According to insights from the Financial Times, younger investors are becoming increasingly aware of cryptocurrencies, and are even turning their backs on traditional stocks and shares in favor of crypto investments. 

Worryingly, 64% of 18 to 25-year-olds claim to have invested without knowing what they were doing, which may be paving the way for a growing number of horror stories among investors who have lost money through investing in cryptocurrencies. 

Although Bitcoin’s rally to $100,000 means that it’s now more than 1,300% higher than on January 1, 2020, some 53% of those who traded cryptocertificates and sold off their entire holdings during the period made a loss. 

This shows that, despite Bitcoin making large gains since its inception in 2009, the world’s oldest cryptocurrency has showcased significant volatility throughout its lifespan, resulting in heavy losses that have damaged the wealth of its investors. 

Given that volatility can make crypto largely unpredictable even though more young investors are becoming aware of cryptocurrencies, it’s unsurprising that research shows 66% of Britons are nervous about investing.

With this in mind, what alternative investment opportunities are there for investors who are unwilling to risk their wealth in volatile assets like Bitcoin? Let’s take a deeper look at how alternative investment strategies can offer more sustainable returns over time: 

1. High Yield Government Bonds

One of the safest investments that you can take advantage of today is high-yield government bonds. At a time when interest rates remain relatively high compared to the previous decade, government bonds offer a low-risk investment opportunity over a pre-defined period. 

In effect, a government bond is a form of debt-based investment where you loan money to a government in return for an agreed rate of interest. 

Governments will use their funds to develop new infrastructure or growth projects, while investors will get a pre-determined rate of return that will be paid at regular intervals. 

Although government bonds don’t offer the same high rate of return that we’ve often seen cryptocurrency investors access, their clearly defined repayment structures mean that you can diversify your investments with different global bonds and take advantage of high interest rate environments to maximize your earnings. 

1. Real Estate

Real estate can be another high-growth investment strategy where you invest in properties, rather than stocks, shares, or crypto. The properties in question could be residential, commercial, or mixed-use, and have often proven to be a great passive investment with little associated risk. 

This investment strategy is great for investors seeking to gain value from their property when rental rates increase and the property’s value increases. 

Although you may not have the wealth or the time needed to become a landlord, you can invest in private real estate investment trusts (REITs) as a means of gaining exposure to the lucrative property market without becoming the sole owner of real estate. 

Typically purchased through brokers, a REIT allows you to become an investor in a property without having to deal with the daily upkeep of the building as a landlord. 

1. P2P Lending

As a relatively new concept, the notion of peer-to-peer (P2P) lending is that you’ll provide lending services to individuals rather than traditional financial institutions. This means that borrowers can take out a loan with you and other lenders and you’ll earn interest in return rather than a bank. 

P2P lending can be a mutually beneficial strategy, where borrowers can access better rates than banks, while lenders are the ones who benefit from a more passive approach to investing. 

Could there be more risk involved in P2P lending? The structure of this investment strategy is entirely flexible, meaning that you have the freedom to pick and choose which loans you invest in based on factors like the borrower’s credit score, the loan amount, and the purpose of the loan. 

Platforms like LendingClub have already facilitated more than $68 billion in loans since launching in 2007 and have provided a range of different financial services to its 3 million customers. The platform claims that historical returns for investors range between 3% and 8% per year. 

1. Scouting for Blue-Chip Stocks

Stock markets can often come with plenty of volatility, but investing in blue-chip stocks has been a time-honoured way to access higher returns over long periods of time. 

Blue-chip stocks are defined as large, well-established, and financially stable companies with an excellent reputation. These companies are generally long-serving and can provide dividends for investors. 

These companies will have a market capitalization that ranges into the billions and will be one of the leading firms within its industry. This helps to provide more market stability and protection against market downturns. 

Stocks like Microsoft, IBM Corp, Coca-Cola, American Express, and McDonalds are all regarded as blue chip companies and are all capable of posting significant long-term profitability for investors adopting a more patient approach to saving money. 

1. Consider a Crypto ETF for High-Risk Yields

If the recent outperformance of Bitcoin is simply too attractive to ignore, consider protecting your investments by buying into an exchange-traded fund (ETF) rather than using a crypto exchange. 

Holding cryptocurrency can expose you to challenges in counterparty risk, industry bankruptcies, and the dangers of hackers attempting to steal your assets. With crypto wallets protected by private keys, there’s even a risk that you could lose access to your holdings. 

ETFs are popular instruments for investors to buy into assets that aren’t directly listed on the stock market to gain exposure to their price performance. However, while this approach can help to keep your investments safe, it won’t protect against the severe industry volatility surrounding the crypto landscape. 

Finding the Right Risk Balance

There’s no one-size-fits-all approach to risk management for your investments, and every investor will have different priorities when it comes to keeping their wealth safe from harm. 

Bitcoin may be at $100,000 and many analysts believe it will rise higher over time, but there are no guarantees in the highly volatile crypto landscape, and it’s with good reason that many investors are concerned about buying into Bitcoin - especially with the ever-changing payments landscape. 

Fortunately, many different investment strategies can provide strong returns while matching your desired level of risk and finding the right approach for your financial goals is a key step towards finding a sustainable risk balance.