A Beginner's Guide To Crypto Investing With Fidelity

Fidelity Investments is one of the largest ETF and mutual fund providers in America. It was one of the earliest mainstream firms to support cryptocurrencies, going back as far as 2014. In 2020, Fidelity announced its plan to launch its own bitcoin fund called the Wise Origin Bitcoin Index Fund. However, the fund has a minimum investment of $100,000, making it inaccessible to most retail investors. Aside from its proposed bitcoin fund, there are limited options for regular investors to gain exposure to cryptocurrencies through Fidelity.

Fidelity's Wise Origin Bitcoin Index Fund

The Wise Origin Bitcoin Index Fund is Fidelity's first bitcoin fund. It is a passively-managed investment vehicle that offers investors exposure to bitcoin without buying the cryptocurrency directly. The fund is managed by Chief Strategist Peter Jubber and is sold to qualified investors through the Fidelity Digital Funds subsidiary.

The fund has been a success, raising over $100 million from wealthy investors since its launch in August 2020. It has a minimum investment amount of $50,000 and is one of the largest bitcoin-only funds in the industry.

The Wise Origin Bitcoin Index Fund is an exchange-traded product (ETP) that seeks to track the performance of bitcoin. It is not an actively managed fund, instead passively investing in bitcoin. As an ETP, the fund can be purchased through multiple account types, including brokerage, trust, and tax-advantaged accounts.

The fund is designed for investors with a high-risk tolerance and offers competitive pricing, intraday liquidity, and no lockups. It is important to note that the fund invests in a single asset, bitcoin, which is highly volatile and can become illiquid.

Fidelity has been researching bitcoin and blockchain technology since 2014 and has established itself as a leader in digital assets. With over 70 years of securities market experience, Fidelity is committed to innovation and providing total investing solutions for its customers.

Crypto exchange options

Coinbase

Coinbase is one of the most well-known and widely used crypto exchanges. It offers a user-friendly platform that allows anyone with a credit card and an email address to buy and sell cryptocurrencies. Coinbase is also known for its focus on safety and security, with strict know-your-customer requirements.

CoinDesk

CoinDesk is another popular crypto exchange that offers a similar range of services to Coinbase. It provides an easy-to-use platform for buying and selling cryptocurrencies and is constantly working to improve its security measures.

Bittrex US

Bittrex US is a Seattle-based crypto exchange that is separate from Bittrex Global, which operates outside the US. Bittrex US prioritises safety and security, requiring extensive background information from its users to ensure account safety.

Kraken

Kraken is a well-established crypto exchange that has been in operation since 2013. It offers a wide range of cryptocurrencies and tokens for trading. Kraken also provides a high level of security and has never been hacked, making it a trusted platform for many users.

Circle Financial

Circle Financial is a crypto exchange that offers an easy-to-use platform and a focus on security. It provides a range of services, including the ability to buy, sell, and store cryptocurrencies, as well as send and receive funds.

Genesis

Genesis is a crypto exchange that caters to both individual and institutional investors. It offers a wide range of cryptocurrencies and tokens for trading and provides users with advanced trading tools and features.

Binance

Binance is one of the largest and most secure crypto exchanges in the world. It offers a wide range of cryptocurrencies and tokens, including Bitcoin, Ethereum, and its own native token, BNB. Binance provides users with a variety of trading options, such as futures and margin trading, and supports a global user base.

Bybit

Bybit is a crypto exchange that offers a range of derivatives products, including options, futures, and perpetual contracts. While it may not offer a wide range of options contracts, Bybit provides users with a demo trading platform to safely test their trading strategies. Bybit is not available to US investors due to regulatory restrictions.

Crypto.com

Crypto.com offers a simplified options contract called UpDown, which is available exclusively to US investors and is regulated by the CFTC. The Crypto.com app makes it easy for users to buy and sell assets, with very low fees of just $1 for the exchange and $0.99 for the technology fee.

OKX

OKX is a crypto exchange that offers a range of derivatives products, including options, perpetual swaps, and futures. The platform is more suited to experienced investors, but it also provides a demo trading platform for users to learn and test their strategies. OKX uses a tiered fee structure based on trading volume and holdings.

Deribit

Deribit is a dedicated crypto derivatives exchange that offers options, spot, and futures trading. While the platform may be intimidating for newcomers, Deribit provides a wealth of learning resources and tools to help users monitor their positions and performance. Deribit is not available in the US and only accepts crypto deposits.

Delta Exchange

Delta Exchange is a premier options trading platform that offers a wide range of options, including call and put options, on various cryptocurrencies such as Bitcoin and Ethereum. Delta Exchange provides users with daily expiries, low settlement fees, quick withdrawals, high liquidity, and tight spreads. It also supports multiple cryptocurrencies, giving users diverse trading opportunities.

Traditional stockbrokers

It is important to note that investing in Bitcoin can be risky, and it is important to carefully consider your goals and strategies before investing. One common rule of thumb is to invest no more than 10% of your portfolio in individual stocks or risky assets like Bitcoin.

Bitcoin ATMs

To use a Bitcoin ATM, you will first need a Bitcoin wallet, which can be created by installing an app on your mobile device or computer. Once you have a wallet, you can locate a Bitcoin ATM near you using online maps. At the ATM, you will enter the amount you wish to purchase, verify your identity if required, and provide your Bitcoin wallet address by scanning the QR code. You can then pay using cash, credit card, or other payment methods. The purchased Bitcoin will be sent to your wallet, and you will receive a transaction ID to monitor the status.

Selling Bitcoin at an ATM follows a similar process. You enter the amount you wish to sell, verify your identity if necessary, and send the Bitcoin to the provided address by scanning the QR code. Once the ATM receives the Bitcoin, it will dispense the corresponding amount of cash.

There are several companies that provide Bitcoin ATM services, including Coinhub, Lowest Fee Bitcoin ATMs, Byte Federal, Coinme, CoinFlip, Cash2Bitcoin, Bitstop, Just Digital Coin, HODL Digital Services, BudgetCoinz, and Bitcoin Depot. These providers offer varying features such as high daily cash limits, instant registration, user-friendly interfaces, and competitive fees.

Peer-to-peer money transfer apps

Investing in cryptocurrency with Fidelity involves buying cryptocurrencies like Bitcoin and Ethereum through an exchange. While the Boston-based investment giant has held cryptocurrency for professional investors since 2018, it is limited to investors with high minimums ($250,000 per investor). However, Fidelity plans to launch a Bitcoin ETF, making it more accessible to average customers.

Now, onto peer-to-peer money transfer apps:

Peer-to-peer (P2P) payment apps have revolutionized the way people send and receive money, offering convenience, speed, and ease of use. Here are some of the most popular P2P payment apps and their features:

Zelle

Zelle is a service offered by major US banks, allowing users to send money to other Zelle users through their bank account or the Zelle app. It offers quick transfers, usually within minutes, and is compatible with many banks and credit unions. However, it requires a smartphone and only works with domestic banks.

Venmo

Venmo is owned by PayPal but offers distinct features. It allows users to send money via a linked bank account, Venmo balance, or credit card. Venmo also offers a free, optional debit card that can be used for purchases, and it provides cash back at select retailers. While sending money with a bank account or Venmo balance is free, there is a 3% fee for credit card transfers and instant cash-out transfers.

Cash App

The Cash App by Square is a versatile P2P payment app. It enables users to send money via a linked bank account, Cash App balance, credit card, or debit card. It also offers a free, optional debit card and provides "offers," which are savings applied to various vendors. The app charges a 3% fee for credit card transfers and a 0.5%-1.75% fee for instant deposits.

PayPal

PayPal is one of the most well-established P2P payment services, widely accepted by merchants. It allows users to link bank accounts, debit cards, and credit cards to send money with no fee for domestic transfers from linked bank accounts or PayPal balances. However, there is a 2.9% transaction fee for debit and credit card transfers, and international transactions incur an additional 5% fee.

Google Pay

Google Pay is a digital payment app that enables users to make purchases and money transfers. It supports transfers to recipients in India and Singapore through Western Union or Wise accounts. While transfers from Google Pay balances or debit cards are typically quick, bank account transfers can take up to five business days. There is a 1.5% fee for withdrawals to eligible debit cards, and Google Pay does not support credit card transfers.

In conclusion, while Fidelity currently caters to professional investors in the cryptocurrency space, its planned Bitcoin ETF may open up new opportunities for average investors. As for P2P money transfer apps, they offer a convenient and secure way to send and receive money, with a range of features and fees varying across different platforms.

Frequently asked questions