For investors, a tenuous investment like Bitcoin can provide quite the rush.
But protecting your investment is as important, if not more, than the decision to invest in the first place. The desire to make a strong investment in Bitcoin has many serious investors thinking about Bitcoin ETF.
Here’s what you need to know about this option.
What is Bitcoin ETF?
ETF is a shorthand for “exchange-traded fund”.
An exchange-traded fund represents an investor marketplace where assets are trackable.
Bitcoin ETF allows investors to buy and sell Bitcoin on an existing market like the stock exchange. This is important because it results in the indirect buying of Bitcoin as part of your larger investment portfolio.
Investors don’t have to worry about selling or storing the Bitcoin themselves.
Why is Bitcoin ETF More Expensive?
While one goal of ETFs is to keep prices lower, Bitcoin ETF has a premium that is arguably higher than purchasing regular Bitcoin for investment. The reason is simple supply and demand.
The Bitcoin Investment Trust (GBTC) provided by Grayscale Investments is the first successful attempt of it’s kind to provide an out-of-the-box solution for Bitcoin investors.
While the Bitcoin market fluctuates wildly, Bitcoin ETF has kept outstanding shares around 1.7 million for two years and does not want to change that anytime soon.
With a limited number of shares for investing and a convenient package that fits inside your investment portfolio GBTC trail blazes pricing for this unique investment product.
What are the Benefits of Investing in ETF?
Most investors want to way the benefits and drawbacks of an investment before making a decision. Here are some of the reasons why Bitcoin ETF may be a good fit for your portfolio:
- Ease-of-use: Bitcoin ETF is an inclusive solution for an exclusive, complex product. Using an ETF to trade Bitcoin takes some of the work out of ownership
- ETFs make room for new players: adding an all-in-one blockchain solution for the investment market is innovative and will make room for new players who have interesting ideas about how to invest in blockchain and Bitcoin
- Demand surge: like with anything, adding a new investment product will cause Bitcoin demand to surge, making it more equitable for investors who buy in early
These benefits make Bitcoin ETFs a compelling choice for investors looking to diversify their portfolio.
Final Thoughts
Bitcoin ETF may be a preferable choice over investing in standard Bitcoin.
That’s because this type of investment offers the benefits of being a Bitcoin investor without the hassle of managing your coins in a wallet or personally dealing with a Bitcoin exchange platform.
This investment is also highly innovative and makes room for other firms to capitalize on cryptocurrency and blockchain investments.
For those new to Bitcoin investments, it may make sense to consult a professional before taking the dive.
But Bitcoin ETFs offer a lower risk alternative to investing in a traditional Bitcoin marketplace, and investing now could have its benefits in terms of equity.
For more information on how to invest in Bitcoin, visit our website.