ProShares Bitcoin Strategy ETF (BITO)

Thomas Lee of Fundstrat
Bitcoinist/Twitter

This is the ETF that’s making all the headlines.

ProShares Bitcoin Strategy ETF doesn’t invest in bitcoin directly. Instead, the fund holds bitcoin futures contracts that trade on the Chicago Mercantile Exchange.

BITO made its debut on Oct. 19, starting with $20 million of seed capital. By the end of the day, it had jumped 4.8% and hauled in more than $570 million in assets.

The momentum continued on Wednesday as the price of bitcoin surpassed $65,000 for the first time, with BITO gaining another 3%.

Investing in ETFs is as easy as buying a stock. They’re listed on major stock exchanges and trade throughout the trading day.

But of course, you can also invest in Bitcoin directly. These days, some investing apps allow you to buy cryptocurrencies and ETFs commission-free.

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Bitcoin stocks

Bitcoin and Tesla logo seen on paper document.
mundissima/Shutterstock

If you don’t want direct exposure, consider investing in companies that are highly exposed to the crypto market.

Tesla, for instance, owns close to 42,000 bitcoins according to CEO Elon Musk’s Twitter account. When bitcoin moves, Tesla shares tend to follow suit.

PayPal is another crypto play. Last October, the company launched a service in the U.S. that allowed users to buy, sell, and hold cryptocurrencies. It introduced a similar product for the U.K. in late August.

And then there’s Coinbase, which runs the largest cryptocurrency exchange in the U.S. Its retail monthly transacting users reached 8.8 million at the end of Q2.

To be sure, these stocks aren’t cheap. Tesla trades at around $866, PayPal is at $255, while Coinbase commands a share price of over $300 thanks to the recent rally in cryptocurrencies.

But you can get a piece of these bitcoin plays using a popular stock trading app that allows you to buy fractions of shares with as much money as you’re willing to spend.

Buy bitcoin directly

Golden coins with bitcoin symbol on a mainboard.
Momentum Fotograh/Shutterstock

While plenty of excitement surrounds new bitcoin ETFs, don’t forget the most straightforward way to invest in cryptocurrencies: buying the tokens directly.

Things are volatile in the crypto world, but bulls like Lee see a new equilibrium in supply and demand for bitcoin in the price range of $168,000.

Today, many crypto exchanges charge up to 4% in commission fees just to buy and sell crypto, but some investing apps charge 0%.

And there’s no need to buy a whole coin. You can start with as a little as $1.

Fine art as an investment

Stocks can be volatile, cryptos make big swings to either side, and even gold is not immune to the market’s ups and downs.

That’s why if you are looking for the ultimate hedge, it could be worthwhile to check out a real, but overlooked asset: fine art.

Contemporary artwork has outperformed the S&P 500 by a commanding 174% over the past 25 years, according to the Citi Global Art Market chart.

And it’s becoming a popular way to diversify because it’s a real physical asset with little correlation to the stock market.

On a scale of -1 to +1, with 0 representing no link at all, Citi found the correlation between contemporary art and the S&P 500 was just 0.12 during the past 25 years.

Earlier this year, Bank of America investment chief Michael Harnett singled out artwork as a sharp way to outperform over the next decade — due largely to the asset’s track record as an inflation hedge.

Investing in art by the likes of Banksy and Andy Warhol used to be an option only for the ultrarich. But with a new investing platform, you can invest in iconic artworks just like Jeff Bezos and Bill Gates do.

About the Author

Jing Pan

Jing Pan

Investment Reporter

Jing is an investment reporter for MoneyWise. Prior to joining the team, he was a research analyst and editor at one of the leading financial publishing companies in North America. An avid advocate of investing for passive income, he wrote a monthly dividend stock newsletter for the better half of the past decade. Jing holds a Master’s Degree in Economics and an Honours Bachelor of Science Degree, both from the University of Toronto.

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