Cryptocurrencies: How You Could Invest in Them
There are several ways you can get indirect exposure to cryptocurrencies through Schwab. Although you cannot directly buy or sell Bitcoin or any other cryptocurrency at Schwab (nor do we accept or disburse cryptocurrencies for settlement of securities or futures transactions), Schwab provides several ways to access cryptocurrency markets:
Cryptocurrency coin trusts: Over-the-counter cryptocurrency trusts allow investors to trade shares in trusts holding large pools of a cryptocurrency, although these can involve high volatility, hefty fees, and other risks. Typically, these products are launched as private placements to accredited investors. Once holding period requirements are met, accredited investors may sell their shares in the “over-the-counter” market to all investors, including smaller retail investors. Historically, these products have tended to trade at large premiums or discounts to the value of their underlying assets due to their limited ability to match the demand for shares with the available supply (i.e., those shares for which the holding period has been met).
Bitcoin futures: Bitcoin futures contracts are agreements to buy or sell a specific quantity of Bitcoin at a specified price on a particular future date. Schwab clients with a futures account can trade Bitcoin futures contracts directly. Traded contracts are settled in cash, not cryptocurrency.
Exchange-traded funds (ETFs) and mutual funds: ETFs and mutual funds currently provide indirect exposure to cryptocurrency through crypto futures contracts and/or the stocks of companies participating in cryptocurrency and blockchain activities. Consider: