Investing in hydrogen: a smart idea?
Many people are aware of the climate. People want to live more and more sustainably. Together they want to reduce CO2 emissions by replacing cars that run on polluting fuels with electric cars. In addition, more and more research is being done into a more sustainable lifestyle. But sustainable investing is also becoming increasingly common in the investment world. Including investing in hydrogen .
What is hydrogen actually?
Hydrogen is a pure natural raw material. It is one of the lightest raw materials on earth. Even air weighs more than hydrogen. Moreover, hydrogen is found all over the world. Hydrogen is converted into gas, by electrolysis. The acid molecules must be released from the hydrogen, to make the raw material usable. This is done by treating the hydrogen with electricity. When processing hydrogen, unfortunately, some harmful fuels are released. That is why the production of hydrogen is not yet that sustainable.
Almost the best-known application for hydrogen is to use it as a fuel for cars. Electric driving may be an alternative to fuel engines, such as diesel and petrol, but this alternative is not yet perfect. But this is not the only option. There is also hydrogen available, as a fuel for cars.
Despite the fact that hydrogen is not often used for vehicles, people are optimistic about the future of this product. The developments are happening quickly. Hydrogen is also a clean fuel. The raw material is extremely good for the climate. That is why you can just as easily make hydrogen more sustainable. The raw material could also be used in homes, instead of gas, for example.
Investing in this product may seem a bit far-fetched. Investing in hydrogen is therefore done indirectly. This can be done via companies that work with hydrogen and are involved in the future developments of the product. Hydrogen is an attractive product for many sectors.
How should I invest in hydrogen?
You can invest in hydrogen, via a broker’s trading platform. This can be done by means of hydrogen ETFs or hydrogen shares.
Investing in hydrogen through shares
Several companies see something in a future with hydrogen. If you think the same, you can start by buying shares in this sector. You buy shares of organizations that are actively involved with hydrogen. Many industrial sectors focus on hydrogen technology. Think of well-known car brands that produce cars on hydrogen. Mercedes also has plans to bring hydrogen cars onto the market soon.
Other large companies working with fuel cells include Ballard Power and Powercell Sweden AB. These companies focus on the production process of fuel cells, as a basis for hydrogen production. Fuel cells can create hydrogen. Hydrogen can then provide various devices and engines with energy. Hydrogen is still a young product to invest in. The market is new and therefore the prices are still quite unpredictable.
Hydrogen and ETFs
Another option is to opt for ETFs, as an investment product. In addition, you take a smaller risk, by investing in ETFs. Since the first half of 2021, two new ETFs have been available, which make it possible, to trade with hydrogen. Hydrogen ETFs can be used, for various organizations, that work with hydrogen in different sectors. Both fuel companies and companies that produce the hydrogen cell are part of these ETFs.
How beneficial is it to invest in hydrogen?
It is wise to be an advocate of the hydrogen economy yourself, before you invest money in the product. You must have a dose of confidence, in the future of the product. This can be done with the expectation that hydrogen can contribute, to a more sustainable climate. You also assume that companies will bring about successful developments. All these factors, can lead to favorable prices. As soon as companies make a profit, the shares also go up. This profit forms a good basis, for long-term success in the future. This only happens, if a product is experienced as successful, in society. The product must have an added value, for the user, so that there is a lot of demand for it. In the long run, hydrogen will be used more often, as a fuel for modern cars. The product is currently still at the beginning of the developments. That is why the future is difficult to predict at the moment.
What risks do I run with this product?
Investing remains unpredictable. It is always a matter of waiting to see what the prices will do. However, you can continue to follow the historical trends of the market. For example, look at previous prices and the previously achieved returns of other investors. It is smart to regularly keep up with analyses. There are many platforms nowadays, where useful tools are available, so that you can learn to invest smartly. Because it has only been possible to invest in hydrogen for a few years, the future of this product is still uncertain.
Advisors believe that hydrogen will be largely integrated by 2050. According to them, it will be used for more and more purposes, which will increase the demand for the product. Time is also a risk. Now someone might be able to invest cheaply in hydrogen. Unfortunately, it can take years before the product yields a good return. This means passive investing, without receiving a return every year.
The future of hydrogen plays an important role here. You are motivated to invest in a sustainable future. Do not expect immediate success, but look at it over a longer period.