projected to reach upwards of $216 billion by 2029.

Indeed, while cryptocurrencies still dominate the headlines, blockchain’s practical applications extend far beyond digital money. Here are just a few examples:

• Retail giants like Walmart (WMT) use blockchain technology to track their supply chains, which allows them to detect contaminated or defective products within seconds instead of days.
• Health care organizations are starting to explore blockchain applications for securing patient medical records, as well as drug supply chain validation and clinical trial management.
• In real estate, blockchain can streamline property transfers and title searches.
• Enterprise software companies like IBM (IBM), Microsoft (MSFT), Oracle (ORCL), and Amazon Web Services (AMZN) deliver blockchain-as-a-service (Baas) solutions to organizations so they can implement them without building their own systems.
• Financial institutions benefit from more secure and expedited cross-border payments and interfirm settlements of over-the-counter (OTC) trades.
• Decentralized finance (DeFi) removes traditional financial institutions from their role as intermediaries in favor of peer-to-peer (P2P) transactions. The idea is to allow people to take control of their finances with digital wallets, peer-to-peer lending, and other financial services via fintech applications.
• Insurance companies are experimenting with smart contracts to automate claims processing and customer payouts.
• Luxury goods and collectibles can receive tamper-proof certificates of authenticity together with auditable provenance.
• Web3 platforms deliver a decentralized internet by enabling peer-to-peer data storage via protocols such as IPFS and Filecoin, token-based governance through DAOs, trading unique digital assets via NFTs, and data monetization in decentralized marketplaces.
• Several governments are piloting blockchain-based systems to issue digital identity cards, maintain records, and secure online voting. For example, Estonia’s e-Residency program uses blockchain to securely manage digital identities, while Sweden is testing blockchain for land registry records.

Web 3

Web3 refers to proposed improvements to the current internet infrastructure using blockchain technology. While there’s significant hype around Web3, its practical implementation is still in the early stages and faces ample challenges.

Cryptocurrencies: Owning Coins Directly

A cryptocurrency is a native digital token secured by public‑key cryptography and a distributed ledger. Bitcoin (BTC) remains the monetary bellwether; Ethereum (ETH) underpins most smart‑contract activity; and stablecoins such as USDC and USDT track the U S. dollar. Beyond these, thousands of “alt‑coins” compete in niches from privacy (Monero) to AI infrastructure (Fetch.ai).

Where To Buy

• Centralized exchanges (CEXs): Coinbase, Kraken, and Bitstamp serve U.S. and EU investors; Binance remains the global volume leader, though it faces regulatory constraints in several jurisdictions. Purchases settle within minutes in an exchange‑hosted wallet, but you typically hold IOUs until you withdraw.
• Decentralized exchanges (DEXs): Uniswap, Curve, and PancakeSwap let you trade peer‑to‑peer from a self‑custodial wallet such as MetaMask or Ledger. Slippage and gas fees vary by blockchain.
• Payment apps & brokers: Apps like PayPal, Venmo, and Revolut; and brokers like Robinhood offer limited coin access that can be cashed out or transferred only in some regions.

Key Risks

Exchange bankruptcy (for example Mt. Gox and FTX), wallet hacks, lost private keys or seed phrases, and large price swings.

Mitigate by using offline hardware wallets or cold storage for long‑term holding and spreading positions across multiple venues.

Crypto ETFs: Stock‑Market Exposure Without the Wallet

Exchange‑traded funds (ETFs) hold spot crypto on your behalf, wrapping it in a familiar brokerage product. In January of  2024, the U.S. Securities and Exchange Commission (SEC) approved 11 spot bitcoin ETFs, including BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s FBTC. Nine spot Ether ETFs began trading in July 2024, and in April 2025, the SEC allowed listed options on those funds, further boosting liquidity.

How To Buy

Any standard brokerage account (eTrade, Robinhood, Schwab, Fidelity, Interactive Brokers, etc.) can route an ETF order like a stock. Management fees typically range from 0.10% up over 2% of assets under management.

With an ETF, you avoid self‑custody headaches, trade in tax‑advantaged accounts like an IRA, and gain access to covered‑call or option overlays.

Key Risks

ETFs can trade at small premiums/discounts to the underlying holdings; you sacrifice staking yield (for ETH) and must pay the fund management fees. In addition, ETFs only exist for Bitcoin and Ethereum so far, though filings for Ripple (XRP), Solana (SOL) and other single‑asset funds are pending.

Crypto-Related Stocks

Today, many companies’ share prices can give you indirect—but sometimes highly leveraged—exposure to the blockchain space. Use a standard brokerage account to buy any of them, but note that each category rides a different risk cycle.

Miners (Pure‑Play Bitcoin Production)

• Marathon Digital Holdings (MARA): Largest by market cap; mined ≈ 2,285 BTC in Q1 2025 (≈ US $186 M).
•  Riot Platforms (RIOT): 1,428 BTC in the same quarter; Texas‑based with low‑cost power deals.
• CleanSpark (CLSK): Pivoted from micro‑grids to full-time mining, produced 1,950 BTC in Q1 2025.
• Other notable miners: HUT (Hut 8), BITF (Bitfarms), CIFR (Cipher Mining).

Corporate Bitcoin Treasuries (‘Hodlers’)

•  MicroStrategy (MSTR): Now known simply as “Strategy,” it commands the world’s biggest corporate stack (> 560,000 BTC).
• Tesla (TSLA): Still holds 11,509 BTC (≈$950 M) after its 2022 trim‑down.
• Block (XYZ): 8,584 BTC plus active treasury‑management tooling.
• Galaxy Digital (GLXY.TO) and Metaplanet (3350.T) round out the top corporate hodlers.

Exchanges and Brokerages

• Coinbase Global (COIN): Dominant regulated U.S. spot exchange; also operates the Base L2 network.
• Robinhood (HOOD): Retail on‑ramp with zero‑commission crypto trades.
• CME Group (CME) and Cboe Global Markets (CBOE): Regulated BTC/ETH futures and options; gateways for institutions.

Hardware & Chipmakers

• Intel (INTC): Supplying next‑gen Bitcoin ASICs under multi‑year deals with miners like GRIID.
• Nvidia (NVDA) & AMD (AMD): GPUs still power non‑BTC mining and AI/crypto crossover workloads.
• Canaan (CAN): Long‑running manufacturer of Avalon‑series ASIC rigs.

Non-Fungible Tokens

Non-fungible tokens (NFTs) are essentially one-of-a-kind digital assets. NFT tokens certify ownership of a unique digital item—artwork, concert tickets, in‑game gear, even real‑world merchandise receipts. After a euphoric 2021‑22, trading volumes fell dramatically year‑over‑year through 2025.

Tokenized real-world assets (RWAs) are blockchain representations of physical or off‑chain financial assets, such as Treasury bills, real estate, private credit, or fine art.

Where To Buy

• Marketplaces: OpenSea (the broadest selection), Blur (pro‑trading focus), Magic Eden (Solana first, now multichain) and tensor.trade for Solana Ordinals.
• Launchpads & mints: Many collections release directly from their own websites via smart contracts—always verify contract addresses.
• Bitcoin Ordinals: These are NFTs that exist as unique “Satoshis,” or the smallest possible divisible unit of bitcoin. Specialized wallets like Xverse integrate ordinals markets, but liquidity is often thin.

Key Risks

Illiquidity (a buyer may never appear), copyright disputes, wash‑trading, and sudden marketplace rule changes. Use cold wallets, monitor royalties linked to NFT resales, and beware phishing links in Discord/Twitter.

Tip

Media attention popularized NFTs in the mainstream after the digital artist Beeple sold a collage of non-fungible tokens for $69 million in 2021.

DeFi Lending, Staking, and Yield Strategies

Decentralized‑finance (DeFi) protocols recreate bank‑like services—borrowing, lending, derivatives—through autonomous smart contracts. This allows holders of cryptocurrencies to earn “interest” via staking or yield via lending. As of May 2025, total value locked (TVL) sits near $92 billion, with institutions providing the majority of liquidity. 

How To Participate

Connect a self‑custodied wallet (MetaMask, Rabby, Ledger) to the dApp, approve token spending, and deposit collateral. Yields derive from borrower interest or native reward emissions and fluctuate daily.

Some popular platforms include:

• Aave & Morpho: Variable‑rate lending and flash loans.
• Lido: Liquid‑staking derivative (stETH) for Ethereum.
• Curve & Uniswap v4: Stablecoin pools and concentrated‑liquidity AMMs.

Key Risks

Smart‑contract exploits, oracle manipulation, sudden liquidation cascades during price crashes, and governance attacks. Never stake funds you cannot lose; diversify across chains (Ethereum, Arbitrum, Solana) and keep emergency buffers.

Emerging and Future Developments

As blockchain technology and the crypto space continue to evolve, new opportunities and use cases arise.

Here are some important trends shaping blockchain’s future:

• Integration with traditional finance: Banks are testing blockchain for specific back-office functions, with JPMorgan and Citigroup leading in areas like settlement and tokenization.
• Enterprise products: Companies are developing private blockchains for business operations, focusing on efficiency and security rather than decentralization.
• Regulatory shifts: Governments worldwide are working to create clearer rules for blockchain applications and token holders, which could provide more certainty for investors and for business adoption.
• Central bank digital currencies (CBDCs): China’s digital yuan is already live in 26 cities, while Hong Kong’s e‑HKD and the ECB’s digital‑euro sandbox have moved into advanced retail‑payment tests, showing governments’ intent to keep core settlement layers “on‑chain.”
• Strategic crypto reserves: President Trump in 2025 announced the establishment of a U.S. strategic bitcoin reserve, initially seeded with seized crypto. Individual states and other national governments are also looking into this possibility.
• Artificial Intelligence (AI) + Blockchain: AI and blockchain are converging to let computation, data, and even autonomous agents become tradable on‑chain assets: tokens like Render or Bittensor pay GPU providers for machine learning, while platforms such as Virtuals let anyone launch an AI with its own wallet and revenue‑sharing token. Smart contracts give these systems transparent accounting, automated payouts, and permissionless market access, turning decentralized compute and “agent‑commerce” into investable primitives alongside coins and NFTs. The upside is exposure to AI demand without centralized gatekeepers; the downside is extreme volatility, experimental economics, and still‑unclear regulation over tokenized intelligence and biometric data.

Is Buying Coins the Only Way To Invest in Blockchain?

No. New investment vehicles include U.S.‑listed spot Bitcoin and Ether ETFs—now with exchange‑traded options—so you can get exposure in a regular brokerage or IRA account without self‑custody hassles. Beyond that, tokenized real‑world‑asset (RWA) funds put short‑term Treasuries, private credit, and even real estate on‑chain (the market is expected to top US $50 billion in 2025). Finally, sector‑specific equities—miners, exchanges, and firms with large crypto treasuries—offer additional, sometimes leveraged, exposure.

Are Banks and Governments Really Using Blockchain Tech or Is It Still Hype?

Several large banks are already running live back‑office pilots: JPMorgan’s Kinexys platform settle billions in tokenized collateral each day, while Citi is gearing up to custody and tokenize late‑stage private‑equity shares on Switzerland’s SIX Digital Exchange. On the public side, the U.S. created a Strategic Bitcoin Reserve in March 2025 using seized coins—an early sign that sovereign treasury management is edging on‑chain.

What Is a Smart Contract?

A smart contract is one that’s built into the blockchain to facilitate transactions. It operates under a set of conditions to which users agree. When those conditions are met, the smart contract conducts the transaction for the users.

Why Is Crypto Surging?

In November 2024, cryptocurrency experienced a surge in market value because of positive expectations by speculators following Donald Trump’s election win. Trump promised to support crypto, and many pending federal developments are being watched closely by investors. While the market sold off somewhat following trade war concerns, by mid-2025 many tokens had recovered, with Bitcoin approaching $100,000 once again.

The Bottom Line

Blockchain and crypto have matured from a frontier of speculative coins into a multi‑channel ecosystem where investors can choose among spot‑traded ETFs, tokenized real‑world assets, DeFi yield strategies, digital collectibles, publicly listed miners or ETFs, and even AI‑powered tokens. Institutional adoption—from JPMorgan’s back‑office pilots to governments seeding strategic bitcoin reserves—signals that blockchain’s settlement speed and transparency now complement, rather than confront, traditional finance.

Yet every route still carries technical and regulatory risks: smart‑contract exploits, shifting rules and regulations, and extreme price swings. Approach the sector as a high‑volatility sleeve within a diversified portfolio, pair any allocation with disciplined security (hardware wallets, reputable custodians), and keep one eye on policy developments that will determine which of today’s innovations graduate into tomorrow’s infrastructure.