How to Invest in Cryptos on the Stock Market?
Summary
1.Buy Blockchain ETFs
2.Investing in Crypto ETFs
3.Buy shares of major technology groups
4.What are the benefits of investing indirectly in crypto?
5.Sources
6.Frequently Asked Questions
Yes, it is possible to invest in digital assets, without buying any. Blockchain technologies and cryptocurrencies have become popular and increasingly accepted by investment funds and marketplaces. This is how we have seen the emergence for several years of new financial instruments to invest in the crypto sector. These are essentially ETFs, which I will present to you in this article.
Buy Blockchain ETFs
ETFs — “Exchange Traded Funds” — are financial assets similar to a stock market. These listed investment funds include several stocks or bonds. For example, buying an Emerging Countries ETF generally makes it possible to invest in a multitude of important companies based in developing countries (Brazil, India, Russia, Indonesia, South Africa, etc.) as well as in various promising sectors of activity. Investing in a share of an ETF is therefore equivalent to investing in a portion of all the shares owned by the fund that manages that ETF.
Some investment funds offer ETFs that specialize in industries such as blockchain.
This is a recommended solution for people who are still skeptical about buying cryptocurrencies, but who want to take advantage of the growth of the blockchain technology sector.
Buying an ETF is similar to placing a stock market order. To find blockchain ETFs, find out more by consulting the websites of funds offering ETFs accessible from the USA (via Securities Account or an online broker).
Some examples of blockchain ETFs accessible in the USA
Amplify Transformational Data Sharing (NYSE: BLOK): a fund that invests primarily in companies involved in blockchain. Among the stocks that make up the majority of this ETF we find:
Coinbase
Fidelity
Fidelity Crypto Industry and Digital Payments ETF (FDIG)
VanEck
VanEck Digital Transformation ETF (DAPP)
First Trust
First Trust SkyBridge Crypto Industry and Digital Economy ETF (CRPT)
Amplify
Amplify Transformational Data Sharing ETF (BLOK)
SirenETFS
Siren Nasdaq NexGen Economy ETF (BLCN)
Global X
Global X Blockchain ETF (BKCH)
Bitwise
Bitwise Crypto Industry Innovators ETF (BITQ)
VanEck Vectors Digital Transformation ETF (DAPP): This ETF is another recent passive management fund, having been established in April 2021. DAPP tracks the performance of an index that holds shares of companies active in the crypto and blockchain space. Its shares are spread across more than 25 technology and financial companies, half of which are located in the United States.
Good to know
Before choosing which crypto project or company to invest in, always do your research beforehand on the fundamentals of the technology used by the team developing this project.
Investing in Crypto ETFs
They made headlines after the biggest financial institutions took an interest. ETFs exposed to crypto-assets have recently appeared to simplify access to investment for individuals.
Some Crypto brokers World famous as Gemini have attempted to launch investment funds accessible to the general public. But the market regulator (SEC) in the United States has not yet authorized these financial instruments in its territory.
Most current crypto ETFs are not managed by companies that directly own cryptocurrencies. Their operation is therefore a bit peculiar: they do not hold Bitcoin — or other crypto — but futures, more often called “futures”.
“If You Want To Know How To Get Rich With Bitcoin
Even If You Have No Clue About Technology”
Then Go To Crypto Quantum Leap. Here You Will Learn Everything From A Bitcoin Investor Who’s Living This Life Right Now. Go Now If You Are Serious About Investing In Bitcoin To Earn.
What is a Bitcoin futures?
Bitcoin and Bitcoin futures are two different things. With futures, you bet on the price of the asset in the future, up or down. You are not directly buying or selling the underlying asset (bitcoin in this case).
When the sale date arrives, you should theoretically buy or sell the asset at the agreed price, regardless of the actual price of Bitcoin that day. If your contract comes true and Bitcoin is worth more than you agreed, you make money. If the price of Bitcoin is lower than you expected, you lose money. In the case of ETFs, the investment fund does it for you.
By investing in this new fund, you are simply betting on the possibility that your ETF shares will increase in value. Since the underlying asset of the value of your shares is Bitcoin, you are indirectly betting on a growth in the price of Bitcoin.
ProShares Bitcoin Strategy ETF (BITO) is the first bitcoin-linked ETF in the U.S. On the day of its market launch (October 19, 2021), its capitalization exceeded one billion dollars.
Many assets trade on futures contracts — usually commodities like oil, grain, or coal. For example, you can buy a gold futures contract instead of buying gold bullion.
You can also Invest in Bitcoin if you want to be a direct owner of a stock of BTC.
Buy shares of major technology groups
Investing directly in the shares of one or more companies is another option. However, it will be necessary to study the sector of activity to properly diversify your portfolio of stocks.
This strategy may be less risky, since it involves investing in companies whose core business is not the development of a blockchain solution. However, they are looking to innovate in this sector to expand their offering of products or services directly related to the blockchain sector.
Here are some examples:
. Amazon: created its Amazon Managed Blockchain service
. Nvidia: produces graphics processors needed for Crypto mining
. Intel: launched a computer chip dedicated to blockchain
. DocuSign: offers blockchain services
IBM, Microsoft and Tesla are also companies involved in projects related to the crypto-asset industry.
What are the benefits of investing indirectly in crypto?
It has been several years since the growth of Bitcoin and other cryptocurrencies has led traditional finance players to increase acceptance of digital assets. Investment funds as well as banks and multinationals are now participating in this new economy. This is how retail investors can now access this market by placing their savings in assets correlated to cryptos, but marketed by traditional players (banks, brokers, etc.).
Indirect investment in crypto has 3 main advantages:
- Avoid the risks associated with owning crypto assets stored on an online platform or e-wallet
- Be able to declare its gains as profits on stock market assets, and not as capital gains on crypto-assets
- Diversify the risks of your investments passively, and significantly
Sources
forbes.com
Blockchain ETF List — etfdb.com
Melanion Capital launches its Bitcoin ETF — melanion.com
Frequently Asked Questions
😉 Are there any European crypto ETFs?
The Melanion BTC Equities Universe replicates the performance of a basket of stocks whose correlation with the price of Bitcoin can reach 90%. Melanion Capital is a management company based in Paris. It is now authorised to market this ETF on Euronext, the European marketplace.
Find more news on crypto and blockchain ETFs by visiting the Justetf.com website.
👨💼 Can I borrow money to invest in cryptocurrency?
It is not recommended to take out a loan to invest in the cryptocurrency sector. Only professional investors and listed funds can now afford to raise funds to invest in crypto-assets, among other things.
🤵 How to invest in the Metaverse on the stock market?
Several options are possible: buy shares of companies in the technology and video game sector, or an ETF that contains a basket of stocks of this type of company. The Roundhill Ball Metaverse ETF is listed in the United States, but not yet available in Europe. Several Promising cryptocurrencies attract many investors since the project development announcements in the Metaverse.
💵 What are the fees for buying an ETF?
ETF purchase fees include an annual management fee (0.4% on average). Then there are brokerage fees, which depend on the pricing policy of the broker used. However, since the Pacte law, brokerage fees in a PEA are capped at 0.5% in the event of a dematerialized order. Pricing is free with regard to the securities account.
Disclosure: Some external links in the post are affiliate links.
