Bitcoin has already disrupted almost every economic sector today despite it still being a new form of currency. While those disruptions might scare off some people, they are great opportunities for every business to capitalize. Besides, you can still make significant profits in Bitcoin without actually owning the tokens. That would allow you to make money without facing the serious financial risks caused by volatility.
Challenges of Investing in Bitcoin Directly
Despite the constantly increasing Bitcoin value, owning the digital currency also comes with unique challenges. And, that is why you may want to consider other alternatives for investing in Bitcoin without owning it.
The first step is selecting a reputable Bitcoin exchange platform such as Crypto Genius Trading App and register. Most exchanges require users to submit proof of identification like a national ID, passport, or bank account statement before verifying their accounts.
You’ll only buy Bitcoin tokens after the exchange has verified your account. Sometimes, purchasing small amounts of Bitcoin could come with higher transaction costs. It won’t surprise me if the crypto exchange asks you to pay the same amount of Bitcoins in transaction fees.
You will then need to transfer the acquired Bitcoins into your Bitcoin wallet, online or offline. A hardware wallet is the best since it ensures your Bitcoins are secure even if the crypto exchange platform fails. It also protects your assets from the threats of scammers and hackers.
Investing in Bitcoin also means you have to report taxes on the investments. Some countries have very harsh legislation for cryptocurrencies. However, you can now avoid all that headache and still make money by investing in Bitcoin indirectly.
How to Invest in Bitcoin Indirectly
The following are some of the main ways of investing in Bitcoin without owning it.
ETF (Stock Ticker GBTC)
GBTC is Grayscale’s Exchange Traded Fund product, offering a Bitcoin Investment Trust, with shares titled in the investor’s name. It is a traditional investment vehicle with robust security and storage since they store the assets offline in cold storage. These are eligible shares with the public quotation, allowing investors to buy or sell constantly through the trading day at the market prices. However, you should visit the Grayscale Bitcoin Investment Trust website to find out if that ETF is the best product that suits your needs.
Bitcoin Futures (Future Ticker BTC on CME and XBT on CBOE)
Bitcoin Futures are financial agreements obliging the seller to sell Bitcoin and the buyer to purchase those tokens at a pre-determined date and price. If you expect Bitcoin’s price to increase, you can buy Bitcoins through a futures contract at the current price and sell at a higher value later. Bitcoin futures can also enable you to avoid the risks of unfavorable price movements.
Both BTC and CFE track the Bitcoin price, traded on TradeStation. However, BTC futures’ value is usually much higher than XBT futures, about 5times the current Bitcoin price.
Overstock.com (Stock Ticker OSTK)
Overstock.com is an online retailer selling surplus and returned merchandise. The platform began accepting payments in Bitcoin in January 2014 and keeping 10% of their Bitcoin earnings. However, the board of directors decided in 2017 that the company would now retain half of all the Bitcoin payments instead of exchanging them for fiat currency. Overstock.com currently owns vast Bitcoin holdings and trades on the NASDAQ Stock exchange.
Although investing in Bitcoin indirectly might seem like an attractive option, reputable crypto exchanges make it easier even for beginners to access Bitcoin. Many platforms now have apps with intuitive and easy-to-use features, making it more straightforward for users to buy, sell, store and trade Bitcoin and other digital currencies.
