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A lot of people who are considering a bitcoin investment vehicle or trying to determine whether it is comparable to a stock or bond. Of course, it is a little bit more complicated than that not in the least because bitcoin isn’t a physical currency and it is also not possible for it to go public as a corporation or company. As a result, you can’t really say that there is a bitquence stock. However, as you can buy and sell bitcoin just like any other asset, it could be said that the value of bitcoin is it’s stock price period this is a price that you can track just like you track other portfolio stock.
A Bitcoin Investment Vehicle
Seeing bitcoin as an investment vehicle can also be done in different ways. For instance, you could consider the Bitcoin Investment Trust or the GBTC. This actually works in similar ways as a regular exchange traded fund. It is a type of trust that holds bitcoin and you can purchase shares of this trust. This means you continue to bets that the value of bitcoin will fluctuate but you will not actually own any yourself. Rather, they are stored through Xapo, Inc.
Doing so can be a really interesting manner of getting to know the Bitcoin market without having to figure out how to purchase cryptocurrency yourself. However, the premiums are incredibly high. Recently, the GBTC stock split in order to become more affordable, but it continues to require a very steep premium. Shares are currently worth around $6.77 but they sell for about $10.70. And that is without paying for the management fee. Hence, most agree that if you do want to invest in Bitcoin, it is actually better to simply buy your own.
Alternatively, you can consider bitcoin futures, which is another way to invest in its value without buying your own. And essentially, you will hear that on what the value of the currency will be in a set period of time. This means you can purchase future contract for both price rises and price drops. If you guessed it right on the expiration of your contract comma you will gain an equal amount. The Chicago Board Options Exchange (CBOE) and the CME Group are two places where you can take out bitcoin futures contracts. However, if this is something that interests you, you absolutely have to start by understanding the pros and cons of taking out a futures contract. It’s called tracks is leveraged, meaning that you will only pay a fraction of the actual price of the Bitcoin when you purchase them, which is what gives you a chance to make a profit. On the other hand, the expiration dates of these contracts is generally quite close. Should, on expiration, the price have gone down when you gambled that it would go up, it is not possible for you to continue to hold your contract and wait for the value to go up again. You simply lose out on your investment.
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