Cryptocurrency ETPs: The Safest Way to Add an Emotional Asset to Your Portfolio

The SEC's approval of spot Bitcoin Exchange-Traded Funds (ETFs) on January 10, 2024, marks a groundbreaking moment for the cryptocurrency market and the industry at a broader level.

You can read below our analysis written in 2023 of how to invest in the digital assets ETFs and crypto ETPs.

Introduction

Cryptocurrencies have been making the front page since 2018 and we are about to celebrate the 15th anniversary of Bitcoin protocol release this year. The endless debate around their legitimacy has not prevented them from being attractive to certain investors – especially among the younger generations, who see them as a quick way to become wealthy. In a world where social networks have garnered the power to disseminate information in real time, today’s financial markets must integrate a growing emotional element. Indeed, all it takes is a news item or even a rumour to make a financial asset or an institution crash or burst. Cryptocurrencies are no exception to the rule and are ultimately victims of their decentralized operation where over- or misinformation too often governs their reputation and their price. This is further exacerbated by their 24/7 quotation and the lack of regulation. We can, then, legitimately raise the following questions: why are some investors attracted to such a risky and unpredictable asset? Can we talk about a standalone asset class which has a role to play in portfolio construction and alpha generation? How can investors get exposure to cryptocurrencies in the simplest and safest way? Based on robust and reliable data sources, the objective of this analysis is to tackle digital assets as a speculative investment and to put forward facts and stats to answer each of the above questions.

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