Buy bitcoin directly
The first option is the most straightforward: If you want to buy bitcoin, just buy bitcoin.
These days, many platforms allow individual investors to buy and sell crypto. Just be aware that some exchanges charge up to 4% in commission fees for each transaction. So look for apps that charge low or even no commissions.
While bitcoin commands a five-figure price tag today, there’s no need to buy a whole coin. Most exchanges allow you to start with as much money as you are willing to spend.
More: Best investing apps
Exchange-traded funds have risen in popularity in recent years. They trade on stock exchanges, so it’s very convenient to buy and sell them. And now, investors can use them to get a piece of the bitcoin action, too.
For instance, ProShares Bitcoin Strategy ETF (BITO) started trading on NYSE Arca in October 2021, marking the first U.S. bitcoin-linked ETF on the market. The fund holds bitcoin futures contracts that trade on the Chicago Mercantile Exchange and has an expense ratio of 0.95%.
There’s also the Valkyrie Bitcoin Strategy ETF (BTF), which made its debut a few days after BITO. This Nasdaq-listed ETF invests in bitcoin futures contracts, and charges an expense ratio of 0.95%.
More: What stocks should I buy now if we're nearing a market bottom?
When companies tie some of their growth to the crypto market, their shares can often move in tandem with the coins.
First, we have bitcoin miners. The computing power doesn’t come cheap and energy costs can be substantial. But if the price of bitcoin goes up, miners such as Riot Blockchain (RIOT) and Hut 8 Mining (HUT) will likely receive growing attention from investors.
Then there are intermediaries like Coinbase Global (COIN) and Paypal (PYPL). When more people buy, sell, and use crypto, these platforms stand to benefit.
Finally, there are companies that simply hold a lot of crypto on their balance sheets.
Case in point: enterprise software technologist MicroStrategy (MSTR). It has a market cap of $2.3 billion. Yet its bitcoin count reached 129,218 at the end of March, a stockpile worth around $3.8 billion.
Sign up for our Moneywise newsletter to receive a steady flow of actionable ideas from Wall Street's top firms.
More from Moneywise
- ‘It’s so horrible that I want to buy it’ — Jim Cramer likes these 2 beaten-down tech names that are still posting white-hot revenue growth
- Goldman Sachs likes these 3 top dividend stocks yielding as high as 7.6% — in a manic market, locking down a growing income stream makes sense
- Warren Buffett just said he doesn’t own bitcoin because ‘it isn’t going to do anything’ — he’d rather own these 2 tangible assets instead
Meet Your Retirement Goals Effortlessly
The road to retirement may seem long, but with WiserAdvisor, you can find a trusted partner to guide you every step of the way
WiserAdvisor matches you with vetted financial advisors that offer personalized advice to help you to make the right choices, invest wisely, and secure the retirement you've always dreamed of. Start planning early, and get your retirement mapped out today.