Dec 20, · For as volatile as the stock market has been in , you wouldn't know it by looking at bitcoin, which is up by % on a year-to-date basis through the late evening of Dec. Even though it’s not possible to buy Bitcoin stock, you can indirectly do so by investing in other ways. The best Bitcoin stock options are well known companies which have backed, even invested in, Bitcoin. Goldman Sachs (NYSE:GS) is one of these companies. Jun 06, · The most convenient way to gain exposure to bitcoins is through the Bitcoin Investment Trust (OTC:GBTC). This fund was created so that buying bitcoins could be as Author: Matthew Cochrane.
Can you buy bitcoin stockHow to Buy Bitcoin | The Motley Fool
After all, it's not like they can purchase a bitcoin at their brokerage or bank. Heck, one can't even buy a bitcoin at Amazon. With this question in mind, let's look at some different ways investors can buy bitcoins or otherwise gain exposure to this unique asset class.
If you're still a little confused about what exactly a bitcoin is, here is an excellent primer on the unregulated virtual currency by fellow Fool Matthew Frankel. The most popular way to buy bitcoins is through bitcoin wallets, digital wallets for the exclusive use of bitcoins. There are many different types of bitcoin-based wallets and you need to be very careful to choose something that will best meet your needs.
Some bitcoin wallets are device-specific, while others are web-based. Coinbase is one of the most popular digital wallets used to purchase bitcoins. As with almost any of these wallets, customers must sign up for an account online and then link a bank account.
If they just want to buy, a valid credit card number will do. Before any bitcoin transaction, Coinbase shows users the current value of the digital currency in U. Since third-party cryptocurrency wallets have been famously known to be hacked resulting in a permanent loss of funds, investors must be careful to properly secure their bitcoin wallets.
Remember, bitcoins are not stored in FDIC-insured accounts and most third parties do not offer insurance in case of theft or fraud. How bad is this problem? Last August, Reuters reported that a full third of bitcoin exchanges had been breached.
Security is vitally important in keeping bitcoin accounts safe. Back-ups are critical in cases of computer crashes or stolen wallets. Wallets must be encrypted so anyone withdrawing bitcoins from your account must know a password. Whatever you do, don't forget your password! Many wallets offer two-factor authentication, where a unique code is texted or emailed to you before withdrawals can be made.
Bitcoin passwords are also critical as, unlike bank accounts, there is no customer service line to reset your password. There are other ways to purchase bitcoins; some more exotic than others. Bitcoin Depot, in conjunction with the bitcoin wallet Airbitz, allows users to buy bitcoins with cash at dozens of special ATM locations spread across six states: Alabama, Florida, Georgia, Massachusetts, Tennessee, and Texas.
After setting up an account, all customers need to do is deposit cash in the ATM and scan a QR code with a special scanner attached to the ATM and, within minutes, the purchased bitcoins will be available in the Airbitz account.
This fund was created so that buying bitcoins could be as easy as buying any stock or ETF share. All people have to do is buy shares through their regular broker using the ticker symbol. Each share represents about one-tenth of a bitcoin.
According to his calculations, a share often costs more than the value of the underlying bitcoin. As with any security, one should do their due diligence before buying bitcoins. According to Fundera, just 2, of these businesses are accepting bitcoin. Bitcoin bulls are also pretty convinced that the most popular digital currency is now a bona fide store of value: i.
When coupled with the central banks' pledge to keep its federal funds rate at or near record lows, it's pretty evident that the U. Crypto investors believe that a ballooning money supply is a green flag for bitcoin to head significantly higher. The issues I have with the store-of-value thesis are twofold. First, bitcoin isn't backed by any other asset or government. Therefore, it has no tie-ins or official relationship to the movements of the U.
Implying that a ballooning money supply should push bitcoin higher is nothing more than a dart throw. Second, store-of-value assets are designed to maintain their value over time and protect investors from volatility. Yet in March, bitcoin nearly lost half of its value in a hour period. In , bitcoin lost about half its value in about six hours. This isn't how a store-of-value asset behaves. Bitcoin optimists will also crow about bitcoin leading the digital payments revolution.
Going cashless could resolve the issues created by certain regions of the world being underbanked. Additionally, the blockchain technology that underlies bitcoin could revolutionize the payment processing and settlement time frame, especially in cross-border transactions. While I don't disagree that a digital payments revolution is underway, or that blockchain could offer global financial and supply chain solutions, bitcoin isn't the vessel that's going to make this vision a reality.
The interesting thing about blockchain is that it can be tethered to multiple types of digital currency, be used in conjunction with fiat currency, or can operate independent of a tethered token. There's absolutely zero evidence that bitcoin is necessary to support a blockchain revolution. To add, buying bitcoin tokens does not give an investor any ownership in the underlying blockchain.
With no ownership in the solution that has the potential to actually drive this digital revolution, bitcoin investors are pinning their hopes on other investors being willing to pay more for a currency that exists only in computer code than they did. So, why is bitcoin rallying? I'd surmise it's a combination of short-term emotions, technical analysis i.
After all, it's nowhere near as easy to bet against bitcoin as it is to bet against a publicly traded stock. History has proved that sentiment can shift at the drop of a pin in the cryptocurrency space.
I'd suggest investors keep their distance from bitcoin. Investing Best Accounts. Stock Market Basics. Stock Market.
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