The Next Big Thing: Exploring Post-Bitcoin Investment Opportunities

Investing in Bitcoin can be a complicated process, but it's also an increasingly popular one. As the original cryptocurrency, Bitcoin has spawned a host of imitators and alternatives, but it remains the dominant player in terms of usage and economic value.

There are several ways to invest in Bitcoin, including through cryptocurrency exchanges, traditional stockbrokers, money transfer apps, and Bitcoin ATMs. When investing in Bitcoin, it's important to consider the risks and choose a reputable platform that meets your minimum investment requirements. It's also crucial to weigh your storage options, as crypto is a digital-only asset that requires an encrypted location, such as a hot or cold wallet, to store your passkeys.

Before investing, it's essential to do your research and understand the asset. Cryptocurrencies are notoriously volatile, and investing in Bitcoin may not be suitable for risk-averse investors. It's important to only invest what you can afford to lose and to keep your emotions out of your investing decisions.

Cryptocurrency exchanges

There are two main types of crypto exchanges: centralized and decentralized. Centralized exchanges are managed by a single authority and are more user-friendly, while decentralized exchanges distribute verification powers to anyone willing to join a network and certify transactions. Decentralized exchanges are unregulated and hosted on distributed nodes that are user-owned.

When choosing a crypto exchange, it is important to consider security, fees, and the range of cryptocurrencies offered. It is also crucial to understand how your cryptocurrency will be stored and whether you can take custody of it by transferring it to your digital wallet.

• Kraken: One of the oldest crypto exchanges, founded in 2011. It offers a solid range of coins and competitive trading fees. Kraken provides two trading platforms: the basic Kraken platform and Kraken Pro, which offers advanced features like margin trading and lower fees for high-volume traders.
• Gemini: Well-suited for traders of all skill levels, with an intuitive interface and a wide range of features, including the Gemini Earn program and the Gemini Credit Card. Gemini is available in all 50 US states and has strong regulatory compliance.
• Crypto.com: Provides access to over 250 cryptocurrencies and unique perks for Crypto.com Visa Card users. It offers trading fee discounts for users who hold high balances in its utility token, Cronos (CRO).
• KuCoin: Headquartered in Seychelles, KuCoin provides access to a wide range of altcoins at low fees. It offers advanced features like margin trading and futures trading and accepts credit and debit cards. However, it is not licensed in the US, and funds kept on the platform are not insured.
• EToro: A relative newcomer to the US market, eToro offers a crypto exchange and an online brokerage platform. It provides a communal experience, allowing users to copy the trading strategies of advanced users.
• Coinbase: With over 200 tradable cryptocurrencies, Coinbase is a user-friendly platform that makes buying and selling simple. It stands out for its strong security features and user reviews. However, it charges relatively high fees for convenience and is not available in all US states.
• BYDFi: An ambitious newcomer launched in 2019 and based in Singapore. BYDFi offers low trading fees and a decent selection of popular cryptocurrencies. It is available in all 50 US states and accepts over 50 fiat currencies.

Traditional stockbrokers

How to Get Started with Traditional Stockbrokers

• Choose a reputable platform: When investing in Bitcoin through traditional stockbrokers, it's important to select a well-known and trusted platform. Examples of popular platforms include Robinhood, Webull, TradeStation, and Fidelity. These platforms offer varying features and services, so it's essential to research and choose the one that best suits your needs.
• Understand the risks: Investing in Bitcoin carries substantial risks due to its volatile nature. Before investing, evaluate the potential impact of price swings on your finances and long-term investment strategy.
• Connect your bank account: To purchase Bitcoin through a traditional stockbroker, you will need to link your bank account to the platform. This will enable you to buy and sell Bitcoin seamlessly.
• Place your Bitcoin order: When you're ready to invest, decide on the amount of Bitcoin you want to purchase. Keep in mind that the value of Bitcoin can fluctuate significantly, so carefully consider your risk tolerance and investment strategy.
• Manage your investments: After buying Bitcoin, you can choose to hold it for the long term, use it for online transactions, or engage in day trading. Traditional stockbrokers usually provide the necessary tools and services to facilitate these activities.

Benefits of Using Traditional Stockbrokers for Bitcoin Investments

• Convenience and accessibility: Traditional stockbrokers often provide an intuitive and user-friendly interface, making it easier for investors to navigate the platform and access various investment options.
• Regulatory compliance: Reputable traditional stockbrokers tend to be regulated and licensed, which adds a layer of security and trust for investors.
• Diversification: By using traditional stockbrokers, investors can diversify their investment portfolios by adding Bitcoin or other cryptocurrencies alongside more traditional assets such as stocks, bonds, or real estate.

Considerations when Using Traditional Stockbrokers for Bitcoin Investments

• Limited options: The choices among traditional stockbrokers that offer Bitcoin trading are currently limited. It's important to research and select a platform that suits your needs and has a good reputation.
• Security concerns: As with any digital asset, there are security risks associated with investing in Bitcoin through traditional stockbrokers. Ensure that the platform you choose has robust security measures in place to protect your investments.
• Fees and charges: Traditional stockbrokers may charge fees for Bitcoin trading, such as transaction fees or spreads. It's important to understand the fee structure of the platform before investing.

Peer-to-peer money transfer apps

Peer-to-peer (P2P) money transfer apps are a convenient way to send and receive money. They eliminate the need for physical cash and allow users to make transactions using just their phones.

Some of the most popular P2P money transfer apps include:

• Zelle: Zelle is offered by most major banks in the US and allows users to send money to other Zelle users through their bank account or the Zelle app. Transactions between enrolled Zelle users are typically completed within minutes. However, the recipient will need to enrol in Zelle to receive money. Zelle is only available for domestic transactions and does not support international transfers.
• Venmo: Owned by PayPal, Venmo is one of the most popular P2P services globally. It allows users to send and receive money for free, without the need to top up their Venmo account beforehand. However, there is a 3% fee for sending money via credit card, and a corresponding fee for instant cash-out transfers to a bank account.
• Cash App: Cash App is a robust P2P money transfer app that allows users to send and receive money using a linked bank account, Cash App balance, credit card, or debit card. It also offers additional features such as buying and selling Bitcoin and stocks, taking out small personal loans, and savings through its "cash boost" feature. Sending money via credit card incurs a 3% fee, and there is a 1.5% fee for instant deposits.
• PayPal: One of the first and most well-established P2P services, PayPal allows users to link their bank account, debit card, and credit card to send and receive money. While there is no fee for sending money within the US from linked bank accounts or using a PayPal balance, transactions using debit cards, credit cards, or PayPal Credit incur a fee of 2.9% plus 30 cents. International transactions are possible, but they have an additional 5% fee.
• Google Pay: Google Pay is a digital payment app that allows users to make purchases and money transfers. It can be used to send money to other Google Pay users or to pay retailers for goods and services. Transfers from a Google Pay balance or a debit card are typically quick, but transfers from linked bank accounts can take up to three to five business days. Google Pay also supports international transfers to recipients in India and Singapore through Western Union or Wise accounts.

When choosing a P2P money transfer app, consider factors such as transfer speed, ease of use, currency exchange rates, fees, and whether your friends, family, or clients already use a particular platform. Additionally, always be cautious of potential scams and security threats, as P2P transactions are not completely foolproof.

Bitcoin exchange-traded funds

Bitcoin futures ETFs are exchange-traded funds that aim to offer exposure to the price movements of Bitcoin. The ETFs use futures contracts to achieve this goal. Fund managers purchase these contracts and bundle them into a fund.

The first concept for an ETF that held Bitcoin emerged shortly after investors and brokers noticed that Bitcoin prices were trending upward and gaining popularity among investors. This signalled an opportunity to generate returns by trading Bitcoin.

The first official Bitcoin-linked ETF was the ProShares Bitcoin Strategy ETF (BITO), which mainly uses futures contracts. It was approved by the SEC in October 2021 and is listed on the New York Stock Exchange.

In January 2024, the SEC approved 11 Bitcoin spot ETFs, which hold Bitcoin as opposed to futures. These spot ETFs began trading in January 2024.

Bitcoin futures ETFs are designed to allow more people to invest in Bitcoin without the necessary expenses and hassles of buying them directly. They eliminate the need for security procedures and excessive funds while providing a familiar investment type.

It's important to note that investing in Bitcoin futures ETFs is risky due to the large price swings of cryptocurrencies. However, you can invest much less in them, making it a good choice if you want to speculate on Bitcoin prices.

Crypto stocks

• Advanced Micro Devices (AMD)
• Coinbase Global (COIN)
• Nvidia (NVDA)
• Paypal Holdings (PYPL)
• Block (SQ)
• Visa (V)
• Marathon Digital Holdings (MARA)
• Silvergate Capital (SI)
• Microstrategy (MSTR)

These companies provide various services in the cryptocurrency space, such as cryptocurrency exchanges, digital wallets, and payment services. For example, Coinbase Global (COIN) is a popular cryptocurrency exchange that offers a platform for buying, selling, and storing various cryptocurrencies, including Bitcoin. Paypal Holdings (PYPL) is a payment service that allows users to purchase cryptocurrencies directly through its platform.

When investing in crypto stocks, it is important to consider the risks and potential rewards. The cryptocurrency market is highly volatile, and prices can fluctuate significantly. It is also important to do your own research and understand the companies you are investing in, as well as the regulatory and tax implications of investing in cryptocurrencies.

Frequently asked questions