Investment Choices for Cryptocurrency Exposure
Investors can gain exposure to cryptocurrencies without directly owning them by using securities that track or own assets tied to digital currencies. These include:
- Exchange-Traded Products (ETPs) & ETFs: Tradeable on all E*TRADE platforms, these products track cryptocurrency prices without requiring a crypto wallet.
- Coin Trusts: Invest in trusts holding large pools of digital currency, though they may trade at a premium/discount to the underlying asset.
- Futures: Leveraged contracts for short-term speculation or hedging, available on Power E*TRADE.
Benefits of Indirect Crypto Investments
✅ No Wallet Needed: Avoid the complexities of crypto storage.
✅ Regulated Markets: Trade via CFTC-regulated futures or SEC-listed ETFs.
✅ Tax Efficiency: Futures are taxed at 60/40 capital gains rates.
Spot Bitcoin and Ethereum ETPs
Spot ETPs provide direct exposure to Bitcoin and Ethereum without derivatives. They hold the actual cryptocurrencies as underlying assets, unlike futures-based ETFs.
Cryptocurrency Futures
Futures offer nearly 24/6 trading with global liquidity. Key contracts include:
| Symbol | Product | Size |
|---------|------------------|------------|
| /BTC | CME Bitcoin | 5 BTC |
| /MBT | CME Micro Bitcoin| 0.1 BTC |
| /ETH | CME Ether | 50 ETH |
| /MET | CME Micro Ether | 0.1 ETH |
👉 Explore crypto futures trading
Risk Warning: Cryptocurrency futures involve high risk and are unsuitable for all investors. Assess your risk tolerance before trading.
Thematic Stock Investments
Stocks of companies tied to the crypto industry (e.g., mining, blockchain tech) offer additional indirect exposure.
FAQs
Q: Do I need a crypto wallet to invest in crypto ETFs?
A: No, ETFs and ETPs trade like stocks—no wallet required.
Q: Are cryptocurrency futures available in retirement accounts?
A: No, futures are only tradable in margin-enabled brokerage accounts.
Q: What’s the difference between spot and futures-based ETFs?
A: Spot ETFs hold the actual crypto; futures ETFs use derivative contracts.
Q: How are crypto futures taxed?
A: In the U.S., they qualify for 60% long-term/40% short-term capital gains treatment.
👉 Learn more about crypto investing strategies
Key Takeaways
- Diversify crypto exposure via ETFs, trusts, or futures.
- Futures provide leverage but carry higher risk.
- Research underlying assets and fees before investing.
Disclaimer: Cryptocurrency investments are speculative and volatile. Consult a financial advisor.
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