Whatever skeptics might say, Bitcoin really makes you feel good if bought properly. Take Tesla. Of course, the news headings with the name of this company have been overused lately. But have you ever thought about what this sudden $1.5 billion BTC buy has brought them? Now take a deep breath. They have generated 20% on top of their investment in 2 weeks. That’s more money than all the Tesla cars produced in 3 months would cost. Now, while the markets are extremely bullish, every Bitcoin investor, whether a newbie or an old shark, is concerned mainly about one thing. How to buy Bitcoin right in 2021?
Researchers say that the prospects of wide cryptocurrency usage as means of payment remain relatively low for the year ahead. For the most part, especially when it comes to Bitcoin, buyers view it as an investment opportunity. Additionally, this particular crypto doesn’t correlate with traditional asset prices like gold and oil which makes it pretty interesting for holding. Yet, despite the massive influx of retailers (individual users), some experts claim that its further price spikes will depend on large-scale investments. Anyhow, before deciding on your own investment, you should perform your own market research. And meanwhile, let’s talk about the hot new ways to buy Bitcoin.
ETF (exchange traded fund)
There have been numerous proposals for establishing a Bitcoin ETF in the US but the SEC rejected them all so far. One of the most famous was the one proposed by the Winklevoss brothers back in 2018. Yet, their opinion might shift in the coming years since the first two exchange-traded funds (BTCC and EBIT) have been recently approved in Canada and also applied to the Toronto Stock Exchange.
ETF allows to trade assets on a stock exchange during their trading hours. Anyone who wants to trade can set up an account and use their services. Alternatively, for 24/7 trading, it’s possible to trade on spot at exchanges like cex.io Canada.
Stock exchanges offer high liquidity so every experienced trader will be happy looking for entry points in those highly active markets. You don’t need to worry about the safety of your Bitcoins since you don’t actually own them when you trade on ETF. Moreover, you’re dealing with the official financial entity approved by authorities so you can be sure about the security of your transactions and the right tax implications.
One of the downsides is that ETFs trade only during market hours and as you know, for Bitcoin’s volatility that can be not the best option. Users also mention that ETFs charge management fees while if you were hodling Bitcoin on your cold wallet you wouldn’t have to pay for it.
One of the world’s payment giants of the fiat currency market has announced that they are working on implementing crypto payments into their network. All they need is a green light from authorities. At the moment of publishing, the company holds 89 patents for cryptocurrency technology and waits for approval of another 285 globally. Among the new things that they are developing are the security algorithms for crypto transactions, the ways to maintain privacy, on-chain verification, instant blockchain payments, crypto refunds, and so forth. So it looks like they are almost fully prepared for the times when the new digital economy takes off. The only question is when that time comes - should we expect it as soon as 2021 or wait for another few years? Truth is, no one can tell for sure as for the global scale. Presumably, at first, it will vary from country to country, and only then we’ll see crypto payments approved all over the world.
Essentially, what Mastercard is aiming for is an ecosystem of crypto transactions independent from the fiat system. Right now, they have some experience in dealing with cryptocurrencies. For example, users could process payments to some merchants and deposit or withdraw to crypto exchange platforms, casinos, fractional shares trading apps, etc. However, the money was converted on the way and Mastercard accounts have been maintained in traditional currencies. Although, to utilize those services users will need to have some crypto to spend in the first place.
Big news for the beginning of 2021 is that two of the largest custodian banks, Deutsche Bank and New York Mellon revealed their plans about dealing with crypto assets. Their services will be targeted at family offices, asset and wealth managers, digital funds, and corporate investors. They will charge custody fees and in a further perspective, tokenization and trading fees. Among the additional services banks said they will offer a range of traditional financial services like lending assets or participating in staking.
So what will this service be like? Most likely, they will make something like trading and token issuance platforms. Financial analytics say that these banks will strive to connect both digital assets and fiat banking services all in one easy and convenient solution. In the case of Deutsche Bank, specific crypto custody licenses will be provided by the German regulator, BaFin. While the NY Mellon will most likely rely on permission from the OCC.
The easiest way to buy Bitcoin, for which we don’t have to wait as it’s in full operation right now, is crypto exchange. They usually offer a variety of holding, and trading functions, along with staking, lending, and holding benefits. In this case, you don’t have to worry about keeping the security of public and private keys. And though you basically trust your assets to another party, there are some benefits to it. Trusted exchanges that have passed all the necessary regulatory procedures, run extremely high anti-fraud security measures. As a result, buying Bitcoin there might be considered safe.