Investing in Bitcoin With Trusts

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bitcoin investment trustNowadays, investors can no longer ignore such instruments of investment as Bitcoin. One of the current ways to meet investors, brokers, and traders with crypto currency is with a Bitcoin investment trust. Such trusts are not new to the financial markets and people understand their purpose. In general, investment trusts accumulate clients’ money and reinvests them into profitable areas of the market. A trust’s customer buys a share in a company, which usually represents the price of all funds as well as the assets of the fund. Therefore, a client’s capital increases as shares and assets of the company increase in value too. This is how it works. There is no major difference with a Bitcoin investment trust other than the main asset, the Bitcoins, which the fund owns.

They Make it Reliable

The idea of a Bitcoin investment trust is simple. Such a fund makes investing in Bitcoins an acceptable and appropriate option for financial institutions like hedge funds or banks. The second reason is to help people invest in Bitcoins safely. For these purposes The Bitcoin Investment Trust was created. It was started by the Grayscale Company. They provide the option of purchasing and the storing of Bitcoins within their trust. They provide a simple and secure solution, especially for traders and investors who are aware of digital currencies such as Bitcoin. Additionally, they back investors in such cases as Bitcoin’s future or even when the legal status is uncertain in some countries. Clients do not purchase Bitcoins themselves, they purchase shares in the trust, which are dependent on coin’s current value.

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Another fund is SecondMarket, which is a well-known company providing custodian bank services for BIT. In 2014, SecondMarket announced that are to start a new US-based exchange for cryptocurrencies. SecondMarket is a respected financial institution which works with risky assets and provides transactions to software firms.

Related: Two Different Ways to Invest Your Bitcoins: Trade and Store

They make a wide step for Bitcoin system development. A new form of investing in Bitcoins provides to investors clear, simple, and a transparent instrument to start trading on Bitcoin. It definitely will help Bitcoin as a currency, to become more popular and an attractive proposition. This kind of popularization of cryptocurrency may stimulate people to pour their money and funds into it.

Safety as the Main Advantage

Buying shares in a fund has many advantages in comparison with owning Bitcoins directly. Bitcoins, which are owned by the fund, are difficult to steal. Companies such as SecondMarket and BIT provide security for your digital currency to help protect against theft. Additionally, holding Bitcoins on a personal computer is not the safest way to store them.

Clients will likely have some issues with the law or with authorities if Bitcoins are prohibited in his or her country. This is a very important issue for people who’d like to invest in digital currency and for the Bitcoin community as a whole. As an example, Bitcoin may be prohibited in China though it’s one of the largest markets in the world for cryptocurrency.

In this particular case, shares in the trust are going to provide a solution to allow for a legal investment. Formally, a customer does not buy Bitcoins at all. He or she buys a share in a trust, which owns Bitcoins. This is the substance of it.

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