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Tuesday, September 28, 2021

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What is it (and what else you should know if you like cryptocurrencies)

It is true that Bitcoin is shaping up to be a major crypto asset for the foreseeable future.

The numbers around this asset are obvious. Although its share of the cryptocurrency market has declined markedly, it still has tangible leadership.

According to information from JP Morgan, Bitcoin currently represents just over 40% of the cryptocurrency market.

The advancement of the currency is viable; however, its future is not a guarantee and the volatility in its valuation has shown that nothing is said.

This is one of the reasons why investors in this cryptocurrency demand the implementation of a Bitcoin ETF in the US, although there are already some available in the European markets. But what is this?

In principle, it is fair to recognize that the so-called ETFs (Exchange Traded Funds) or funds that are traded on the Stock Exchange can be made up of stocks, bonds, raw materials or anything else added to a basket of values. The fund can be a variety of stocks that cross many fields; It can be based on a specific index, or it can be stocks concentrated in a certain sector, such as energy, real estate, or healthcare, to name a few. ETFs are in themselves a value investment, which in its different versions are capable of delivering various advantages.

In this way, a Bitcoin ETF would work very similar to any other ETF. But instead of tracking a market exchange like the S&P 500 or the Dow Jones Industrial Average, a bitcoin ETF would track the price of bitcoin. When the price of bitcoin increases, the price of a share in the ETF would also increase.

If a Bitcoin ETF is approved in the US markets, it would combine the best parts of two popular investments: the ease of investing in an ETF and the exposure to the popular cryptocurrency.

So far, at least in the United States, there is no Bitcoin ETF, although investor interest in cryptocurrencies does not appear to be waning.

For various reasons, this would give investors various advantages around these increasingly common processes:

  • Easy access to the world of cryptocurrencies.
  • Simplify investing in cryptocurrencies.
  • Deliver greater security by storing and protecting Bitcoins.
  • ETFs can be traded directly from investors’ existing brokerage accounts.
  • Investing in a Bitcoin ETF would eliminate the need to learn a new (and potentially complicated) cryptocurrency trading platform.

Although there are still many obstacles to reaching this ideal, it is true that the regulation around Bitcoin could soon improve the operating conditions of the cryptocurrency, with which a Bitcoin ETF could be closer than we all believe.

Would you like to invest in Bitcoin?

eToro is a regulated entity, in Europe by the Cyprus Securities and Exchange Commission and in the UK by the FCA. Likewise, it is registered with the CNMV within the Investment Services Companies section of the European Economic Area in Free Service. It also has the Australian ASIC regulation. CFDs are highly leveraged and risky, and may not be suitable for all investors, 67% of individual accounts lose money when using CFDs. This content is for informational and outreach purposes only and should not be construed as investment advice or recommendation. Past performance is not an indication of future performance.

Tammy Sewell is our Writer and Social at OICanadian.com. Tammy loves sports, she writes our celebrities news. She spends time browsing through several celebs news sources as well the Instagram. Email: [email protected] Phone: +1 513-209-1700

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