Bitcoin came on the scene in 2009.
At the time, very few people were able to get around the idea of money only in cyberspace.
After that, the belief in these digital currencies increased, especially with the increase in concern about central banks controlling and manipulating currencies.
The interest in and adherence to digital currencies has increased rapidly, and investors who are looking for ways to diversify their investment portfolios have turned to them.
With the growing popularity of digital currencies, Bitcoin, which has no central authority, has been increasingly used in international money transfers as well as in daily commerce.
Currently there are over 100,000 merchants accepting Bitcoin for transactions.
As it is known that there is a limited and known ceiling on the total supply of Bitcoin, the value of Bitcoin increases with increased demand, making it an attractive medium for investors – but it is also very volatile, which the past few years, even just the past few weeks have shown.
Bitcoin’s volatility can be attributed to a number of factors, including the fact that it is still not well understood yet as a store of value or a means of transfer.
Investors can become very volatile about Bitcoin when it makes headlines about security vulnerabilities, drug use, or environmental damage. In addition, the regulatory status of cryptocurrencies remains unclear in most regions.
In the US, the Securities and Exchange Commission (SEC) has rejected several applications for ETFs.
There are also investment funds traded in the blockchain, where these funds collect and own shares of companies that have invested in blockchain technology.
More precisely, there are currently eight of these ETFs on regulated exchanges and markets.
Investing directly in Bitcoin can be a bit complicated, and requires the ability to store and protect it.
Therefore, many investment institutions resort to investing in bitcoin through these investment funds, first to avoid regulatory problems, and secondly, for the ease of dealing with them and not to bear the trouble of storing and securing them.
Here are the most popular and prominent institutional funds that invest in Bitcoin:
Grayscale boxes :
This fund was established as the Bitcoin Trust, a private trust fund opened by Alternative Currency Asset Management in 2013 and is now sponsored by Grayscale Investments LLC.
This fund started publicly trading in 2015 under the symbol “GBTC” and is now called the “Grayscale Bitcoin Trust”.
Grayscale previously stated that it received approval from the SEC after filing its Form 10 approval application with the SEC.
The fund’s goal is to track the base value of bitcoin, just like the SPDR Shares ETF (GLD) that tracks the base value of gold.
Grayscale has more than $3.5 billion in assets under management (AUM), and an average daily trading volume of 2.65 million shares per day.
The fund’s assets are stored with Xapo, a company that specializes in storing and protecting bitcoin.
Grayscale’s fund has a high expense ratio of 2%, in part to cover the additional cost of preservation.
The fund itself is only open to accredited investors who have earned income over $200,000 ($300,000 jointly) or have a net worth over $1 million.
The minimum investment in this fund is $50,000 according to the source .
As an investment vehicle that is traded on an exchange, GBTC is available to investors to buy and sell in the same way as almost any US security.
GBTC can be traded through a brokerage firm, and is also available under tax privilege accounts such as IRAs or 401(k)s. Investors are entitled to purchase at least one share of GBTC’s public quote.
Grayscale offers several other cryptocurrency mutual funds, including one dedicated to Bitcoin Cash, Ethereum, and Litecoin…
ARK Investment Management:
New York-based ARK Investment Management manages four ETFs with more than $240 million in assets under management.
One of its funds is the ARK Next Generation Internet ETF (ARKW) which invested in the bitcoin revolution by buying stakes in the aforementioned Grayscale Bitcoin Trust.
The ARKW Fund is an ETF managing assets of $358 million, investing primarily in companies based on new technologies including blockchain and cloud storage, with pioneering next-generation technologies, such as shares of Tesla Electric Vehicle Manufacturer (TSLA), which account for nearly 11.02% of the portfolio, Square Inc (SQ) shares of about 8.53% and Twitter of 0.79%…
ARKW Fund owns 2,682,597 shares in “Grayscale,” with a current market value of $25,135,933.89, holding a 1.73% stake in the portfolio.
The expense ratio for this fund is 0.75%.
ARK has another fund, the ARK Innovation ETF (ARKK), which is looking for investments in what it considers future technologies.
These are the most prominent names of crypto and blockchain investment funds approved by regulators.