Smart Places To Invest Your Bitcoin Cash

Bitcoin Cash (BCH) is a faster, cheaper alternative to Bitcoin, with a focus on peer-to-peer cash transactions. It was created through a hard fork of Bitcoin, meaning that its blockchain was split off from the Bitcoin blockchain due to a disagreement in the cryptocurrency's community.

There are several ways to invest in Bitcoin Cash. Most places that sell cryptocurrency have Bitcoin Cash, so it's one of the easiest cryptocurrencies to buy. You can find it on cryptocurrency exchanges such as Binance, Coinbase, and Gemini, stock brokerages such as Robinhood, and even payment apps such as PayPal.

Before investing in Bitcoin Cash or any cryptocurrency, it is important to do your own research and understand the risks involved. Cryptocurrencies are highly volatile and unregulated, and there are limited consumer protections in place.

Cryptocurrency exchanges

Examples of Cryptocurrency Exchanges

• Binance
• Coinbase
• Kraken
• Gemini
• Crypto.com
• EToro
• Robinhood

Pros of Cryptocurrency Exchanges

• They offer a wide range of cryptocurrencies.
• They are versatile and user-friendly.
• They have low fees.
• They have high security.
• They provide a simple app experience.
• They offer advanced trading platforms.
• They allow for the purchase of stocks and other investments.
• They provide educational resources.

Cons of Cryptocurrency Exchanges

• They are not all decentralised, and some require users to submit identifying documentation.
• They are not all anonymous, which may be important for certain demographics, such as refugees or those living in countries with little to no infrastructure for government credit or banking.
• They are not all insured against theft.
• They do not all provide proof-of-reserves.
• They do not all offer protection against unauthorised account access.
• They can be hacked.
• They can collapse.

Traditional stockbrokers

The choices among traditional brokers that allow customers to buy and sell Bitcoin are few. Robinhood was the first mainstream investment broker to offer Bitcoin trading (Robinhood Crypto is available in most but not all U.S. states). Like its stock-trading platform, Robinhood charges no fees for Bitcoin trades. Other online brokers that offer access to Bitcoin or other cryptocurrencies include Webull, TradeStation, Fidelity, eToro, and Interactive Brokers.

When choosing a traditional stockbroker, it is important to consider factors such as user-friendliness, trading tools, security measures, and the variety of cryptocurrencies offered. While some brokers may charge no fees for crypto trades, it is worth noting that there might be other costs involved, such as a built-in spread markup or conversion fees.

Additionally, it is essential to assess the broker's regulatory compliance and security measures to ensure the safety of your investments. Two-factor authentication, cold storage, and integrated safe wallets are some of the standard practices to look for.

Before investing in Bitcoin through a traditional stockbroker, it is advisable to evaluate the risks and ensure that it aligns with your investment goals and tolerance for volatility. Diversifying your portfolio and not investing more than you can afford to lose are also important considerations when investing in cryptocurrencies.

Bitcoin ATMs

To use a Bitcoin ATM, customers insert cash or a debit card to exchange their traditional currency for Bitcoin. Some ATMs also allow the use of credit cards or payment apps. While most Bitcoin ATMs are accessible to everyone, some may require the customer to have an existing account with the operator.

• Get a Bitcoin wallet: Before purchasing Bitcoin, you need a place to store it. A Bitcoin wallet is a digital tool that allows users to store, send, and receive Bitcoin securely. You can create a Bitcoin wallet by installing an app on your mobile device or computer.
• Find a Bitcoin ATM near you: Use online maps or the Bitcoin website to locate a Bitcoin ATM in your area.
• Buy Bitcoin from the ATM:

• Enter the amount you want to purchase. Depending on local regulations and the amount, you may need to verify your identity.
• Provide your Bitcoin wallet address by using the ATM's camera to scan the QR code of your Bitcoin wallet address displayed on your Bitcoin wallet app.
• Pay using cash, debit card, credit card, or payment app.
• Receive the Bitcoin in your wallet. This process usually takes a few minutes, and the ATM will provide a transaction ID to monitor the status of the purchase.

You can also use bidirectional Bitcoin ATMs to sell Bitcoin. Here are the steps to sell Bitcoin at a bidirectional ATM:

• Enter the amount of Bitcoin you want to sell. Depending on local regulations and the amount, you may need to verify your identity.
• Send Bitcoin to the provided address by scanning the QR code of the provided address and sending the Bitcoin using your Bitcoin wallet app.
• Collect your cash from the ATM. This process generally takes a few minutes, and you can monitor the transaction status using your Bitcoin wallet app.

It is important to note that Bitcoin ATMs usually charge higher transaction fees compared to online cryptocurrency exchanges. Additionally, they can be frequent targets for scams and fraud, so it is essential to be cautious and only send money to trusted individuals.

Bitcoin exchange-traded funds

ETFs are investment funds that hold assets and issue securities as shares of the fund, which are traded on an exchange. They provide investors with diversified exposure to various asset classes.

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

How They Work

Bitcoin futures ETFs are pools of Bitcoin-related assets offered on traditional exchanges by brokerages. Fund managers purchase futures contracts and bundle them into a fund, which is then actively managed while the shares are traded.

Benefits

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

Risks and Limitations

• Tracking error: The performance of the ETF may not always match the actual price movement of the underlying Bitcoin futures due to management fees, transaction costs, or logistical issues.
• Regulatory uncertainty: The regulatory landscape for cryptocurrencies is still evolving, and changes in regulations can impact the legality, trading, and valuation of Bitcoin futures.
• Market and ETF liquidity: Limited liquidity in the futures market can result in wider bid-ask spreads, making it more expensive for investors to buy or sell ETF shares.
• Rolling of futures contracts: The process of rolling, or selling expiring contracts and buying new ones, incurs transaction costs, which may slightly erode the fund's returns.
• Cybersecurity risks: Hacks, fraud, and security breaches in cryptocurrency exchanges can impact the value of Bitcoin and the security of futures contracts.

Examples of Bitcoin Futures ETFs

• ProShares Bitcoin Strategy ETF (BITO)
• Valkyrie Bitcoin and Ether Strategy ETF (BTF)
• VanEck Bitcoin Strategy ETF (XBTF)
• Global X Blockchain & Bitcoin Strategy ETF (BITS)

Peer-to-peer money transfer apps

Bitcoin Cash is a peer-to-peer electronic cash system that allows users to send money anywhere in the world, almost for free. It is a robust blockchain technology that runs without congestion and offers low fees and reliable confirmations.

Zelle

Zelle is a service offered by most major banks in the US that allows users to send money to other Zelle users through their bank account or the Zelle app. It is a great option for users who want to send and receive money instantly and is compatible with many banks and credit unions. However, Zelle does not support international transfers or credit card payments.

Venmo

Venmo is a popular peer-to-peer payment app owned by PayPal. It offers instant transfers and has no fees when sending from a bank account, debit card, or Venmo wallet. It also has a free, optional debit card that users can spend from their Venmo balance. However, there is a 3% fee for sending money via credit card and a 1.75% fee for instant cash-out transfers to a bank account.

Cash App

Cash App is a money transfer app created by Block Inc. that allows users to send money via their Cash App balance, linked bank account, credit card, or debit card. It also offers an optional debit card and the ability to invest in stocks and buy/sell Bitcoin. However, there is a 3% fee for sending money via credit card and a fee for instant deposits.

PayPal

PayPal is a widely used payment service that offers peer-to-peer money transfers, online purchases, and e-commerce. It has high transfer limits of up to $60,000 and multiple payment methods. However, there is a 2.9% transaction fee for using a credit or debit card, and international transfers are not as ideal due to additional fees and unfavourable exchange rates.

Meta Pay

Meta Pay, previously known as Facebook Pay, allows users to send and receive money through Facebook Messenger and, in some cases, WhatsApp. It is a convenient option for those who frequently use these messaging platforms, with free and instant transfers. However, it has relatively low transaction limits and does not support international transfers for US residents.

Apple Cash

Apple Cash is built into iPhones as part of Apple Wallet, allowing users to send and receive money domestically through iMessage. It offers instant, free transfers and high transfer limits. However, it does not support international transfers or credit card payments, and is limited to Apple devices.

Frequently asked questions