While there aren’t that many ways to use institutional-level, regulated vehicles to get exposure to bitcoin and other cryptocurrencies, there are some, and the market will likely expand.
Money managers are finding ways to offer managed investments that offer exposure to cryptocurrencies, despite the hurdles presented by regulators and skepticism from large financial companies.
On the over-the-counter market OTCQX, you can buy shares of the Bitcoin Investment Trust from Grayscale (Nasdaq: GBTC). This fund has seen massive gains recently but does come with a 2% fee. The Chicago Mercantile Exchange (CME) has stated that it would like to start trading cryptocurrency futures, but it may be a little time before this becomes a reality, due to significant red tape and guidance needed regarding cryptocurrencies.
In the unregulated cryptocurrency exchanges that exist internationally, it is possible to hold futures positions on various cryptocurrencies, and some of these exchanges are well-established, but actually holding investments with these exchanges comes without any protection such as SIPC insurance in the US financial markets. Meanwhile, more and more hedge funds investing primarily in cryptocurrencies have hit the market, but, once again, these are for accredited investors with a high net worth.
Cryptocurrency mining outfits such as Macro Energy’s Digital CC are traded as stocks on international exchanges, where investors can take part in the dividends of the cryptocurrency mining. Genesis Mining, out of Iceland, offers institutional-level investors to take part in their mining profits, part of which is cloud mining that is paid for using customer-level investment participation by renting the rights to profits for a certain bandwidth of mining capability. The cut that comes off the top of those profits will partially go to the international hedge fund investors. Iceland is an ideal spot for bitcoin mining due to low energy costs, and low temperatures which naturally keep the mining machines cool.
In San Francisco, multiple ventures are seeking to bring cryptocurrency funds to the market. One of which, Bitwise Asset Management, launched their Hold 10 Index in October of 2017 with funding from the co-founder of AngelList, Naval Ravikant. Hold 10 is a private fund available only to those who meet SEC qualifications as accredited investors with over $10,000 to invest. It is designed to passively hold the top 10 cryptocurrencies.
The incentive to use it as opposed to a DIY approach is partially that the major cryptocurrency exchanges limit the amounts that investors can buy in many cases, and there tends to be a lot of hassle when dealing with significant amounts in different currencies, so that fund would solve those problems for you. The Winklevoss twins, who helped found Facebook, were shot down by regulators in March with their proposal to start a different cryptocurrency ETF. Scouring the internet for more information regarding possible entry points for such exposure will be necessary since the markets and regulations are always changing. But be assured that more investment options will come online as time passes.
“Load” mutual funds are those which have a fee structure that includes a front-end or back-end sales charge
Stocks are inherently risky, and an investor has risk of capital loss. As with most things in life, no risk yields no...
Unfortunately, having a 529 Plan may affect your child’s eligibility for financial aid in the future
Income trusts are a type of company that has been structured to pass through all earnings to shareholders
Several services make it easy to accept bitcoin payments, or a programmer can help you set up your own node
A Merkle Tree is a technique widely used to create the blocks in blockchains
Market-on-open orders are looking to buy or sell immediately after the market opens, at the opening price
Turnover ratio is a term that can be used in reference to the rate at which a company goes through its physical inventory
Markets have been around for much longer than most people think. The Tulip bubble happened in the 1500's!
First things first, accumulate six months’ of cash as emergency savings. Then you can start investing