How to get exposure in Crypto from Equities markets.
Crypto currencies have been the rage and another huge momentum play for some time. While certainly not a bad idea to invest directly via Coinbase, etc. there are some downsides which are not discussed in detail.
The first downside is the hassle of transferring funds in and out - particularly out. Coinbase Pro has 25k to 50k limits per day on outgoing funds. And while I they can be larger, it is not the most pleasant experience and figure the withdrawl limits scale based on the amount in your account.
The second downside is the fees! I'm on Coinbase Pro and have spent over $7000 per month on fees alone and while I haven't counted, believe it to be less than 20 trades a month.
Another downside which I find aggravating with Coinbase Pro are the trade options. You are restricted to very rudimentary Stop-loss approach and odd limit behavior which costs hundreds a trade. It is under documented and the app is very poor for numerous reasons. Further, there are no trailing stop options. While I limit the number of times I use trailing options it would be nice to be able to sleep and let profits ride with trailing stops.
Reliability is another option. Coinbase is notorious for freezing at the worst times. I've dodged this for the most part, but as your portfolio gets large this could be crippling if caught out of position and having a trade execute at the worst time due to a clogged system.
Lastly, is optionality. I could have had 10x the leverage trading the below with options with less exposure.
You could get sympathetic exposure on many other plays if not looking to play directly and likely do very well.
Note: This strategy has worked well, but keep in mind that crypto never sleeps so you have to adjust your risk tolerance accordingly for big moves after hours. While I've had positions in several of these for their organic opportunities, I am now contemplating centralizing my holdings with my stock broker as I can imagine I've spent a decent chunk of profits if spending $7k a month on trades.
Here are the equities you can trade to get exposure in Crypto.
SQ - Square: Understand they allow purchasing of bitcoin through thier platform but not transacting. Believe this is primarily done through Cash app.
PYPL - Paypal: Similar to Square. They have sizable holdings of their own to settle purchases of bitcoin which their customers use.
MSTR - Microstrategy : Founder is huge bitcoin advocate and has transferred much of their cash holding into bitcoin. They were the first to embrace this strategy and have
MARA - Marathon Patent Group: Known patent troll, like others their price has increased dramatically with MARA going from $.35 to its current price of $43 a share.
TSLA - Tesla: No need for introduction. Invested $1.5B in Bitcoin and kicked off BTC run to $50k. In a matter of weeks they have driven more profit from their bitcoin investment than in any year of car sales. They also suggesting accepting BTC for payment for their products in the future which would further solidify themselves as a bitcoin play.
RIOT - Riot Blockchain: The original purveyor into crypto mining and investing. Their stock along with MARA seems to have very strong correlation.
GBTC - Grayscale Bitcoin Trust: Perhaps the purest play in the equities market is GBTC. The stock price does not exactly match the underlying bitcoin price, however it is the fastest way investors without a crypto account can get exposure without actually buying their own bitcoin.
ARKW- ARK Next Generation Internet ETF: If looking for the lightest of exposure you could get into an ETF such as ARKW. It has holdings which include several of the above listed stocks as well as GBTC. It obviously or hasn't historically be as responsive to the explosive moves BTC is known for, but it will move nonetheless.