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Famous topic lately, huh? I am going to assume you already know what a cryptocurrency is. So let’s jump to the next question, what´s an ETF?

ETF stands for Exchange Traded Funds. In other words, funds traded in exchanges.

In very simple terms, ETFs represent “baskets” in the stock market. The reason being is because these “baskets” carry one or a collection of markets sold like stocks/shares. ETFs or investment funds track the performance of a particular index like the S&P 500 and Nikkei 225.

An index describes the market, which investors, financial advisers, and managers use as a tool. Moreover, they use an index to analyze and compare the returns on specific investments.

The Gold market has made ETFs very famous. So much so, because it´s a way to own gold and not have to carry the physical item, owning it through an ETF.

This is a passive investment, simple, diversified, accessible, and low-cost with great liquidity.

Therefore, this may be a cheap and easy way to get your feet wet into the market. Beneficial for people getting started in the trading industry, because you get a piece of several different markets in one “basket”. This is excellent because the diversified nature of ETFs helps to spread the risks.

ETFs are for people who are active and would like to take care of the trading themselves. The next similar option would be Mutual Funds. This is just in case you prefer a professional to do it, instead of doing it yourself.

In that case, you should take into consideration that other people will never take care of your money as you would. They will keep an eye out for their own gain, not yours, no matter what they say. And you might be okay with that, and that´s what matters, as long as you take all aspects into consideration.

Choosing an investment is a matter of preference and risk tolerance. Whichever you decide to go with, please make sure to get a financial adviser. They can help you find the best investment for your lifestyle.

As we all know the cryptocurrency market at the moment is a very risky market, and so are ETFs. As of today, there are no regulations for Cryptocurrency ETFs. SEC, an independent federal agency in the U.S has yet to approve cryptocurrency ETF proposals.

That said, keep in mind that you should know your investor´s risk profile. It will show your risk tolerance, which is crucial due to an as risky market. Moderate and Aggressive profiles may fit best within the ETF´s market.

Currently, you can find cryptocurrency ETFs at exchanges such as XBT Provider, Huobi Global, OKEx, Coinjar, Coinbase, Grayscale Investments, and others. 

When you are ready to choose an exchange, analyze the following: accepted currencies, the pairs available, deposit, withdrawal and commission fees, Brokerage fees, transfer methods, and available contracts.

Final Thought

The history of crypto ETFs has been controversial. Although it has been popular in the crypto community SEC has not given it a second thought. There´s been some good efforts from influential people in the crypto industry to get SEC to approve the crypto-based ETFs. However, with no success.

SEC a renowned agency plays a crucial role towards global adoption. Especially because of all the people waiting in the sidelines to invest. They will feel safe to do so with the regulations in place.

ETFs have provided excellent returns in the stock market. For that reason, the crypto community hopes that it can soon be regulated in the crypto market as well. This would take the industry to the next level.

The Winco Team


Disclaimer: Our team works hard to bring you the best content in the cryptocurrency market, but it is only our point of view and not legal advice, and may be divergent from other opinions, so please do not make any decisions without concluding studies of your own to understand the profit possibilities and uncertainties involved at your own risk.

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