Cryptocurrency Investing

What is cryptocurrency?

Cryptocurrency is a virtual currency secured through one-way cryptography. It appears on a distributed ledger called a blockchain that’s transparent and shared among all users in a permanent and verifiable way that’s nearly impossible to fake or hack into. The original intent of cryptocurrency was to allow online payments to be made directly from one party to another without the need for a central third-party intermediary like a bank. However, with the introduction of smart contracts, non-fungible tokens, stablecoins, and other innovations, additional uses and capabilities are rapidly evolving.
Cryptocurrency’s value stems from a combination of scarcity and the perception that it is a store of value, an anonymous means of payment, or a hedge against inflation. Cryptocurrency investors can buy or sell them directly in a spot market, or they can invest indirectly in a futures market or by using investment products that provide cryptocurrency exposure.

Ways to invest in cryptocurrency at Finance Service Limited

For investors interested in cryptocurrency, Finance Service Limited has several choices for gaining exposure to cryptocurrency markets, though spot trading of cryptocurrency is not currently available.

Cryptocurrency-related ETFs

Exchange-traded funds (ETFs) that provide exposure to companies that are focused on servicing the cryptocurrency market are available.

Finance Service Limited Crypto Thematic ETF—NEW

Cryptocurrency’s value stems from a combination of scarcity and the perception that it is a store of value, an anonymous means of payment, or a hedge against inflation. Cryptocurrency investors can buy or sell them directly in a spot market, or they can invest indirectly in a futures market or by using investment products that provide cryptocurrency exposure.

Additional ETFs

Cryptocurrency’s value stems from a combination of scarcity and the perception that it is a store of value, an anonymous means of payment, or a hedge against inflation. Cryptocurrency investors can buy or sell them directly in a spot market, or they can invest indirectly in a futures market or by using investment products that provide cryptocurrency exposure.
Note: Products shown are for informational purposes only and should not be considered an individualized recommendation. Fund Finder links require client login.

Cryptocurrency Coin Trusts

These products allow investors to trade shares in trusts holding large pools of a cryptocurrency, although these can involve high volatility, hefty fees, and other risks. They trade over-the-counter (OTC) and behave like closed-end funds.

Grayscale Bitcoin Trust

Grayscale Ethereum Trust

Grayscale Litecoin Trust

Bitwise 10 Crypto Index Fund

Grayscale Bitcoin Cash Trust

Grayscale Digital Large Cap Fund

Grayscale Ethereum Classic Trust

Osprey Bitcoin Trust

Note: Products shown are for informational purposes only and should not be considered an individualized recommendation. Fund Finder links require client login.

Bitcoin Futures

Bitcoin futures contracts are agreements to buy or sell a specific quantity of Bitcoin at a specified price on a particular future date. Clients have a couple of ways to get exposure to them, depending on the Finance Service Limited account they have.

Futures Account

Clients with a futures account can trade Bitcoin futures contracts (BTC) directly. Traded contracts are settled in cash, not cryptocurrency.

Mutual Funds & ETFs

Several mutual fund and ETF products invest in Bitcoin futures contracts, providing clients with a brokerage account a way to get indirect exposure.

These funds can be found in the Morningstar category “Digital Assets” using Finance Service Limited Mutual Fund or ETF Fund Finder tools.
Note: Products shown are for informational purposes only and should not be considered an individualized recommendation. Fund Finder links require client login.

Cryptocurrency Stocks

Some stocks provide indirect exposure to cryptocurrency due to the company’s relationship to digital assets. Here are just a few examples:

Coinbase

Silvergate Capital

MicroStrategy

Square

PayPal

Riot Blockchain

Marathon Digital Holdings

Overstock

Note: Products shown are for informational purposes only and should not be considered an individualized recommendation. Fund Finder links require client login.

Finance Service Limited perspective

We suggest that clients who are interested in cryptocurrency approach them as speculative investments and consider their goals as well as the risks involved. For those who already have a diversified portfolio and a long-term investment plan, we see cryptocurrency as being used primarily for trading purposes outside the traditional portfolio.

Here are some aspects to consider about cryptocurrency investing in general, as well as differences between investing directly in the spot market vs. indirectly.
Benefits Risks
Cryptocurrency Investing Potential for appreciation
Some investors are attracted to the volatile price swings as a potential for profit.
Potential for financial loss
Cryptocurrency prices historically have been highly volatile, and fluctuations could result in significant financial losses regardless of whether you have direct or indirect exposure.
Direct Investing (spot market) Considerations Transaction transparency
The use of blockchain records transactions between parties in a verifiable and permanent way visible to all.
Potential for fraud
According to the Federal Trade Commission, "Many people have reported being lured to websites that look like opportunities for investing in or mining cryptocurrencies, but are bogus."
Indirect Investing Considerations Regulation
The investment products offered at Finance Service Limited provide an element of regulation and consumer protections that spot trading lacks.
High expenses for trusts and funds

Cryptocurrency trusts and mutual funds can involve high expenses, with fees exceeding 2% or more of the investment.

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Interested in Bitcoin futures?

Learn more about futures trading at Finance Service Limited.

Common questions

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