The debate over investing in cryptocurrency is always exciting. The problem mainly stems from the fact that this is still a foreign concept. Even though Bitcoin (BTC-USD) has been around for some time, it’s still a touchy subject. Today, I will suggest the best crypto eschange-traded funds (ETFs) to buy, so as to participate in crypto investing with as little controversy as possible.
First we should touch up on the typical points of contention over Bitcoin and its cohorts. Money is likely going completely digital and these crypto opportunities are laying that groundwork. Eventually the concept of electronic assets like crypto will become the norm. Current holdouts will have to join the ranks, just like they did with the internet.
Until then, we can rest assured that there is enough demand to keep them relevant. The trick is for investors to handle the draw-down periods. Those who do even just to a minimal degree have likely done well trading crypto.
I seek to limit the giant risky part of investing in crypto. That’s deciding who to trust with your money. Choosing a secure platform that won’t disappear with your money is job number one. When I got started, I opened accounts in six platforms, but only trusted one. Even then, I occasionally feel uneasy about the security of my assets there.
Crypto experts would suggest transferring and storing digital assets to cold storage. That way, only I have access to them, thereby eliminating the possibility of fraud. But that process also proved daunting and costly. I tried replicating my successful staking process in my own wallet, but it was cost prohibitive.
The bottom line is that the only way to really eliminate this platform security risk is to avoid it. Alternatively, investors can participate by finding crypto ETFs to buy. This massive correction in Bitcoin offers a decent window to start now.
|GBTC||Grayscale Bitcoin Trust||$12.98|
|BITO||ProShares Bitcoin Strategy ETF||$12.68|
|VERS||ProShares Metaverse ETF||$34.35|
Best Crypto ETFs: Grayscale Bitcoin Trust (GBTC)
If you are not seeking to use options to invest in a crypto ETF, then I would choose the Grayscale Bitcoin Trust (BTC) (OTCMKTS:GBTC). This one has existed for a while, so it already has a following. The traders that I know who use it, love it. Therefore, these fans will come to its aid when necessary. But they cannot do that beyond what the BTC-USD price is doing to it. So for now, it has fallen on hard times like the rest of the sector.
Bitcoin prices completely dictate how well you do with GBTC, but that’s the point. This is a great vehicle to participate in the Bitcoin trade without the hassle of crypto platforms. Technically, the sector is trying to shake off a devastating correction that started last fall. The charts predicted it, so we should use them as guides to gauge the bottom spot.
Currently, there is a fight going on in GBTC charts to determine if they bounce 20% or lose another 40%. Pivotal points like these make for bad all-in entry points. There is a happy medium and that’s to nibble a small starter position. Averaging into a full trade is a good way to split the difference ahead of time.
Since they don’t ring bells at perfect entry points, investors must use logic to discern their own. There is a path to redemption, but it could take a bit of time. The GBTC came to life within the U.S. markets regulations. So, it really eliminates most of the deposit risk of all other crypto platforms.
ProShares Bitcoin Strategy ETF (BITO)
Bito (NYSEARCA:BITO) provides extra comfort knowing that my money is safe within my own account. It looks ugly on the charts, but that’s because it began during the last Bitcoin peak. Naturally, its history only shows downside trends with a never-ending bottom. But that will change once cryptos stabilize.
Last year, when BITO was created, it scored a win for cryptocurrencies. The more financial products like this that come to life, the more likely crypto will sneak into the mainstream. The fact that this tracks the actual futures prices for Bitcoin makes it a legitimate proxy. Investors who want a direct relationship to the chief coin can use BITO.
This will make its asset under management value relevant enough for it to matter for the long term. I have recently found it a convenient vehicle to trade Bitcoin short term. But since it is $12 per share, it makes sense as an initial crypto investment with very little risk on the line. Technically, investors in BITO are selling rallies.
The bottom is usually a process and it won’t start until we establish a bit of higher-low trend for about a week. This hasn’t happened yet, so it is best to take a small position and wait.
Best Crypto ETFs: ProShares Metaverse ETF (VERS)
The metaverse is likely be the next social media revolution. The addition of the camera to our phones may have changed the world. From it came the possibility of social media. Clearly, the world embraced it with open arms, as we are now fully committed to its next iteration. Meta Platforms (NASDAQ:META), the company that brought us Facebook, averred its intentions to move into the metaverse space. They even changed the company name and ticker to match its mission.
The metaverse will be a blend of fiction and reality and crypto will play a big role there. To live in the metaverse, we will need currencies to match. For that, there will be hundreds of them springing up, like Decentraland (MANA-USD) and Zilliqa (ZIL-USD).
Since this stage is still in its infancy, whatever ETF we choose will not have a strong history. Today, I offer the very new ProShares Metaverse ETF (NYSEARCA:VERS). It is important to note the newness of this trading vehicle. With that comes the responsibility of knowing how risky it is. With the lack of a track record, investors are placing their faith on future successes.
Technically speaking, there is immediate risk. If VERS makes a new low, it would likely accelerate lower by another 10% or more. This is my cautionary note against believing too harshly in my thesis. I do believe that crypto will deliver great profits to its investors. But I am patient in finding a good base for the next rally. This week or next we should get more clarity on this, so exercise patience until then.
On the date of publication, Nicolas Chahine did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.