When you hear Bitcoin shares, you first think of a security in which you can directly participate in the Bitcoin network as a shareholder. However, this is not the case, because Bitcoin is not a public limited company, but a self-organizing and controlling network. But how can you profit from the ongoing hype about the crypto currency as an investor without buying it directly and being exposed to the daily exchange rate fluctuations of the volatile currency? There are several options here which, depending on individual risk tolerance and available capital, can also be attractive for small private investors. We present the most interesting and rewarding investment options below.
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What bitcoin trading options are there for investors?
Bitcoin financial products such as CFDs, certificates and, of course, the direct purchase of the currency via a crypto exchange as speculative business with the aim of making a profit on sales through interim price increases are directly linked to price developments. Investors are therefore asking themselves whether it is worth using these options or indirectly benefiting from the Bitcoin boom.
Optionally, it may make more sense to buy company shares instead who benefit from the success of the digital currency through their own developments and vice versa. But there are also alternatives to the currently overvalued public limited companies, some of whose shares are available at a high price.
In addition to the Bitcoin Futures that have been traded since September 2017, investors can also invest in ETFs. How the choice is made depends in particular on the willingness to take risks of the investor and the investable capital. Basically, for all investments, regardless of whether stock exchange transactions, participations, etc., a total loss must be easily bearable financially. The use of the entire savings must therefore be avoided. The investment capital should not only flow into one product, but should also have a meaningful risk diversification in order to be able to better absorb any losses.
Please also note that you do not post investment income as a net amount can. They are subject to income tax and must be included in the personal tax return if the flat tax has not been paid to the tax office automatically beforehand. So profit is not just profit. You must deduct all transaction costs, fees and the aforementioned tax.
What is a Bitcoin share?
In German-speaking countries, Bitcoin share primarily means the share of the Bitcoin Group. The listed company, based in Herford, Germany, founded in 2008, operates the trading platform bitcoin.de. The company is also dedicated to the development of other innovative business models for Bitcoin and other cryptocurrencies as well as blockchain. At the time of the Bitcoin all-time high in December 2017, the Bitcoin Group's share was trading at over EUR 80. The course has currently halved again (as of April 20, 2019). With a market capitalization of over EUR 207 million, the company still seems overvalued in view of sales and an annual low of less than EUR 6. The share is therefore considered highly speculative.
The same applies to the share of the German Naga Group AG. Strong price jumps and crashes can also be observed here. However, the FinTech company with Chinese investors has not yet really implemented what it announced. The introduction of Bitcoin wallets was apparently planned. So far, the Naga Group has developed and marketed other applications in the financial technology sector in addition to a social trading app. Et al the group has invested in easyfolio and wants to use blockchain technology there. The paper is still very volatile and just as speculative. The price is currently less than EUR 6 (as of April 20, 2018).
Technology companies benefit more extensively from the crypto boom
It therefore seems to make more sense, currently not or not exclusively to invest in companies with direct user benefits, but to take a closer look at the technology behind it and thus the development companies. Mining in particular requires high computer capacities. Very good graphics cards are also required for the calculation of crypto keys. In addition, the focus is not only on Bitcoin, but also on cryptocurrencies in general, but also on other areas of application of the technology.
The graphics card manufacturer Nvidia, for example, is one of the leading suppliers to powerful processors and is one of the top 10 providers for "Artificial Intelligence" ( Artificial Intelligence ), also called machine learning. Although this stock is also very highly valued, the company is not solely dependent on the crypto or game market with a high demand for high-performance graphics cards. It can increase its price potential by providing high computing capacities through other new technology fields such as blockchain applications and the so-called "Internet of Things" as well as in medical technology. However, investors should in principle plan a longer holding period with companies for such technology developments. In general, experts advise a holding period of initially 3-5 years.
Microsoft is also one of the global players who benefit from the crypto market. Among other things, the company built a blockchain environment for companies and thus relies not only on applications, but on the technology behind the application.
Bitcoin shares - what options are there?
- Public companies that benefit directly from the Bitcoin or the price (e.g. crypto exchanges, wallet providers)
- Shares of technology companies, which produce technology for crypto currencies, blockchain etc. & optimally cover other business areas for other technology use
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Bitcoin Future - How do you trade that?
Future contracts are indirect financial products and thus derivatives. With the Bitcoin Future, investors bet on rising or falling prices of Bitcoin. Trading is therefore directly dependent on the price development of the cryptocurrency.
Futures contracts exist on many underlyings, e.g. on raw materials and now also on Bitcoin. In a future contract, a fixed price is set for a future point in time when the purchase is due. This means that both buyers and sellers can protect themselves against price fluctuations with the specified price. However, if only one of the two parties is willing to fulfill the contract on the due date, the business fails, e.g. when very strong price fluctuations - as is possible with Bitcoin - are to the detriment of one party. The forward transaction is then " burst ".
Trading on Margin in Bitcoin Futures on the US stock exchanges CBOE or CME requires one Security deposit of 30 or 35% to be deposited beforehand. The futures contracts can be bought and sold at any time during trading hours. Traders can now find the futures at some large online brokers with access to the US market.
The new derivatives were introduced in December 2017 and were very well received by Bitcoin investors. Bitcoin futures are considered the first step for Bitcoin in the traditional financial market. In particular, institutional investors have opened up a market in which, for regulatory reasons, they have not been allowed to participate in the current Bitcoin boom.
Is there a Bitcoin ETF or a Bitcoin certificate?
Bitcoin ETF - Currently still on hold
On ETF (Exchange Traded Fund) copies an index into an investment fund and replicates it 1: 1 in the portfolio. In contrast to managed funds, an ETF does not constantly rearrange the portfolio by the fund manager in order to optimize the composition. It remains in the composition of the index. The saves high costs for fund management, which accrue for managed funds and are passed on to the investor on his settlement or account statement.
ETFs are listed and can be bought or sold on the market at any time become. The front-end load, which is otherwise customary for managed funds, is also eliminated and the annual management fees are significantly lower than for active investment funds. Order costs from brokers and direct banks are also often very cheap. In addition, many ETFs are partially eligible for savings plans and are also suitable for small investors.
With the Bitcoin futures described above, they will also become the basis for the future Bitcoin ETFs traded on the stock exchange, whose prices are based on the futures. Before ETFs are available to investors, however, the new financial products must be approved by the responsible supervisory authorities, which will undoubtedly take a few more months in 2018. So far, there is no green light from the responsible supervisory bodies for a Bitcoin ETF, so these products are currently not yet tradable.
How to trade a Bitcoin certificate?
certificates are in turn bearer bonds traded on the exchange or over the counter. The investor lends money to the issuer of the certificate at the purchase price. Certificates are always linked to an underlying, i.e. on stocks, indices, currencies, raw materials or compilations of individual underlyings developed by the issuer itself. The value of the certificate therefore relates to the price performance of the underlying.
Bitcoin certificates, like the Bitcoin futures, are also derivatives and are now available on the private investor market. Here, too, it is not a direct investment in the crypto currency, but a derivative of Bitcoin, e.g. from Vontobel the Bitcoin Participation Certificate, which simulates the course performance of the Bitcoin. Even with an unlimited term and thus without a specified repayment date, investors can invest in the Vontobel open-end participation certificate. Investors participate almost 1: 1 in exchange rate gains and losses against the US dollar.
To trade certificates, investors need a securities account from an online broker or a bank. In our independent tests & ratings you will find a large number of regulated providers with a wide range and good price / performance ratio.
Whoever decides on Bitcoin trading in the form of Bitcoin derivatives should definitely have the necessary product knowledge of futures or certificates and trading on margin or leverage products. Derivatives are not suitable for beginners, even if the necessary security deposit initially looks like a comparatively small amount m in relation to the actually moved transaction volume through the use of the lever. Derivatives are highly speculative transactions. Good trading and product knowledge is therefore absolutely necessary.
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Conclusion on Bitcoin shares
It is now difficult for investors to benefit from the gold digger mood of bitcoins. The direct purchase of the digital currency is prorated by many private investors and the forecasts are too uncertain after the price drops in recent months.
That the price of the crypto currency can rise or fall by EUR 1,000 within a week - has already become the norm. So a high risk, especially for less daring speculators who actually only wanted to get a taste of the world of cryptocurrencies and who, due to a lack of trading experience, missed the optimal entry and exit times.
Es However, there are some alternatives that - depending on the type of financial product - are not directly dependent on price developments, such as direct purchase or trading in the derivatives Bitcoin Future or Bitcoin Certificate.
Optionally, shares are available instead, depending of the Bitcoin finances that investors are willing to invest in. While not only the Bitcoin Group's Bitcoin Group appears to be overvalued and the strong price fluctuations in the Bitcoin chart are practically parallel in their own price performance, some technology companies sound quite promising and long-term
From the manufacturer of high-performance graphics cards and chips such as Nvidia, AMD or Intel to the probably oldest company for high-quality technology and applications - Microsoft - are some market leaders heavily involved in their area. In particular, the medium to long-term course success has a positive effect, although other areas - such as at Nvidia the use of graphics cards in medical technology - are covered. There are further growth opportunities without being dependent on the future success or non-success of the cryptocurrencies.
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In We test our independent evaluations & comparisons for you online brokers, securities accounts and crypto exchanges. Our range of services is carefully analyzed so that you can make your first selection based on our informative reviews in advance. Of course, we also take conditions and technical trading requirements in detail and inform you about possible criticisms and security aspects. Of course, the focus is also on the seriousness of the provider and reliable regulation by an official financial market authority.
In order to get a complete picture of the respective provider, we naturally also mention any negative aspects. If, for various reasons, we cannot recommend a provider at all, we also point this out clearly.
Interested traders will find a variety of reputable and well-known brokers and securities accounts with extensive service and services. Decide in peace for a provider that is personally suitable for you and open your depot directly on our website. After opening the deposit and depositing your capital, you can build up your personal investment portfolio after activation. Regardless of whether you want to invest in Bitcoin-related companies, technology providers or in derivatives such as Bitcoin Future or Bitcoin Certificate - you will find numerous asset classes with which you can sensibly spread risk and optimize your opportunity / risk ratio.
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