Ways to invest in cryptocurrency at SwissFin

For investors interested in cryptocurrency, SwissFin has several choices for gaining exposure to cryptocurrency markets, though spot trading of cryptocurrency is not currently available.

Cryptocurrency-related ETFs and Mutual Funds

Exchange-traded funds (ETFs) and mutual funds are available that provide exposure to spot cryptocurrency, cryptocurrency futures contracts, and companies focused on servicing the cryptocurrency market.

  • SwissFin Crypto Thematic ETF Our Swissfin Crypto Thematic ETF is designed to deliver global exposure to companies that may benefit from the development or utilization of cryptocurrencies (including Bitcoin) and other digital assets, and the business activities connected to blockchain and other distributed ledger technology.
  • Additional ETFs & Mutual Funds Clients looking for spot Bitcoin ETFs can find these and other third-party ETF and mutual fund products available at SwissFin. These funds invest in cryptocurrencies, cryptocurrency futures contracts, or equities related to cryptocurrencies. You can find them in the Morningstar category “Digital Assets” using SwissFin Fund Finder tool.

Note: Products shown are for informational purposes only and should not be considered an individualized recommendation. Fund Finder links require client login.

Cryptocurrency Coin Trusts

These products allow investors to trade shares in trusts holding large pools of a cryptocurrency, although these can trade at a premium/discount to net asset value (NAV), involve high volatility, hefty fees, and other risks. They trade over-the-counter (OTC) and behave like closed-end funds. Here are just a few examples:

  • Grayscale Ethereum TrustETHE
  • Grayscale Litecoin TrustLTCN
  • Bitwise 10 Crypto Index FundBITW
  • Grayscale Bitcoin Cash TrustBCHG
  • Grayscale Digital Large Cap FundGDLC
  • Grayscale Ethereum Classic TrustETCG

Note: Products shown are for informational purposes only and should not be considered an individualized recommendation. Symbol links require client login.

Cryptocurrency Futures

Clients with a futures account can trade cryptocurrency futures contracts directly. Traded contracts are settled in cash, not cryptocurrency.

Cryptocurrency Stocks

Some stocks provide indirect exposure to cryptocurrency due to the company’s relationship to digital assets. Here are just a few examples:

Note: Products shown are for informational purposes only and should not be considered an individualized recommendation. Symbol links require client login.

What is cryptocurrency?

Cryptocurrency is a virtual currency secured through one-way cryptography. It appears on a distributed ledger called a blockchain that’s transparent and shared among all users in a permanent and verifiable way that’s nearly impossible to fake or hack into. The original intent of cryptocurrency was to allow online payments to be made directly from one party to another without the need for a central third-party intermediary like a bank. However, with the introduction of smart contracts, non-fungible tokens, stablecoins, and other innovations, additional uses and capabilities for cryptocurrency are rapidly evolving. Cryptocurrencies are not FDIC insured and are not protected by SIPC or CFTC regulations.

Popular Types of Cryptocurrencies

Bitcoin

Bitcoin, the most well-known cryptocurrency, allows for direct peer-to-peer exchange of value on a decentralized payment network.

Ether (ETH)

Ether is a cryptocurrency that is native to the Ethereum blockchain and network. The Ethereum blockchain allows users to create programmable “smart contracts” which execute only after certain conditions are met between two or more parties.

How does cryptocurrency get its value?

Cryptocurrency’s value stems from a combination of scarcity and the perception that it is a store of value, an anonymous means of payment, or a hedge against inflation. Cryptocurrency investors can buy or sell them directly in a spot market, or they can invest indirectly in a futures market or by using investment products that provide cryptocurrency exposure.

SwissFin’s perspective

We suggest that clients who are interested in cryptocurrency approach them as speculative investments and consider their goals as well as the risks involved. For those who already have a diversified portfolio and a long-term investment plan, we see cryptocurrency as being used primarily for trading purposes outside the traditional portfolio. Read more about our perspective on spot Bitcoin ETFs here.

Here are some aspects to consider about cryptocurrency investing in general, as well as differences between investing directly in the spot market vs. indirectly.

Cryptocurrency Investing table

  • Benefits
  • Risks
  • Cryptocurrency Investing
  • Potential for appreciation
    Some investors are attracted to the volatile price swings as a potential for profit. Portfolio diversification
    Some investors believe that if the lack of correlation with other asset classes continues, cryptocurrency could add diversification to a portfolio.  
  • Potential for financial loss
    Cryptocurrency prices historically have been highly volatile, and fluctuations could result in significant financial losses regardless of whether you have direct or indirect exposure. 
  • Direct Investing (spot market) Considerations
  • Transaction transparency
    The use of blockchain records transactions between parties in a verifiable and permanent way visible to all. 24/7 access
    Unlike traditional exchange-traded products, cryptocurrency can be bought or sold at any time. Control
    With self-custody and blockchain interoperability, cryptocurrency provides substantial user autonomy outside of traditional financial networks.
  • Potential for fraud According to the Federal Trade Commission, “Many people have reported being lured to websites that look like opportunities for investing in or mining cryptocurrencies, but are bogus.” Lack of recoverability Cryptocurrency assets are accessed using a key that’s not retrievable if lost. Similarly, if you lose access to the place where you store your key, you will effectively lose possession of your cryptocurrency. 
  • Indirect Investing Considerations
  • RegulationThe investment products offered at Schwab provide an element of regulation and consumer protections that spot trading lacks. Recoverability Access to conventional investment accounts can usually be recovered if your credentials are misplaced. 
  • High expenses for trusts and funds Cryptocurrency trusts and mutual funds can involve high expenses, with fees exceeding 2% or more of the investment. Leverage risk for futuresCryptocurrency futures are leveraged products, meaning you could lose more than you initially invested, quickly and with relatively small price movements in the underlying futures product.1

1. Virtual currencies including bitcoin experience significant price volatility, and fluctuations in the underlying virtual currency’s value between the time you place a trade for a virtual currency futures contract and the time you attempt to liquidate it will affect the value of your futures contract and the potential profit and losses related to it.

  • Ready to get started?Open an AccountAlready a client? Log in to get started. 
  • Interested in Bitcoin futures? Learn more about futures trading at SwissFin.