Cryptocurrency has come a long way over the last decade – and the fun is just getting started.
What started off as an esoteric technology confined to a small number of people has blossomed into a $2.5 trillion industry that has captured the interest of retail traders, Wall Street investors, and politicians.
It has become so popular and lucrative that countries, like El Salvador, have made it legal tender. This segment of the economy is still in the early stages as there is much more innovation and adoption to go.
Indeed, whether it is Bitcoin or Ethereum, new investors are contracting the crypto bug. No longer are newcomers confined to mining virtual tokens and signing up for digital exchanges vulnerable to cyber attacks and privacy breaches. In other words, cryptocurrency has gone mainstream as millions of investors worldwide pour their money into the BTC machine.
So, how do you even invest in cryptocurrency anyway? We have developed a list of several options to help you buy, sell, and trade digital coins:
1. Join an Exchange or Platform
Today, many different cryptocurrency exchanges and trading platforms facilitate an ecosystem of buying, selling, and trading Bitcoin, Ethereum, Cardano, Dogecoin, and even Shiba Inu. From Coinbase to Binance, there’s a wide range of crypto exchanges to choose from nowadays.
Moreover, many one-stop-shop trading platforms, such as eToro and Webull, have introduced cryptocurrencies into their outlet. This means that you can buy stocks, commodities, foreign exchange, and now digital currencies.
The fees for most exchanges are usually a commission based fee up-front or back-end while others have no fees but make money off the buy/sell spread. You should also only buy from long established and reputable exchanges and keep the crypto you buy in a secured wallet.
2. Buy from Your Broker (if applicable)
A growing number of brokerage firms have hopped on the crypto bandwagon. The major Wall Street and Bay Street firms have seen the trends and data points, so they ensured they could grab a piece of the crypto pie.
So, whether you are trading equities on Wealthsimple or acquiring mutual funds from RBC Global Asset Management, you could easily purchase units from conventional sources.
There are possible cons using your broker to buy Crypto. For one, you may not actual own the Crypto you buy via your broker. One of the main selling points of crypto is you can move it from wallet to wallet. Many brokers that offer crypto these days do not offer such a feature.
In this sense, you don’t actually own the crypto you bought, you’re simply “borrowing” it from your broker. However some brokers like Wealthsimple are promising to allow you to move the coins you buy to another wallet.
In addition, you should look at buying and selling fees with your investment broker. The spread they charge can be very high compared to a Crypto Exchange. Some brokers can also sell an additional buying and/or selling fee on top off the spread. While buying crypto via a traditional investment broker is convenient, it may not be cost effective yet.
3. Acquire Investment Funds
If you want to avoid owning Bitcoins or Avalanche directly, you can always purchase investment funds that are exposed to premier cryptocurrencies. While it has been difficult to establish an exchange-traded fund (ETF) in the United States, there are many unique crypto-denominated cryptocurrencies to choose from in Canada.
Here are just a few of your investment options:
- Bitcoin Strategy ProFund Investor (BTCFX)
- Global X Blockchain ETF (BKCH)
- Bitwise 10 Crypto Index Fund (BITW)
- Purpose Bitcoin CAD ETF Non-Currency Hedged (BTCC)
- VanEck Bitcoin Strategy ETF (XBTF)
4. Invest in Crypto-Related Stocks
Suppose you wish to diversify your crypto assets and a broader portfolio. In that case, you can look at stocks and ETFs that invest in the industry. They are ideal substitutes instead of vehicles solely concentrated in Bitcoin or cryptocurrencies.
Unsure where or what to look for in this vast marketplace? Here is a brief list of your options to consider inserting into your portfolio:
- HIVE Blockchain Technologies (HIVE)
- First Trust SkyBridge Crypto Industry and Digital Economy ETF (CRPT)
- Bitwise Crypto Industry Innovators ETF (BITQ)
- First Trust Indxx Innovative Transaction & Process ETF (LEGR)
- Siren Nasdaq NexGen Economy ETF (BLCN)
These types of investment funds give you access to a broad array of aspects related to the sector, from mining to innovation. Instead of waiting for the next big thing, these companies do the heavy lifting for you.
5. Go to a BTC Machine
What might have appeared as a gimmick in the pioneer days of crypto, Bitcoin ATM machines have turned into wise investments. Today, many people want to gather holdings of Bitcoin and other virtual tokens easily and painlessly. These function similarly to a regular ATM machine since a BTC machine is manufactured precisely for the premier cryptocurrency.
So, how does this process work? Here is a step-by-step breakdown of what you need to do:
- Set up your Bitcoin wallet.
- Bring this wallet or printed QR code with you to the BTC machine.
- Locate the nearest BTC ATM near you.
- Scan your Bitcoin QR code.
- Buy and receive your Bitcoins.
Remember, many of these ATMs offer more than just Bitcoin. They offer many of the premier digital tokens, whether it is Ethereum or Litecoin.
Despite its immense volatility, the future of crypto is bright. Stable coins, blockchains, NFTs, and the overall innovations taking place across the industry are exciting investors. Tech firms and crypto experts are devising technologies that can support smart contracts, enhance liquidity, and reduce transaction costs. And this is just the tip of the iceberg.
The sector has a lot more room for growth because of these types of developments. Since there are more than 10,000 coins to choose from, many first-time investors park their money in Bitcoin or Ethereum. This is a wise strategy for your investment portfolio when you are a novice in this field. So, how will you buy your crypto stake today?