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Buy and store securely

These days many platforms allow individual investors to buy and sell crypto. However, a quick glance at the California government's Crypto Scam Tracker will show you there are many fraudulent websites built for scams. Always make sure you're using a reputable exchange platform to buy any virtual currency. Some exchanges charge up to 4% commission fees for each transaction, so look for apps that charge low or even no commissions.

Experts recommend transfering your assets from your wallet on the exchange to a hardware wallet or a reputable non-custodial software wallet for additional security and control. This way you don't place your trust in the exchange and those running it to store your crypto, in case it ends up like FTX. A hardware wallet, being a physical device, stores your crypto offline, protecting it from online hacking threats. Meanwhile, a non-custodial software wallet gives you complete control over your private keys, while still offering the convenience of digital access. However, no storage method is completely safe and risks still exist.

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Crypto ETFs

Exchange-traded funds have risen in popularity in recent years. They trade on stock exchanges, so buying and selling them is very convenient. And now investors can use them to get a piece of the crypto 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, which holds Bitcoin futures contracts, has an expense ratio of 0.95%.

Investors can also consider 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%.

Crypto stocks

When companies tie some of their growth to the crypto market, their shares can often move in tandem with the coins.

First, there are crypto miners. The computing power doesn’t come cheap and energy costs can be substantial. But if the price of Bitcoin goes up, miners like Riot Platforms (RIOT) and Marathon Digital Holdings (MARA) are likely to receive increased attention from investors.

Then there are intermediaries like Coinbase Global (COIN). 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 around $10 billion. Yet its Bitcoin count reached approximately 189,150 as of Dec. 26, 2023, a stockpile worth over $8 billion at the current price.

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Jing Pan Investment Reporter

Jing is an investment reporter for MoneyWise. He is an avid advocate of investing for passive income. Despite the ups and downs he’s been through with the markets, Jing believes that you can generate a steadily increasing income stream by investing in high quality companies.

Disclaimer

The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.