Your two-minute guide to investing in crypto

But as it stands, the main way retail investors can invest in crypto assets is by directly buying units via an unregulated cryptocurrency trading platform or exchange. They can do this in just minutes, after just providing some basic identification. Most exchanges provide access not just to large-cap tokens like bitcoin and ether but hundreds of “alt-coins”.

A number of local crypto-specialist exchanges have emerged in recent years, including BTC Markets, SwyftX and Kraken. A number of sharemarket brokers have also announced plans to allow cryptocurrency trading, including Commonwealth Bank’s CommSec, SelfWealth, Stake and Superhero, but none have executed this functionality yet. Australians can also access many offshore exchanges.

Investors who purchase direct units in a crypto asset via an unregulated exchange then face the thorny problem of storage. They ordinarily would hold their assets in a “hot wallet”, which is an internet-based account that is susceptible to cyber-crime, or a “cold wallet”, a physical device not connected to the internet but at risk of being lost, stolen or damaged.Alternatively, a number of micro-investing apps in Australia provide an exposure to cryptocurrencies via a managed investment scheme.

But investors who meet the sophisticated and wholesale investor test can access a number of traditional managed funds invested in a range of cryptocurrencies. There are a growing number of crypto-specialist professional investment houses in Australia. They would ordinarily charge relatively high fees, but have a duty to act in unitholders’ best interests, amid a range of legal obligations.

Investors can also gain inadvertent exposure to the market by investing in stocks that hold cryptocurrencies on their balance sheet or are involved in the mining and distribution of crypto tokens. A number of local ETFs provide exposure to these stocks.

Source: Digital Coin News (digitalcoinnews.net)

With ASIC's allowing to exchange-traded funds for hodls is a game changer!

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