Tuesday Talks: Crypto Investment Products

Last edited: Jan 12, 2022

2021 was a massive year for crypto, as many more people got involved in crypto due to social media, centralized exchanges, DeFi, NFT, the metaverse, and traditional media coverage. Large corporations also added crypto to their company treasury, such as Tesla, Block (previously known as Square), Galaxy Digital, and Microstrategy. Furthermore, El Salvador made Bitcoin a legal tender in the country, marking the first time Bitcoin was officially adopted as a legal tender countrywide.

These are all steps required for crypto to be pushed for mass adoption; however, many analysts and investors alike believe that crypto investment products would be the key to the next stage to mass adoption of cryptocurrencies.

This is mostly due to the fact that there is a certain barrier to entry to trading crypto. It requires quite a lot of effort for a traditional investor previously unaware of crypto to learn about the subtleties of differences between each coin, to set up an account in an exchange, to set up hot and cold wallets, and to buy and sell coins when the swings can easily reach 10% in just an hour.

On the other hand, traditional investors also recognize the fact that while crypto is wildly volatile, even compared to stocks, it also has been one of the most profitable asset classes in recent memory, and especially in 2021. Thus, any investor who could tolerate the risks that come with investing in crypto would like to have the exposure to an asset class that could potentially jump 300% or more again in just this year, not to mention the uncapped ceiling of growth in the more distant future.

Difference in Returns of Various Investment Vehicles. Image via Stoic

The easiest way for traditional investors to access trading crypto would be an ETF, which had already been approved by the SEC to be publicly traded, but has yet to make much noise in terms of daily trading volume. ETFs are simple since you do not have to own the asset yourself, it is more diversified than buying 1 or 2 different coins, and are sometimes actively managed by a certified fund manager to maximize returns.

However, this is also why investors should consider contracts offered on BTCC.com as well. With crypto ETFs, it would be quite difficult to make large returns with little money. However, with leveraged contracts, investors could use the volatility of crypto and leverage to their advantage, in the sense that you could use a small sum of money to win massive returns in a short amount of time. With short-selling also permitted on our platform, no matter which direction the market is moving, investors would have a way to profit off the price movements.

In essence, the more types of crypto investment products are made available to traditional investors, the more easily mass adoption of crypto could be achieved. It is only a matter of time for regulators and traditional financial institutions to come on board as well.

BTC price chart over the past 6 months (daily intervals)

Follow BTCC.com for more news and analysis like this article to help inform your investment decisions.

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