In this article, you’ll learn:
What digital assets are
How cryptocurrencies like bitcoin work
Different ways to invest in crypto
Key risks to consider
Digital assets are assets that exist electronically rather than physically. Their value is linked to digital ownership and is often supported by blockchain technology.
Common types include:
When people talk about “crypto,” they are usually referring to cryptocurrencies. Bitcoin was the first cryptocurrency and remains the most widely known digital asset.
There are different ways to gain exposure to cryptocurrencies such as bitcoin.
One option is to invest directly by buying through a crypto exchange, which typically involves setting up a digital wallet and managing custody and security yourself.
You can also invest through a crypto ETP. These are exchange-traded products that track the price of a cryptocurrency, allowing investors to gain exposure to digital assets through a standard brokerage account without needing to own or store the asset directly
A crypto ETP is an exchange-traded product designed to track the performance of a specific digital asset, such as bitcoin.
Unlike traditional ETFs, which usually hold a diversified basket of assets, crypto ETPs typically track a single cryptocurrency. However, they are traded on stock exchanges in a similar way to ETFs and can be bought and sold like shares.
Some investors prefer ETPs as a way to access crypto markets.
Potential advantages include:
ETPs can be traded via a regular brokerage account, without the need for a separate crypto wallet or navigating crypto exchanges.
Investing through an ETP removes the need to manage private keys or digital wallets.
ETPs are typically designed to track the price of the underlying asset.
Digital assets involve significant risk. Key considerations include:
Even when accessed via ETPs, these risks remain.
Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed.
Crypto ETPs may be considered by investors who:
As with any investment, it is important to consider overall portfolio strategy, individual risk tolerance and personal objectives.
Cryptocurrencies are now part of global financial markets. For investors interested in this asset class, crypto ETPs can offer a structured and accessible way to gain exposure—without directly holding digital assets.
Digital assets are a new and evolving asset class
Crypto ETPs provide exchange-traded access to cryptocurrencies
They offer a simpler way to invest compared to direct ownership
Crypto investments involve high risk and volatility
Getting started with investing doesn t have to be complicated. With a clear plan and a long term perspective, even small steps can make a difference over time. Many investors begin with a few simple steps:
Consider what you want to achieve and how investing fits into your plans.
You'll need an investing account with an online investment platform, bank or provider.
A diversified portfolio may include equities, bonds and ETFs.
Investing gradually over time can help manage market fluctuations.