Digital Currency: Investing in a New Asset Class ─ The world of digital currency is moving at a quick pace and so are the ways to invest in this nascent asset class. Essentials of Digital Currency ETFs: A GuideDigital Currency ETFs or Exchange-Traded Funds are a recent phenomenon that lets investors get exposure to digital currency assets like Bitcoin and Ethereum without purchasing or storing them directly. Now, Vanguard — one of the largest investment management companies in the world — is coming into this space, giving investors another asset class which they may want to consider for diversification.
But what is a digital currency ETF, anyway, and how does it work? An ETF is an investment fund that owns assets, such as stocks, bonds or, in this case, digital currencies. Investors purchase shares of an ETF, making them fractional owners of the underlying assets. This will help investors to gain exposure to digital currencies without the headaches of purchasing, holding, and securing the asset themselves.
Vanguard’s entrance into the digital currency ETF market is noteworthy due to the firm’s pedigree in low-cost, index-based investing. The Vanguard digital currency ETF will seek to track the performance of a basket of digital currencies, allowing investors to get diversified exposure to the sector.
But that does not come without risks to investing in digital currency ETFs. The prices in the digital currency market are volatile and can change drastically in a small time frame. Moreover, the regulatory landscape for digital currencies remains unclear, and any changes in regulations can have a direct effect on the value of the investments.
While there are risks involved in investing in digital currency ETFs like Vanguard’s, it offers investors an easy way to gain exposure to this rapidly growing market. ETFs are also likely to be a more used investment vehicle in the digital currency space as the market evolves.
Top 5 Cryptocurrency Exchanges To Buy, Sell And Trade Digital Currencies
With the growing world of digital currencies, selecting the right exchange is critical for investors and traders. Thousands of platforms exist, leaving newcomers confused about where to buy, sell, or trade their favorite digital assets. This guide will look at some of the best digital currency exchanges you need to consider.