A Bitcoin ETF Is Still in the Works. Here Are Your Options in the Meantime.

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Owning cryptocurrencies through a fund offers many advantages—though there are a lot of tradeoffs. These are your options, and the pros and cons you need to...

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The call for a Bitcoin exchange-traded fund has become a more urgent chorus this year, as the digital currency continues to surge and becomes increasingly mainstreamamong institutional investors.

Direct ownership. There are funds that allow investors to own the actual asset, much like SPDR Gold Shares and iShares Gold Trust . The largest and most popular crypto option has been the $37 billion Grayscale Bitcoin Trust , a closed-end fund holding Bitcoin in “cold storage,” or offline. The fund charges 2% in exchange for freeing investors from the hassle of creating digital wallets, keys, and storage of the cryptocurrency.

If these ETF conversions do happen, any premium or discount would quickly disappear. That means buying the discounted Grayscale shares now could offer a lower entry point. Still, there is no guarantee that will happen anytime soon, and the interim volatility could be frustrating for investors who want to accurately track Bitcoin’s price.

The blockchain side door: The $1.3 billion Amplify Transformational Data Sharing ETF invests in a variety of companies involved in the blockchain business. That includes Bitcoin miners; transaction and trading platforms; custodians; firms developing private blockchains; and those benefiting from the growth of blockchain, such as chip makers and warehouses for mining machines.

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