Bitcoin was designed with an intention of becoming an international currency to replace the fiat currencies of the government. Since its inception in 2009, it can today be used to buy or sell anything online where merchants accept it. but there are certain rules to bitcoin investment and you should be aware of all. If not invested in the right way, you may end up losing money for this cryptocurrency.
There are many ways of investing in bitcoin. There are many bitcoin trusts and ETFs that only deal with bitcoin investments.
- Buying Standalone Bitcoin
You can invest in bitcoin by purchasing a coin or a fraction of a coin via trading apps like Coinbase. You will also need personal information to set up such accounts and then deposit the money. You will need a minimum deposit to purchase Bitcoin. You can also access your bitcoin’s price performance just like you do in any stock or ETF. You also have the option to buy or sell if you need funds or if you find the rates higher. When you buy, your bitcoin is safely kept in a purchase wallet that only you can access.
Investors who look in Bitcoin through capital markets can also access their investments through Greyscale’s bitcoin investment trust – GBTC. After using this greyscale, you get certain advantages to make an investment in bitcoin and make it a more useful option. Shares of GBTC are used for holding in certain IRA, Roth IRA and also in certain other brokerage accounts. This allows easy access for all levels of investors in different accounts.
- Amplify Transformational Data Sharing ETF (BLOK)
BLOK is an actively managed fund that has holdings in 15 different industries. It is traded on the New York Stock Exchange Arca. The company invests in other technologies as well that are used in developing blockchain technologies. BLOK’s total expense ratio is 0.70%.
- Bitwise 10 Private Index Fund
This is based on the Bitwise 10 Large cap crypto Index, which is a basket of large capacity coins. The company tries to provide additional security and the ease of use of a traditional ETF. The Bitwise 10 Private needs at least a minimum investment of $25,000 and also has a fee ration of 2.5%. This is similar to GBTC and the assets are held in cold storage. This provides important security for its investors.
Risks in Bitcoin Investment
Bitcoin is a volatile asset with dramatic fluctuations. In the April of 2013, bitcoin’s value jumped from $40 to $140 in just one month. Now in January 2017, Bitcoin hovers between $900 to $1000. In the first week of September, it pushed beyond $4700 and then dropped to $3600 two weeks later. By mid-December, it reached an all-time high of 419,891 and then again fell to $6330 in just two months. The exchanges can be very tricky as many prove to be very unreliable.
These are some of the bitcoin investment types and their risks.