These days bitcoin continues to outperform many traditional assets as the decentralized currency has become the premiere digital asset class of the 21st century. There are many ways individuals can obtain bitcoins and hold the appreciating investment themselves. However, there are also other traditionalized methods where people can invest in cryptocurrencies through trusts, self-directed IRAs, hedge funds, and other investment vehicles.
In 2017 Bitcoin Visibility Increases Among Mainstream Investors and Traditional Fund Managers
Bitcoin’s performance as an asset class continues to outshine traditional investments like stocks, precious metals, and the bond market. Just recently the well-known mainstream financial publication Bloomberg called bitcoin an “exchange traded fund (ETF) on steroids.” Furthermore, people have found that there are other ways to invest in bitcoin which are similar to traditional individual retirement accounts (IRA), or stock market investments. This includes cryptocurrency based investment trusts, exchange-traded notes and many more types of methods.
So far in 2016 and the past six months of 2017 cryptocurrency funds have soared in value considerably compared to traditional assets. Some of these traditional investment rails just offer bitcoin while others offer a basket of cryptocurrencies that can sometimes outperform one single digital asset if managed properly.
BK Capital Management
The BKCM investment asset fund was created by CNBC host and investment analyst Brian Kelly. The firm specializes in the macro-economics of digital assets and offers mainstream investors exposure to currencies like bitcoin. BKCM says its managers are fluent in “traditional capital markets, blockchain assets, and technology experience.” According to the company’s website, the fund focuses on “liquid exchange” digital assets. Kelly has been an active proponent of bitcoin and other emerging digital assets throughout many of his broadcasts on the network CNBC.
Grayscale’s Bitcoin Investment Trust
The Grayscale Bitcoin Investment Trust(GBTC) is a fund run by the Digital Currency Group’s (DCG) Barry Silbert. The DCG founder Silbert has been well known among investment circles when he created the brokerage firm Secondmarket and since then focused his efforts towards cryptocurrencies and blockchain startups. The publicly quoted GBTC is an easy way for investors to get exposure to bitcoin. The Bitcoin Investment Trust has outperformed the S&P 500, gold shares, and treasury bonds by gaining 220.59 percent this year. Moreover, GBTC shares trade at a premium compared to an individual purchasing bitcoin traditionally through an exchange. Alongside this, Grayscale also offers an Ethereum Classic fund that is similar to GBTC.
Ark Investment Management
Ark Innovation (ARKK) is a fund that invests in innovative technologies and companies, as well as funds like GBTC. Ark investment says they see the internet, mobile, and other technologies transforming the world’s business models. “We’re believers in bitcoin, the currency, and Bitcoin, the technology platform,” explains Ark’s Founder and Chief Investment Officer Cathie Wood. Currently, Ark has four ETF’s for investors to choose from which include the Industrial Innovation ETF, Web x.0 ETF, Genomic Revolution Multi-Sector ETF, and the Innovation ETF.
Invest in Bitcoin and Bitcoin Mining via Self-Directed IRAs
There are other ways investors can add bitcoin to their portfolios like self-directed IRA. A California-based company allows you to purchase bitcoins or ethereum with traditional IRAs or a 401K. The firm’s offering is a modest interest bearing account that utilizes the high returns from ETH and BTC markets.
Another self-directed IRA company, BitcoinMiningIRA.com also allows investment in bitcoin and ethereum for buy and hold, but it has added another service, Bitcoin Mining Contracts, as an additional investment vehicle to be held in a self-directed IRA. While there is no crystal ball, these mining contracts (much like an annuity) are currently yielding an attractive 10-15% monthly income, while also capitalizing on bitcoin appreciation. Abigail Johnson, CEO of Fidelity Investments is bullish on bitcoin and now also on Bitcoin Mining. In a recent article “one of Fidelity’s projects is mining bitcoin and ethereum, which Johnson said was started for educational purposes, but now turns a tidy profit.” Fidelity does not provide a service for alternative investments such as bitcoin, however Johnson said, “We set up a small bitcoin and ethereum mining operation… that miraculously now is actually making a lot of money.” Other self-directed IRAs can allow people to purchase bitcoin as well through companies offering managed cryptocurrency funds trusts. “Technology is having a transformative effect on our daily lives, and the alternative investment industry is no different,” explains Millennium Trust.
Mainstream Investment funds and IRAs That Include Bitcoin Are Prospering
There are many other ways mainstream investors can gain exposure to bitcoin rather than purchasing it directly, and more are popping up in great number. Just recently Bitcoin.com reported on Britain’s largest online trading platform, Hargreaves Lansdown, which has announced it will allow its customers to invest in bitcoin. The firm commands over £70bn of investors funds and will allow its 876,000 customers access to the decentralized currency. With cryptocurrencies performing so well and gaining in value exponentially many more mainstream funds and IRAs are likely to include digital assets for their customer’s portfolios. While there are no ‘official’ Securities and Exchange Commission approved ETFs at the moment there are still plenty of similar investment options in 2017.
Primary Credit: Jamie Redman
Jamie Redman is a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source code, and decentralized applications. Redman has written hundreds of articles about the disruptive protocols emerging today.
Dislaimer: This is not investing advice, this website is for educational purposes only.