Once upon a time if you wanted to invest in bitcoin you had to use unsafe, unregulated exchanges based in overseas jurisdictions. Nowadays, however, the infrastructure around cryptocurrencies has matured substantially and there are several new ways you can gain exposure to bitcoin and the cryptocurrency market as an investor. In this post, you will be introduced to 5 new ways to invest in bitcoin and the Blockchain.
Blockchain and Bitcoin Stocks
There are currently several bitcoin and Blockchain companies listed on stock exchanges. An example would be DigitalX (DCC: ASX) on the Australian stock exchange, which provides two key services; Air Pocket – a global peer to peer remittance service and DigitalX Direct – a software solution to provide bitcoin liquidity to institutional investors. Another large Blockchain-focused company that is listed on the exchange is BTL Group Ltd (BTL: TSXV), which provides bitcoin and Blockchain consulting services to help business better understand this technology and its benefits. Additionally, there are also several bitcoin penny stocks. An example would be Bitcoin Shop Inc. Having said that, always tread carefully with penny stocks as they are illiquid and volatile securities.
The Bitcoin ETI is Europe’s first publicly listed exchange traded instrument (ETI) that offers sophisticated investors exposure to Bitcoin without the need to physically store the digital currency. It is a UCITS eligible-asset-backed security whose performance and value is anchored to Bitcoin as the underlying asset. Its ISIN number is MT0001151225 (you can check out its prospectus here) and it is listed on the Gibraltar stock exchange and the Deutsche Börse. The base currency is the Euro and it comes with a management fee of 1.75%. Its advantages include that it is Europe-wide, leveraged, liquid, transparent and easily accessible to European investors.
ETFs (exchange traded funds) provide a regulated and safe way to invest in bitcoin. There are currently several companies looking to launch bitcoin ETFs in the hope to attract investor attention and funds. Companies SolidX and Gemini are both close to launched Bitcoin ETFs in the United States. It remains to be seen how strong investor interest will be. However, with its strong diversification aspect and recent price performance it could become popular among investors.
Several CFD trading platforms, such as eToro and IG Markets, offer bitcoin as an underlying asset to trade. If you want to take short-term speculative positions in bitcoin, using such a platform is an easy option without having to go through the process of setting up a bitcoin wallet and purchasing the digital currency. However, if you want to hold bitcoin long term I would strongly suggest buying the real thing.
Ether Index LLC is a US-based company that has recently been cleared by the Securities and Exchanges Commission to launch the first ever Ethereum-related Exchange Traded Product (ETP) in the United States. It seeks to replicate the value of ‘ether’ – the cryptocurrency that runs the Ethereum ‘smart contract’ system via an exchange traded fund (ETF). Investors will be able to access the ether ETF once it has been launched via any conventional brokerage account as it will be traded on the New York Stock Exchange.