Why Not Just Invest In Bitcoin
If a bitcoin ETF merely mirrors the price of the cryptocurrency itself, why bother with the middle man? Why not just invest in bitcoin directly? There are several reasons for this. First, as indicated above, investors don’t have to bother with the security procedures associated with holding bitcoin and other cryptocurrencies. Further, there is no need to deal with cryptocurrency exchanges in the processinvestors can just buy and sell the ETF through traditional exchanges and markets.
There is another crucial benefit to focusing on a bitcoin ETF rather than on bitcoin itself. Because the ETF is an investment vehicle, investors would be able to short sell shares of the ETF if they believe the price of bitcoin will go down in the future. This is not something that can be done in the traditional cryptocurrency market.
You can short sell bitcoin ETF shares if you believe the price of the underlying asset will go downan advantage you won’t find by investing in bitcoin itself.
Perhaps most importantly, though, ETFs are much better understood across the investment world than cryptocurrencies, even as digital coins and tokens become increasingly popular. An investor looking to get involved in the digital currency could focus on trading a vehicle they already understand instead of having to learn the ins and outs of something seemingly complicated.
What Is An Etf
The letters ETF stand for Exchange Traded Fund. This is a type of financial security that trades on the stock exchange, like a stock. However, unlike a stock, ETF shares represent parts of a fund, not shares of a company.
ETFs are considered awesome ways to readily diversify your investment portfolio at a very low cost, because a single ETF typically holds hundreds or even thousands of individual stocks. However, in the case of cryptocurrency ETFs, they only hold a single asset: either Bitcoin or Ether.
Cryptocurrency ETFs do not provide any diversification across multiple assets. This isnt necessarily a bad thing, but it is something that you need to understand. Reducing volatility through diversification is usually the primary benefit of investing in ETFs, but you do not get that benefit with cryptocurrency ETFs.
Hopefully in the near future true cryptocurrency ETFs emerge that hold multiple cryptos so when you buy shares of an ETF, youre buying shares in Bitcoin, Ether, and alt-coins.
Do You Really Need A Crypto Wallet
In the early days of cryptocurrency, when crypto exchanges were more likely to get hacked, investors definitely needed a crypto wallet. But, nowadays, crypto exchanges have really stepped up their security measures, making them a much safer place to store a private key.
If an investor wants extra security, or plan to spend crypto at retail stores, they should consider getting a wallet. Likewise, if theyve amassed a large amount of cryptocurrency, then a crypto wallet might be the safest place to store them.
Also Check: How To Sell Bitcoin On Paxful
Cryptocurrency Etfs To Buy: Innovation Shares Nextgen Protocol Etf
Innovation Shares NextGen Protocol ETF started trading in 2018 and has holdings in 45 companies. Major holdings include Nvidia, Intel and PayPal, so you get a lot of diversification with this one.
This ETF has an expense ratio of 0.95%. It has a weighted average market cap of $294.67 billion. Innovation Shares NextGen Protocol ETF has an annual dividend yield of 0.39% per share and an AUM of $26.65 million. This ETF has a year-to-date return of 8.61%.
On the date of publication, Faizan Farooque did not have any positions in the securities mentioned in this article.
Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S& P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio.
Article printed from InvestorPlace Media, https://investorplace.com/2021/05/the-5-best-crypto-etfs-on-the-market-blok-blcn-legr-bttc-koin/.
How Many Cryptocurrencies Are There
As of writing this, Canada has about 5,500 different cryptocurrencies, with Bitcoin, Ethereum, Tether, Binance Coin, Cardano, and Dogecoin being the top six.
Fair warning: cryptocurrencies can appear and disappear in the blink of an eye. In the future, investors will probably find more than this number.
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Benefits Vs Risks Of Buying Cryptocurrency Etf Funds
Any time you invest, it’s important to understand the benefits and risks involved. Any investment comes with an element of risk. No matter the asset, you could potentially lose money.
- However, there are additional risks that come if you invest in something relatively new. While blockchain technology is promising, it has yet to prove long-term staying power. Investing now could allow you the chance to get in on the ground floor of blockchain technology and potentially reap the gains later.
- Additionally, if you manage to invest in a Bitcoin ETF and the price of Bitcoin continues to rise â or if cryptocurrencies, in general, become an accepted asset class â your investment could pay off in a big way.
- On the other hand, cryptos may not take off, blockchain technology could be replaced by something else, and you could lose your money. Carefully consider this as you move forward. And make sure that you have a properly diversified portfolio so you aren’t too reliant on one asset class.
What Is A Blockchain Etf
A blockchain ETF is different from a cryptocurrency ETF. With blockchain ETFs, you’re buying shares of a fund that focuses on companies that are developing blockchain technology or using it in some way. This type of ETF focuses on the technology underlying cryptocurrencies.
For example, ETF BLOKholds assets related to blockchain development, such as software companies, financial services companies, and even the media industry. Rather than being based on the cryptocurrencies themselves, it’s more about the technology that supports them. As a result, it’s easier to get these ETFs approved in the U.S. because they are based on companies, not on crypto assets.
Another blockchain ETF available in the U.S. is BLCN. This tracks an index that follows the performance of companies that are involved in various aspects of blockchain development and support. For example, BLCN holds stock in Canaan Inc. . This company provides microprocessors for supercomputing hardware. This type of hardware is used in mining cryptocurrency coins and provides the computing power to process blockchain transactions.
So buying such an ETF won’t provide you with exposure to cryptocurrencies. But it offers you a chance to invest in companies that are part of the technology.
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Buy Best Bitcoin Etf Via The Etoro Platform
Once the account has been funded, investors can now begin the process of purchasing SQQQ ETF. The method of buying ETFs via eToro is straightforward to follow. Lets take a look:
- The process starts with logging into the account by entering the username and password.
- Type ProShares UltraPro or SQQQ in the search box. However, you can choose any from 257 ETFs available on eToro.
- The popped-up search results will bring forward a list, and investors will have to click on the desired stock.
Best Bitcoin ETF broker eToro
Then, click on the Trade button and enter the desired amount of money you want to invest in the shares. Finally, clicking on Open Trade will execute the function, and investment in the best Bitcoin ETFs will be made successfully.
How To Buy A Bitcoin Etf
If you want to buy a Bitcoin ETF, your choices are limited. In the U.S., the only Bitcoin ETF available is the ProShares’ Bitcoin Strategy ETF .
Elsewhere, the Bitcoin ETF BTCE is listed on the Frankfurt Stock Exchange, so you’ll need a foreign securities account. You can use that to purchase shares on other exchanges. However, you have to take into account foreign currency transaction fees and exchange rates.
Also note that some Bitcoin ETFs have a higher expense ratio than what you’d see with a lot of other ETFs. So be prepared for higher costs if you decide to go this route.
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Should I Buy Ethereum
Ethereum is extremely popular, with over 116 billion coins currently in investors hands. But just because its one of the more well-known cryptocurrencies doesnt mean its right for you.
Before buying a volatile investment like Ether, youll want to make sure youve done your research and your finances are in good shape. Ideally, you should have a large emergency fund, be maxing out your retirement accounts and have minimal debt. Even if you can check all those boxes, its important to diversify your portfolio, so only a portion of your investments should be in Ethereum and other cryptocurrencies.
Should You Invest In A Cryptocurrency Etf
The short answer is yes, you should invest in a cryptocurrency ETF. I recommend investing 1% to 3% of your total portfolio in each of the Bitcoin and Ether ETFs. I also strongly suggest you invest directly in the actual coins for both Bitcoin and Ether using a cryptocurrency exchange platform.
The best cryptocurrency exchange platform to buy Bitcoin and Ether is Shakepay. If youre looking to invest in altcoins like Dogecoin, Litecoin, or Dash, then Coinsquare is your best bet! We compare the best cryptocurrency exchange platforms in Canada here.
Why Mark Cuban Won’t Invest In Bitcoin Futures Etf
by Emma Newbery | Published on Oct. 24, 2021
Many or all of the products here are from our partners. We may earn a commission from offers on this page. Its how we make money. But our editorial integrity ensures our experts opinions arent influenced by compensation. Terms may apply to offers listed on this page.
Why invest in a Bitcoin futures ETF when you can buy the real thing?
Bitcoin hit a new all-time high this week, passing the $65,000 mark for the first time. A large part of the reason for its recent price rise was the successful launch of a Bitcoin Futures Exchange Traded Fund on the New York Stock Exchange.
But billionaire crypto enthusiast Mark Cuban says he won’t invest in the new ETF. The reason? He’d rather buy Bitcoin directly.
Types Of Cryptocurrency Etfs
There are two kinds of cryptocurrency ETFs. Physical cryptocurrencies back one, and the other one is a synthetic variant that tracks cryptocurrency derivatives. In the first type, the investment firm managing the fund purchases the actual cryptocurrencies, and the coins ownership is represented by the shares. Investors can indirectly own cryptocurrencies by purchasing the shares in an ETF. In this way, shareowners can reduce the risk associated with the ownership of cryptocurrency and the accompanying expense while gaining exposure to the cryptocurrency.
The second type of cryptocurrency ETF tracks the cryptocurrency derivatives just like futures contracts and is considered a copied variant that mimics the real price of the derivatives of underlying cryptocurrencies. Many proposed ETFs seek approval from the US Securities and Exchange Commission to track the prices of Bitcoin futures contracts traded at the Chicago Mercantile Exchange. The ETF share price does not mimic the price of an actual cryptocurrency and instead, it follows the movements of derivatives.
Therefore, the price of cryptocurrency ETFs changes according to the price of cryptocurrency futures contracts. Synthetic cryptocurrency ETFs are considered riskier as their operations might not always be transparent, just like other derivatives.
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Thats How It Always Goes At Bild Those Who Sleep With The Boss Get A Better Job
A junior employee of the German tabloid Bild, to a law firm hired by its parent company, Axel Springer, in the spring to investigate its work practices. Axel Springer, which recently added Politico to a growing stable of digital properties in the U.S., has faced allegations of creating a hostile work environment for women in its home country. The culture at Bild was not up to our standards and does not reflect the broader culture at the company, Mathias Döpfner, Axel Springers C.E.O., said in a statement.
How To Invest In Crypto Without Buying Coins
The easiest way to get investment exposure to crypto without buying crypto itself is to purchase stock in a company with a financial stake in the future of cryptocurrency or blockchain technology.
But investing in individual stocks can bear similar risks as investing in cryptocurrency. Rather than choosing and investing in individual stocks, experts recommend investors put their money in diversified index funds or ETFs instead, with their proven record of long-term growth in value.
Believe it or not, most individuals with a retirement plan or an investment portfolio allocated in an index fund already have some exposure to crypto, says Daniel Johnson, a CFP with ReFocus Financial Planning.
Many of the best index funds like S& P 500 or total market funds include publicly traded companies that have some involvement with the industry by either mining crypto, being involved in the development of blockchain technology, or holding significant amounts of crypto on their balance sheets, says Johnson.
For example, Tesla which holds over a billion dollars in Bitcoin and accepted Bitcoin payments in the past is included in any funds that track the S& P 500. Since its 2020 inclusion, its become one of the most valuable, and therefore influential companies in the index. And Coinbase, the only publicly traded cryptocurrency exchange, is in the ARK Fintech Innovation ETF.
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Opening An Account And Funds Deposit
Once you decide the best Bitcoin ETF to buy, the next step is to open an account with the best Bitcoin ETF broker who will give you access to the online trading account. The process of opening an account with a top broker in the United Kingdom, eToro, is mentioned below.
The first step is to open the website of eToro and then register for a trading account by clicking on the Join Now button at the center of the screen.
- Full name
What Is A Bitcoin Future Etf
Exchange-traded funds are financial products that are regulated and can represent a wide array of different assets. An ETF also keeps track of the price fluctuations of an underlying asset, giving people an alternative to extract profits from the price trend of the asset without really owning even one unit of it.
Bitcoin futures are a type of price-tracking trading contract entered into by two parties. Both the parties agree to purchase or sell Bitcoins at a predefined price at a later date, a report by CoinDesk explained. This kind of trading happens on a commodities exchange.
The final day price of the Bitcoin more or less cannot influence this Bitcoin futures contract. In this case, while one person garners profit, the other is subjected to losses.
A Bitcoin futures ETF getting approval from US’ Securities and Exchange Commission has added to the warm climate around cryptocurrencies, brewing in the States while the government there is exploring ways to use the crypto space to their benefit and also regulate it.
What we’re trying to do is ensure the best we can within our authorities to bring projects into the investor protection perimeter. Bitcoin futures have been overseen by our sibling agency, the Commodity Futures Trading Commission , Gary Gensler, Chairman, SEC said during an interview.
A video clipping of the interview has been tweeted by CNBC.
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Wait For Crypto Exchange
ETFs are extremely popular investment tools that let you buy exposure to hundreds of individual investments in one fell swoop. This means they provide immediate diversification and are less risky than investing in individual investments.
There is a huge appetite for cryptocurrency ETFs, which would allow you to invest in many cryptocurrencies at once. No cryptocurrency ETFs are available for everyday investors quite yet, but there may be some soon. As of June 2021, the U.S. Securities and Exchange Commission is reviewing three cryptocurrency ETF applications from Kryptcoin, VanEck and WisdomTree.
Place Your Cryptocurrency Order
Once there is money in your account, youre ready to place your first cryptocurrency order. There are hundreds of cryptocurrencies to choose from, ranging from well-known names like Bitcoin and Ethereum to more obscure cryptos like Theta Fuel or Holo.
When you decide on which cryptocurrency to purchase, you can enter its ticker symbolBitcoin, for instance is BTCand how many coins youd like to purchase. With most exchanges and brokers, you can purchase fractional shares of cryptocurrency, allowing you to buy a sliver of high-priced tokens like Bitcoin or Ethereum that otherwise take thousands to own.
The symbols for the 10 biggest cryptocurrencies based on market capitalization* are as follows:
*Based on market capitalization as of June 28, 2021
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Best Online Brokers For Crypto
You can buy and sell shares of a cryptocurrency ETF with an online broker. Most online brokers let you trade stocks and ETFs commission-free. You might be required to maintain a minimum balance to open an account on these trading platforms.
Online brokers let you easily manage your portfolio. It also provides plenty of advanced tools and educational resources to improve your trading tactics.
Heres a rundown of the best online brokers to help you get started.
- Almost no trading analysis tools available
- Only taxable brokerage accounts available
- No option to open a retirement account
- No access to mutual funds, forex or futures trading
- Limited customer service
Determine Your Level Of Risk
Theres no getting around it buying Ethereum can be a gamble. While all investments have some risk associated with them, cryptocurrencies are especially vulnerable to price fluctuations. Just think about the impact a couple of hundred characters can have on crypto pricing: After Elon Musk tweeted that Tesla would no longer accept Bitcoin as payment, for instance, the coins value tumbled 15%.
Although Ether has had impressive returns in the past, its also had some significant crashes, sometimes in astonishingly short amounts of time. Notably, it went from a high of almost $4,000 per coin in May 2021 to less than $1,800 in June 2021. If you had bought in at its high, youd be sitting with half that value just a month later. Thats some pretty extreme volatility.
Thats why its important to consider your risk tolerance along with the diversity and stability of the rest of your investment portfolio before buying Ether. Experts recommend that you never invest more in crypto than you can afford to lose.
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