Most precious metal investors will know that you can invest in silver online by buying physical silver, silver mine shares, or investing in silver exchange-traded funds (ETFs). But there are other surprising ways to invest in silver online that you might not have known about.
Reasons for Buying Silver
Like with gold, the main reasons for buying silver have to do with investing in a relatively stable asset that can weather inflation, market crashes, and other financial disasters. It is because of this property of gold and silver that they are considered solid stores of value.
If you are investing in silver, whether stored by you or stored by banks, your chance of massive long-term gains is not likely. Silver’s purpose is generally to provide a hedge against market volatility as it is generally thought to hold its value through hard times.
But a wholly different reason to invest in silver is for certain kinds of short-term plays. If there is a lot of market sentiment of a looming market crash or fears of hyper-inflation, there’s a good chance the price of silver will spike upwards in the short term. Even more so if those things actually come to pass. Therefore, there is a great opportunity to profit if you can predict such an event.
Typical Ways of Buying Silver
There are some problems when it comes to the standard ways to buy silver:
You can buy physical silver, but it’s costly to move around, store, and keep secure. You can invest in silver mine stocks, but these are often more volatile than silver itself, depending upon the underlying business practices. Finally, you can invest in an ETF that specializes in silver, which is a good compromise but doesn’t have much in the way of upside opportunity.
If you are interested in silver as a defensive play, a surprising new way to reduce the cost and maintenance of investing in silver is to invest in a silver-backed cryptocurrency.
Called ‘commodity-backed stablecoins,’ this is a relatively new class of cryptocurrency that ties its value to the price of a specific commodity. In the case of a silver-backed stablecoin, it’s a cryptocurrency that is backed by physical silver. SilverCoin is one such stablecoin. Like many previous silver-backed stablecoins, it can be exchanged for 99.9% pure silver.
Thus, precious metal-backed stablecoins are a way to gain exposure to silver that has the benefit of being directly connected to real silver without needing to store it oneself. In that way, it’s similar to a silver ETF, but not quite the same, as you can’t actually withdraw the silver for yourself by exchanging silver ETF shares. In addition, it has all the transactional uses of a cryptocurrency, with the capacity to be sent and received very fast and in small fractions.
Alternatively, if you are looking for high-stakes, short-term plays on silver, silver futures contracts might be worth looking into for you.
Many newer investors might not be aware of what these are, but essentially, silver futures are contracts to buy or sell silver at a certain date at a pre-given price. One party wants to buy a certain amount of silver for its current market price sometime down the line, while another party agrees to sell it for that price. It sounds simple and perhaps even unnecessary, but in reality, there is much more value being traded in the silver futures market than in the market for genuine physical silver.
The reason is that investing in futures contracts allows for both larger swings on the short-term volatility of silver on the one hand and for more stable silver prices for those on the other.
Buying Real Silver Online
While it may seem obvious to buy physical silver coins online as they are the most popular way of owning physical silver, there are actually quite a few different ways to do so.
First, so-called ‘junk silver’ refers to silver coins that have been so worn down by circulation they no longer hold value to coin collectors. In the US, a lot of pre-1965 coinage is junk silver, containing 90% silver. Scouring the internet for deals on these bags of junk silver can be a fun way to purchase silver online, plus they are a neat way of owning physical silver.
Second, you can also go for collectible silver coins. These go for much more than the value of the silver inside them, but their collectibility puts them into a similar category as the art market when it comes to investing. The online selection of these coins is also going to be much larger than it is in stores. Beyond the power of getting to own this silver physically, these can be beautiful keepsakes and gifts that can be passed down for generations in a way that many digital investments in silver simply can’t be.