Cryptocurrencies can involve more volatility than traditional investments and may also involve other risks. Vanguard’s long-standing philosophy can provide perspective on the world of crypto ETF investing and offer a first step for online investing.
Cryptocurrencies have become increasingly popular because they’ve been able to rise in value so quickly. Wall Street is paying attention and so are experienced traders and individuals just beginning their trading journey. With crypto’s volatility, many wonder whether blockchain ETFs is something they should look into.
Vanguard Crypto Index Fund along with Fidelity investment strategies offers access to real assets without an individual investor having to fully dive into the crypto market.
Vanguard Fund and the Bitcoin of ETFs
Many investors are on board with Bitcoin, but there is still some risk involved. It’s too volatile for some people, so it’s not the right choice for everyone. If you’re eager for an investment that offers significant returns but has less risk than Bitcoin, then the Vanguard fund might be the right choice for you.
How to Maximize your Crypto Assets While Limiting Risk
It can be tricky to choose the right investments because you’ll want to strike a balance between risk and reward. Investments with higher returns usually involve greater risk, so it’s important for investors to consider their risk tolerance before they begin investing.
This investment is similar to Bitcoin because it’s an ETF that has seen significant gains over the past year, but it’s also one of the riskier ones.
The Vanguard Information Technology Index Fund (VIT) is an index fund that tracks the performance of the S&P 500 Information Technology Sector Index. Tech companies tend to experience higher levels of volatility than other sectors, but they’re also known for their stocks that have experienced explosive gains (think Amazon and Tesla)
In 2020, the fund has returned an impressive 46%. By comparison, the Vanguard S&P 500 ETF, which tracks the market as a whole, earned an 18% return over the past year.
Can you Buy Bitcoin ETF on Vanguard?
The Vanguard CEO makes clear that the company appreciates the Blockchain technology underlying Bitcoin, but because it’s very hard to predict any long-term return coming from it besides speculation Vanguard will not have a fund on Bitcoin.
Ways to Buy Cryptocurrency ETFs with Vanguard
1. Should you Buy Bitcoin on Vanguard through the Grayscale Trust?
Using Grayscale investments broker-dealer provide access to the over-the-counter marketplace. This opens up thousands of securities, some of which are connected to investable cryptocurrencies. OTC crypto funds invest in cryptocurrencies directly. Using the Grayscale Bitcoin Trust (GBTC) requires a minimum of $50,000 to invest; there is a 2% management fee.
Investing your money into the trust implies that you’re not a direct Bitcoin owner, but rather an indirect one. You won’t be holding your private keys with investors’ access, so you won’t be able to sell Bitcoin through an exchanger or spend it.
2. Vanguard Crypto Equities
Another way to buy Crypto on Vanguard is through trading crypto-linked equities. Even though Vanguard doesn’t focus on global trading, it provides easy access to the major US exchanges through its website and app. You can trade crypto-linked equities by investing in securities listed on the Nasdaq or NYSE. We found one security that was linked to cryptocurrencies using Vanguard’s stock screener.
This is actually a U.S. Treasury security trading on the New York Stock Exchange. Based in the UK, Argo Blockchain specializes primarily in the mining of cryptocurrencies. According to Vanguard‘s profile for Argo Investment Management, the company does not currently pay a dividend. Argo currently has an estimated market cap of less than $ 1 billion, so this is a relatively small company. Nevertheless, many analysts do like Argo (ticker symbol ARBK). There are currently seven buy recommendations on Vanguard‘s profile with no holds and sells. Be aware that ADRs sometimes charge fees, and Vanguard charges these fees to the customer. There are no commissions when trading ADRs or stocks at Vanguard.
3. Crypto Funds
Another strategy to consider is mutual funds. One mutual fund that does this is the Bitcoin Strategy ProFund (BTCFX). For a $5000 minimum investment with Vanguard, it’s available for purchase. At $20 per transaction, there is a $20 transaction fee at BTCFX. It is a relatively young fund, starting in 2021 It has only $32 million in assets, so this is an extremely small mutual fund.
4. Crypto Exchange
Vanguard also offers a trade-in option contracts. Many cryptocurrency stocks and ETFs have vibrant option activity. Mutual funds never have options, so there are no options on BTCFX.
Of course, instead of using Vanguard, you can add to your digital asset portfolios with the aid of EndoTech’s AI Crypto Trading Platform. Learn more about why Algos allow you to diversify your long term investments.