Hey girl, how do you buy Bitcoin ETFs?
You may think Bitcoin and Bitcoin ETFs are only for cryptobros in the know.
Oh wouldn’t they love you to think that.
Guess what, cryptocurrency exchanges are open to more than just those who like to think they run the world.
But first of all, why would you want to own cryptocurrency?
Why Own Crypto?
Owning cryptocurrency offers several benefits that traditional banks, fiat currencies, and credit cards cannot offer.
For starters, cryptocurrency investments, such as Bitcoin, provide the potential for high returns. Given their volatility, they offer an exciting opportunity for traders looking for high-reward (and high-risk) investments.
Additionally, cryptocurrencies enable peer-to-peer transactions, bypassing the need for a middleman like a bank, banking online payments, or other payment systems. This can mean avoiding hidden fees.
Their decentralized nature also provides a level of privacy and anonymity not typically offered by traditional payment methods.
Lastly, cryptocurrencies are not bound by exchange rates, interest rates, or transaction charges of any particular country, making them truly global. All these reasons make owning cryptocurrency an enticing prospect.
What Are Bitcoin ETFs and Why is Everyone Talking About This?
A Bitcoin ETF, in simple terms, tracks the price of Bitcoin and trades on traditional market exchanges, similar to ETFs for other commodities like gold or oil.
This means you can buy and sell shares of the ETF on a stock exchange, making it a convenient way to invest in Bitcoin without needing to deal with the complexities of purchasing bitcoin and storing actual Bitcoins.
The spot Bitcoin ETF pools investor money to purchase Bitcoin. The ETF removes some of the complexities of storage, and using different cryptocurrency exchanges.
Some may find investing in a Bitcoin ETF simpler than buying Bitcoin through an exchange account and storing it in a Bitcoin wallet, online wallet, or other method of storage to hold Bitcoin.
Everyone is talking about it because it just got SEC approval in January 2024.
Wait, What Is an ETF?
An ETF, or Exchange-Traded Fund, is a type of investment fund and exchange-traded product that is traded on a stock exchange. It is designed to track the performance of a specific index, sector, commodity, or asset like the Standard & Poor’s 500 Index or a specific commodity like gold.
ETFs are similar to mutual funds, but they trade like stocks on an exchange, experiencing price changes throughout the day as they’re bought and sold. This allows investors to buy into a diversified collection of assets in a convenient manner, without needing to individually purchase each asset.
ETFs have gained popularity due to their ability to offer broad market exposure, sector investing, and asset class exposure with the added advantages of providing transparency, liquidity, and cost-efficiency.
Why Does Everyone Care About Bitcoin ETFs?
Bitcoin ETFs offer a significant opportunity for mainstream investors to get exposure to Bitcoin. It brings a level of legitimacy and accessibility to investing in Bitcoin that was not previously available.
With Bitcoin ETFs, investing in Bitcoin becomes as simple as buying stocks, opening up the potential for wider adoption. Additionally, because ETFs are regulated by financial authorities, they provide a level of protection and security for investors that directly buying and holding Bitcoin does not.
We want something that will not only grow our savings but also offer us a sense of empowerment, financial freedom, and control. As the world digitalizes and cryptocurrency takes the center stage, we hear a lot about Bitcoin. The first of its kind, Bitcoin, is the most valuable and sought-after cryptocurrency globally.
One reason why everyone is talking about Bitcoin ETFs is the potential to usher in a new era of cryptocurrency investment. Bitcoin ETFs democratize access to Bitcoin, allowing investors to gain exposure to the popular cryptocurrency without the complexities and security concerns associated with buying and storing Bitcoin directly.
This opens the door to a broader array of investors including those who are less tech-savvy. ETFs are traded on traditional exchanges, and this adds a layer of regulatory oversight, which some investors might prefer.
The launch of a Bitcoin ETF signifies recognition of cryptocurrency as a legitimate and potentially lucrative investment asset class, generating excitement in the investment community.
OK, let’s dive in to how to comfortably start investing in a Bitcoin ETF.
Before investing in Bitcoin, ETFs or any other asset, you need to do your homework.
Read up on the history of Bitcoin, how it works, its pros and cons, and anything else that seems relevant.
How Do You Buy Bitcoin ETFs?
To purchase the Bitcoin ETF, you’ll first need to open a brokerage account if you don’t already have one.
Brokerage accounts are available from various financial institutions including Fidelity, TD Ameritrade, and Interactive Brokers. Once your account is set up, you can search for the Bitcoin ETF using its ticker symbol.
Remember to review the historical performance, risk level, and expense ratio before making a purchase. Once you’ve done your due diligence and decided to proceed, you will place a buy order.
You can choose a market order, which will purchase the ETF at the current market price, or a limit order, which will only purchase the ETF if it reaches a specific price you’ve set. After the transaction is complete, the Bitcoin ETF shares will appear in your brokerage account, and you will officially be an investor in a Bitcoin ETF.
What Are Some Bitcoin ETFs?
Grayscale Bitcoin Trust
Grayscale Bitcoin Trust (GBTC) is one of the most popular Bitcoin Exchange Traded Funds (ETFs) in the market. Established by Grayscale Investments, the Trust allows investors to gain exposure to the price movement of Bitcoin without the challenges of buying, storing, and safekeeping the digital asset directly.
As an investment vehicle, GBTC operates similarly to a traditional ETF. It holds Bitcoin in a portfolio, and its shares are traded on the public market. Hence, by buying shares of GBTC, investors can indirectly invest in Bitcoin. The Trust takes on the responsibility of managing the security and storage of the owned Bitcoin, thereby reducing the risks associated with handling digital assets.
However, it’s worth noting that the shares of GBTC often trade at a premium or discount to the actual value of the Bitcoin held in the Trust. Therefore, price discrepancies may exist between the trust and the actual market price of Bitcoin.
Purpose Bitcoin ETF
The Purpose Bitcoin ETF is another significant player in the Bitcoin ETF space. Launched by Purpose Investments, it’s reputed to be the world’s first physically settled Bitcoin ETF, which means it actually holds Bitcoin.
Investing in the Purpose Bitcoin ETF allows investors to gain exposure to Bitcoin’s price and its movements without actually owning the digital asset. This arrangement eliminates the need for individuals to deal with the technicalities of buying and safeguarding Bitcoin.
One of the noteworthy aspects of the Purpose Bitcoin ETF is its daily transparency, where the value of the Bitcoin held in the ETF is disclosed daily. This feature provides investors with a clear understanding of their holdings and leaves little room for price discrepancies.
However, like any investment, the Purpose Bitcoin ETF is not without risks. The volatile nature of Bitcoin prices means the ETF can experience significant price swings in short periods. Potential investors should, therefore, understand these risks and consider their risk tolerance before investing.
The Purpose Bitcoin ETF offers a simple and efficient method for investors seeking exposure to Bitcoin. It eliminates the technical challenges associated with buying and storing Bitcoin directly, while offering transparency and compliance with financial regulations.
How to Buy Bitcoin ETFs on Fidelity
To purchase a Bitcoin ETF using Fidelity, you must first log into your Fidelity account. If you do not have an account, you will need to set one up. After logging in, navigate to the “Trade” tab at the top of the page. In the trade ticket, type in the ticker symbol for the Bitcoin ETF you’re interested in purchasing. If you’re unsure of the ticker symbol, use the search feature to look it up using the ETF’s name.
Once you’ve input the ticker symbol, specify the order type. If you want to buy the ETF at its current price, select ‘Market Order’. If you prefer to wait until the ETF reaches a specific price, select ‘Limit Order’ and provide your desired price. Next, state the quantity of shares you want to buy.
Review your order to ensure everything is accurate. Once you’re satisfied, click ‘Place Order’. After your order is executed, the purchased Bitcoin ETF shares will appear in your Fidelity account. Remember to monitor your investment regularly to ensure it aligns with your financial goals and risk tolerance.
How To Buy the Bitcoin ETF on Robinhood
To buy a Bitcoin ETF on Robinhood, you must first have a Robinhood account. If you don’t have one, you can create it by downloading the app on your smartphone or signing up on their website. After creating and logging into your account, use the search bar at the bottom of the screen to find the Bitcoin ETF you wish to invest in. You can do this by inputting the ETF’s name or ticker symbol.
Once you have selected the ETF, you will be directed to its detail page. Here you can find information such as its current price, performance history, and analyst ratings. If you decide to proceed with the purchase, click on the ‘Trade’ button, followed by ‘Buy’.
You can then set your order type. If you want to buy the ETF at its current price, select ‘Market Order’. If you prefer to wait until the ETF reaches a specific price, select ‘Limit Order’ and input your desired price. You will need to specify the number of shares you want to purchase in the ‘Shares’ field.
After entering the required details, review your order, and if everything looks accurate, click ‘Review’. On the next screen, swipe up to submit your order. Once the order is executed, the Bitcoin ETF shares will appear in your Robinhood portfolio.
As with any investment, it’s important to review your portfolio regularly to ensure your investments are in line with your financial goals and risk tolerance.
How To Buy the Bitcoin ETF on Interactive Brokers
To purchase a Bitcoin ETF on Interactive Brokers, you first need an active account. If you don’t have one, visit their website or download the mobile app to set up an account. After logging into your account, navigate to the ‘Order Entry’ panel located typically at the bottom of the ‘Mosaic Order Entry’ window.
In the ‘Contract’ field, enter the name or ticker symbol of the Bitcoin ETF you wish to invest in. The platform will display a drop-down list of matching results. Select the appropriate ETF from the list, and the order entry fields will be automatically populated with the ETF’s details.
Next, set the order type. For purchasing at the current market price, select ‘Market’. If you want to buy when the ETF reaches a certain price, choose ‘Limit’ and input your desired price in the ‘Limit Price’ field. Then, enter the number of shares you wish to buy in the ‘Quantity’ field.
Finally, to submit your order, click the ‘Submit’ button. After the order is executed, the Bitcoin ETF shares will be added to your Interactive Brokers portfolio.
As always, keep a regular check on your portfolio to ensure it aligns with your financial objectives and risk tolerance level.
Bitcoin ETFs Are Not for Me: How Do You Buy Bitcoin?
Maybe the Bitcoin ETF isn’t for you and you want to own plain old Bitcoin.
Once you have a good understanding of Bitcoin, it’s time to pick an exchange on which to buy it.
Exchanges are digital platforms that allow you to buy and sell Bitcoin in exchange for other currencies or assets.
There are several exchanges to choose from, including Coinbase, Binance, Gemini, Kraken, and Bitstamp. Do your research on their fees, user interface, security, and reputation before settling on one.
Understanding Different Bitcoin Exchanges
Different Bitcoin exchanges offer different features, and their choice should depend on your individual needs and preferences.
Coinbase is a user-friendly platform perfect for beginners. It provides an intuitive interface and offers additional features such as recurring buys and price alerts. However, its fees can be higher compared to other exchanges.
Binance is known for its extensive selection of cryptocurrencies for trading. It provides advanced features for seasoned traders such as futures and margin trading. However, its interface might be overwhelming for beginners.
Kraken offers a good balance between user-friendliness and advanced features. It provides different services including spot trading, futures trading, and even an OTC desk for large transactions. Its fee structure is also competitive.
Bitstamp is known for its reliability and strong security measures. It offers a wide range of cryptocurrencies for trading and has a straightforward user interface. However, its deposit and withdrawal options may be limited compared to other exchanges.
Each of these exchanges has its unique offerings and limitations. Hence, it’s crucial to understand these differences to make an informed choice.
Sign Up and Verify Your Account
After picking an exchange, you will need to sign up for an account and follow the verification process to authenticate your identity. Most exchanges require you to provide your name, email address, phone number, government-issued ID, and proof of address. Once your account is verified, you can deposit funds into it using your bank account, credit card, or debit card.
With your account funded and verified, you can now proceed to buy Bitcoin. The process differs across exchanges, but generally, you will navigate to the Buy or Trade section, select Bitcoin, input the amount you wish to invest, and confirm the transaction. Your Bitcoin will be deposited into your exchange wallet, where you can hold or transfer it to a hardware wallet for safekeeping.
Congratulations on reading this far, ladies! You are now armed with the knowledge of how to buy Bitcoin and Bitcoin ETFs. Remember that like any other investment, Bitcoin comes with risks, so it’s crucial to exercise caution, diversify your portfolio, and only invest what you can afford to lose.
Furthermore, always stay informed about the market trends, regulatory changes, and security tips to keep your Bitcoin and personal information safe.
Remember, there is no rush in making your Bitcoin purchases or other cryptocurrency investments, for that matter. Take your time. Read, educate yourself, ask questions, and seek professional financial advice before you go to buy cryptocurrency or make any investment.