What are the ways to invest in Bitcoin? Digital currencies

If you wanted to buy the virtual currency in 2013, one of the most common ways was to reach a public space, like the famous Union Square in lower Manhattan. There the buyers brought the cash, and the sellers brought their phones so that they could transfer the digital money. Sometimes they shouted what they were willing to pay or get, just like the old trading rooms on the stock exchange.

Today, you can still meet a guy in the park or go to a Bitcoin ATM, but there are other ways to get cryptocurrencies. One of the benefits of Bitcoin is that it is traded on liquid stock exchanges 24 hours a day, seven days a week. The smartphone apps give users one-touch access.

Join regular updates on the significant events today on the stock exchange – on the BizPortal telegram channel

However for investors who want to buy directly through a more traditional brokerage account, the options are still limited. And most importantly: there is no fund that trades in Bitcoin, and may not have one for years.

Payment apps for purchasing Bitcoin
In November, Bitcoin shattered its all-time high in December 2017 and even crossed the $ 20,000 threshold. Unlike the previous rally, this time Bitcoin is coming more mature into the financial markets, the investment methods are different and more diverse, and PayPal’s announcement (NYSE: PYPL) about two months ago was particularly significant: the company announced it would allow investors to purchase Bitcoin coins through its platform. This announcement launched the currency exchange rate and was a significant trigger in the rally of recent times, and even constituted another stamp for the currency, when it managed to get recognition from a financial entity on the order of PayPal. The method of purchase may be relatively simple and secure. Market estimates are that the fees charged by the company may be over 2%.

Twitter’s founder’s fintech company (SQ) jumped nearly 400 percent this year, with Bitcoin itself making a significant contribution: the company purchased $ 50 million worth of coins in early October at the perfect time. Since the announcement of the deal, the currency has jumped by about 100%. But beyond that, the company makes money from trading in Bitcoin – and enables the buying and selling of cryptocurrencies. Here, too, the market estimate is that the fees in the square are approaching 2%.

The third and one of the breakthroughs of the year is, of course, Robin Hood, which jumped under the auspices of the Corona Crisis – the free platform that allows trading on Wall Street and attracts young and inexperienced traders, plans to make an initial public offering early next year. Among other things, it allows for free trading in Bitcoin under certain restrictions that may make it difficult to make a buy and sell in the course of large fluctuations.

Every company has different rules about what you can do with your crypto once you buy it. Square allows shoppers to transfer their bitcoin to an unrelated “wallet”, which they can use to trade with other people, but PayPal and Robin Hood cause users to keep their crypto on the platform itself and sell for cash.

Ways to invest in Bitcoin
Investing through a mutual fund – Grayscale (NYSE: GBTC) is a relatively simple way for traders, this is because the virtual currency can be purchased through overseas trading accounts. High maintenance, there is usually a premium created between the price of bitcoin in the market and the price of the stock, so there are hidden costs.

Another way to be exposed to the Bitcoin exchange rate is through stocks. This includes another element of the company’s value, asset analysis, profit and loss, etc. A jump in the Bitcoin rate can definitely bounce the value of the paper and be a kind of option on Bitcoin. However, there may be situations in which companies are less profitable in practice, or that bad data weighs on the balance sheet and thus the rise in the exchange rate will not necessarily translate into a rise in the stock itself. For example, you can already see shares in the industry: Microstrategy (MSTR), which holds 38,250 bitcoins worth about $ 500 million, Square (SQ), which also holds bitcoin worth $ 50 million. Additional shares: RIOT, CAN, MARA, are of companies engaged in bitcoin mining.

The classic way for Bitcoin investors is of course through the purchase of the currency itself. Here you need to open a Bitcoin wallet and buy a currency through one of the various brokers that sell and buy Bitcoin: Bits of Gold, Bitin, or Bitcoin change. In this case the commissions can climb up to 6% -5%, but the advantage here is that the currency is yours. On the other hand, there are the existing risks of losing your wallet, theft, etc.

So what is the right way for you?