How to invest in bitcoin without buying it directly?
The bitcoin price is extremely volatile. The cryptocurrency has been challenged since its all-time high of $69,000 on November 10, but it is showing a strong long-term rise and could grow further in the years. If you want to invest in bitcoin, and bet on an increase in its value over time, you can go through a cryptocurrency exchange platform to get it directly.
In this case, you must have an electronic wallet and imperatively retain the password allowing access to it, under penalty of losing your assets. Many users have never gotten their hands on their cryptocurrency. If you instead go through a specialized broker, such as Coinhouse, the first in France, he will be able to take care of the funds..
Invest your money in company stocks
To do this, there is no need to make a selection yourself, which would require very specific knowledge of the subject. Investment professionals have already taken care of this. You can therefore already subscribe to funds which group together various shares of listed companies, whose activity is closely linked to cryptocurrencies or which have decided to invest in bitcoin.
“It allows you to bet more on the technology behind bitcoin – the blockchain – rather than just buying a speculative asset,” explains Vincent Boy, market analyst at broker IG. “These funds make it possible to invest in companies in the sector, which can evolve according to the use of the blockchain. Even if the cryptocurrency drops a little, these tech companies could still make significant progress.”
An unlisted fund
trading platforms, companies that are developing technologies related to cryptocurrencies and groups that have invested heavily in bitcoin.
Mining is the activity that validates transactions in bitcoin and other cryptocurrencies on blockchain technology. The Canadian miner Bitfarms, for example, is part of the Tobam fund, dubbed “BTC Linked and Blockchain” (BTC being the stock symbol for bitcoin). There is also the American cryptocurrency exchange platform Coinbase, the American company Galaxy Digital, specializing in financial services related to digital assets and the blockchain, or even Nvidia, manufacturer of electronic chips, components essential to the functioning of mining machinery.
Also included in this fund is the software publisher MicroStrategy, which stands out for its investments in bitcoin and had some $2.41 billion on its balance sheet as of September 30, according to the Wall Street Journal .
An ETF listed on Euronext
A second fund for the general public exists in France. Marketed by Melanion Capital, it obtained AMF approval in July 2021, to make its debut on Euronext Paris in October. It is an ETF (Exchange-Traded Funds), a fund whose purpose is to replicate the performance of an index or an asset (CAC 40, Nasdaq, etc.). In this case, the fund of Melanion Capital aims to reproduce the evolution of the price of bitcoin.
For this, the manager relies on a basket of shares of companies in the crypto and blockchain ecosystem. Called “BTC Equities Universe”, its fund “does not guarantee any level of correlation with the price of bitcoin”, specifies Cyril Sabbagh, head of ETFs for the company. “But in fact, we observe a correlation of about 80%,” he adds. Shares of companies similar to those present in the fund launched by Tobam are included, such as Binance or MicroStrategy. Only companies with a market capitalization greater than $100 million were selected.