Bitcoin, like the stock market itself, rallied strongly after hitting lows during the coronavirus pandemic. And after a sharp recent pullback, the digital currency has now rallied again to new highs.

So is GBTC stock a buy right now? Let’s take a look at what Grayscale Bitcoin Trust (GBTC) is and how it’s performing.

Gold has traditionally been the asset class investors have fled to in times of uncertainty. There was hope among cryptocurrency enthusiasts that Bitcoin would serve as an alternative during the coronavirus crisis. With a number of notable big business names getting involved in the space, such as Elon Musk’s Tesla (TSLA), acceptance is becoming more widespread.

One hurdle is that investors have limited options to get exposure to the digital asset via the stock market. One possibility is Grayscale Bitcoin Trust, which owns and tracks Bitcoin.

More specifically, Grayscale Bitcoin Trust tracks the Bitcoin price based on the TradeBlock XBX Index. But while the trust closely mirrors the performance of Bitcoin, the GBTC stock price tends to over- or undershoot performance based on investor sentiment.

One key thing to remember when considering buying shares in Grayscale Bitcoin Trust is that it’s not a true common stock. Stocks are shares in a company, while GBTC shareholders own part of an open-ended grantor trust.

Grantor trusts are required to hold a fixed portfolio, rather than a variable one. Such trusts often hold physical commodities and currencies. In this case, GBTC is a trust that only holds Bitcoin. Bear in mind that the Investment Company Act of 1940 does not cover grantor trusts, so they provide none of those investor protections. They also do not qualify for regulation by the Commodity Futures Trading Commission.

However, grantor trusts are covered by the Securities Act of 1933 and the Securities Exchange Act of 1934, and must disclose regular financial information.

Previously it broke out of a cup-without-handle base on Oct. 22. The ideal entry point here was 14.88.

The recent action underlines the volatility of GBTC stock and Bitcoin itself. It fell by more than 40% during its recent correction at the end of January.

The relative strength line has spiked again to a new all time high. It has been rallying strongly after a sharp January pullback. This gauge reflects a stock’s performance vs. the S&P 500.

The price of Bitcoin itself fluctuates wildly, and its performance underlines the opportunity and risks of the cryptocurrency.

It is now eyeing the $50,000 milestone after surging to a record high of just over $48,000.

Bitcoin has recovered well since falling away from its previous record high of almost $42,000. However the fact it lost 28% as it tumbled from this mark underlines the volatility of the digital asset.

Tesla (TSLA) helped boost the price of Bitcoin to a record high after revealing a $1.5 billion investment in Bitcoin on Feb. 8.

It came just weeks after the firm’s billionaire CEO Elon Musk added a Bitcoin hashtag to his Twitter biography.

Tesla has also said it will start accepting Bitcoin as a payment method. However it warned this will be “subject to applicable laws and initially on a limited basis.”

The move led to the price of the cryptocurrency spiking to a record high. It has also sparked speculation over whether other major companies will follow Tesla’s lead.

Janet Yellen, the new Treasury Secretary, struck a skeptical tone on cryptocurrencies such as Bitcoin during her testimony to the Senate Finance Committee.

“I think it important we consider the benefits of cryptocurrencies and other digital assets, and the potential they have to improve the efficiency of the financial system,” she said. “At the same time, we know they can be used to finance terrorism, facilitate money laundering, and support malign activities that threaten U.S. national security interests and the integrity of the U.S. and international financial systems.”

However she also said cryptocurrencies offer “potential benefits for the U.S., and our allies.” The former Federal Reserve chairwoman also said it is important to look into ways to “encourage their use for legitimate activities while curtailing their use for malign and illegal activities.”

Nevertheless, the price of Bitcoin retreated sharply on her remarks, and it seems she will play a key role in its progress going forward. The fact she has previously said she is “not a fan” of Bitcoin may not bode well.

Grayscale Bitcoin Trust said in its latest report it experienced $719.3 million in inflows in the third quarter. In addition, it saw under management swell from $1.9 billion to an estimated $4.7 billion in 2020.

According to the Trust, institutional investors made up the bulk of its holders, 84% of the total. The number of overseas investors has also been increasing, rising to 60%, compared with 55% over the trailing 12 months.

One big name backing Bitcoin is hedge fund billionaire Paul Tudor Jones, who is most famous for raking it in during the Black Monday stock market crash of 1987. The Tudor Investment Corporation founder believes the Bitcoin rally is still in the “first inning.” He sees the digital currency as the best inflation hedge.

He cited the Federal Reserve’s unprecedented quantitative easing as a reason for investors to look for protection in case of inflation.

“The reason I recommended Bitcoin is because it was one of the menu of inflation trades like gold, like TIPS break-evens, like copper, like being long (on the) yield curve; and I came to the conclusion that Bitcoin was going to be the best inflation trade,” he told CNBC.

A number of heavy hitters have been snapping up Bitcoin of late. Business intelligence firm MicroStrategy (MSTR) announced Sept. 15 that it had bought $250 million in Bitcoin. Square (SQ) disclosed in early October a more modest $50 million investment in the Bitcoin market. As bigger buyers have bought more Bitcoin, the supply has been drying up. This pushes up its price.

Another factor that previously gave the price of Bitcoin a boost is that <b class="css-14iz86j-BoldText e5tfeyi0">PayPal (PYPL) entered the cryptocurrency market in October. Customers can now buy and sell Bitcoin and other virtual currencies using their PayPal accounts.

The likes of Square’s Cash app and Revolut had already offered such a service, but are much smaller than PayPal.

Virtual coins are also used to make purchases from the 26 million sellers that accept PayPal. The payments firm has been rolling out buying options in the U.S. and is aiming to carry out a full rollout early in 2021.

When purchases are made, PayPal will convert the cryptocurrency into the relevant national currency. This means merchants will never actually be paid in crypto coins.

Bitcoin is sometimes called “digital gold,” enhancing the risk-adjusted returns of traditional investment portfolios.

One key difference between gold and Bitcoin is the former is actually a physical asset, and has a number of uses besides being a commodity of exchange. For example, almost 80% of gold consumed each years is made into jewelry. It is also a highly efficient conductor that is able to carry tiny electrical charges.

Gold is often a hedge against inflation or other economic or market uncertainty. Gold prices have hit record highs, briefly hitting $2,000 an ounce recently. Silver prices also have spiked to multiyear highs. They’ve retreated from early August peaks.

Meanwhile, Bitcoin and related instruments like GBTC have not been a store of value during the coronavirus crisis.

While GBTC is a trust that only holds Bitcoin, the GBTC stock price does not exactly match the underlying Bitcoin price. Depending on investor sentiment, its shares can trade at a premium to its assets, or at a discount to its total Bitcoin holdings.

However it is the fastest way stock market investors can get cryptocurrency exposure without actually buying their own Bitcoin. This is because regulators have not approved a Bitcoin ETF. And buying Bitcoin directly requires setting up and funding a separate account, often paying high trading fees.

Grayscale Bitcoin Trust, like the underlying Bitcoin, is prone to wild swings. Ultimately, it’s a bet on Bitcoin, which is a speculative asset more than a real currency. Increasing institutional investment makes it an asset worth watching, but recent price swings underline its volatile nature.

GBTC stock posted gains far in excess of the S&P 500’s in 2020. However it is now well above its most recent actionable entry point. Those looking to invest in the cryptocurrency would be best served waiting for a new buy point to emerge.

Given the asset’s history of wild declines however, those who buy in now could be ultimately left nursing painful losses.

Bottom line: GBTC is not a good buy right now.

Most investors would be better served studying the stock market, and compiling a watchlist of profitable companies setting up in proper bases, when looking for stocks to buy.

To find the best stocks to buy or watch, check out IBD Stock Lists such as the IBD Leaderboard.

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It seems to be the season of giving, and Bitcoin is doing just that, at least for its institutional backers, such as MicroStrategy, Galaxy Digital, Square and Marathon Patent Group, which got in somewhat early on the BTC gravy train.

In this regard, PayPal revealed on Feb. 4 that its fourth-quarter profits for the year 2020 had increased by 200% as compared to the previous fiscal cycle, citing its two new offerings — i.e., a cryptocurrency tool and a “buy now pay later” feature — as being the primary drivers for its monumental growth.

If that wasn’t enough, company CEO Dan Schulman noted in a recent interview that the aforementioned development was just a “small sign” of things to come and that this is just the “beginning of an extensive road map around crypto, blockchain, and digital currencies” for PayPal.

What this seems to suggest is that firms from the traditional finance space that are actively investing in crypto have been exhibiting monetary trends that are significantly different from their contemporaries. In this vein, even Tesla’s stock market perception could now change drastically after the company recently made its way into the crypto market by purchasing $1.5 billion worth of BTC.

There’s no denying that an increasing number of companies from the realm of traditional finance are making their way into the crypto sector. For example, according to Ross Stevens, CEO of NYDIG, his crypto asset management firm already has enough institutional buy orders lined up to push its Bitcoin holdings over $25 billion by the end of 2021.

In light of such data, Sam Bankman-Fried, founder and CEO of quantitative crypto trading firm Alameda Research, which currently has $2.5 billion worth of assets under management, told Cointelegraph that the link between company stocks rising in line with the company’s BTC acquisition moves is very real, adding:

Similarly, Justin Barlow, research analyst for The Tie — a provider of social media data for digital assets — also believes that this ongoing surge in equities of certain firms is strongly related to their BTC acquisition strategies:

“For evidence, all you need to do is look at the market cap of the companies before and after a BTC announcement,” he added, pointing to examples of MicroStrategy, Square (NYSE:SQ), and Marathon Patent Group (NASDAQ:MARA), which are all up well over 50% since their respective announcements.

He further opined that it’s safe to assume that an increasing number of companies will look to capitalize on this ongoing trend, especially as possessing “BTC reserves” is becoming more common among firms and the demand for increased crypto exposure, from retail as well as institutional investors, is also rising at a rapid pace.

As everyone would have probably heard by now, it was recently unveiled that car manufacturer Tesla, had invested big in crypto, having acquired $1.5 billion worth of BTC via various monetary avenues, thus sending the currency’s value up by $3,000 within a matter of minutes.

Not only that, Tesla — one of the world’s top 10 largest companies by market cap and a member of the S&P 500 — will now also be accepting payments for its products in BTC, potentially sparking an unprecedented wave of corporate and institutional ownership in Bitcoin. On the subject, Sheraz Ahmed, head of business development for the Crypto Valley Association — a blockchain ecosystem backed by the Swiss government — told Cointelegraph:

As of Feb. 8, MicroStrategy’s stock value has skyrocketed by +670% since the company made its initial investment into Bitcoin. Not only that, the stock’s correlation with BTC, too, has increased by +300% over the same time frame.

In the wake of this unprecedented market movement, the firm has continued to purchase additional Bitcoin, with its most recent acquisition coming on Dec. 21, when the business analytics and mobility provider added an additional 29,646 BTC (estimated to be worth roughly $650 million) to its reserves.

A similar trend was also witnessed in relation to Square’s stock value, which, on Oct. 8, 2020, the day the company purchased 4,709 BTC, was at $183.50 only to increase by 30% over the next three months to currently sit at $258. To really put things into perspective, over the same time period, the S&P 500 rose by a meager 4%.

On the heels of Tesla’s big crypto announcement, a report by Reuters claims that Apple might also be looking to get on board the crypto bandwagon in the near future, especially since the multinational giant has a “clear opportunity” to offer a buying and selling mechanism for cryptocurrencies to its massive clientele — a move that could propel the company into the heart of the current crypto gold rush.

In this regard, Apple already has a Wallet app as well stringent Know Your Customer protocols in place, which, if employed within the context of cryptocurrencies, could make the United States a global leader in crypto assets, even hampering any possibility of a government shutdown of the industry. In regard to the subject, Ahmed said:

Also in 2017, a number of startups tried to trick investors by adding the terms crypto and blockchain to their names, suggesting that they were using these technologies actively. However, this time around, there are a number of live examples of firms buying heavily into BTC and Ether (ETH).

Lastly, it stands to reason that with the continued rise of the cryptocurrency industry, a number of companies are now able to show that their diversified treasury tactics are paying off, thus, in turn, forcing other companies to follow in their footsteps. “Just recently, an early adopter of Bitcoin, MicroStrategy, welcomed 6,917 enterprises on their corporation’s program — showing the significant interest in this space,” Ahmed pointed out.

Thus, on the subject of whether this current upward momentum will be able to spur BTC’s value to twice its current value, Cointelegraph reached out to CryptoYoda, an independent cryptocurrency analyst, who opined that the market is still not ready to rise because “supply outweighs demand,” adding:

Also, with crypto being the extremely volatile market that it is, it would be unsurprising to see a heavy correction in the coming few days, especially since the market has been on a tear, with gains across the board.

This could potentially result in the stock prices of companies that have invested big in crypto being affected adversely since volatility fears may once again grip investors, causing large sell-offs. That being said, big companies buying into crypto is still a new occurrence, so it’s difficult to predict how the stocks will behave when a BTC correction happens.

Over the last year, Bitcoin and other cryptocurrencies have rebounded from their lows in March to reach all-time highs in 2021. As bitcoin continues its run to $50,000 and perhaps beyond, multiple cryptocurrency-affiliated stocks have joined in on the fun. 

Riot Blockchain Inc. (RIOT), headquartered in Colorado, focuses on mining cryptos and invests in the blockchain space. This includes a 13% interest in Coinsquare Ltd., a Canadian crypto exchange. Riot Blockchain rebounded from its low of $0.51 back in March of 2020 to a high of over $47 in February 2021 — an unbelievable return of over 8,000%!

Are you thinking about buying shares in Riot Blockchain? Our beginner’s guide below will help you begin this process and launch your investing career.  

Follow these 3 basic steps to become an owner in RIOT:

As Bitcoin approaches $50,000, RIOT has expanded its crypto mining operations. The company now runs over 11,000 miners and plans to increase mining operations by year’s end.

Buying a stock like RIOT intrinsically tied to the value of bitcoin presents a risk above and beyond most other stocks. Bitcoin and other cryptocurrencies, still a relatively new space, make it more prone to volatility. While more and more companies have invested in bitcoin to start 2021, risks such as government regulation remain a constant threat.

To start, you need to select a brokerage service. Almost all brokerages have moved to a commission-free model so you can purchase shares of RIOT free of charge.

Just because brokerages tout commission-free pricing doesn’t mean that you shouldn’t compare other brokers. Define your investing goals and choose a brokerage that best suits them. You may find it helpful to choose a brokerage that offers paper trading so you can get the hang of things before putting your money on the line.

Check into any promos/perks that brokerages offer to new users. Taking advantage of these offers means you could get bonus funds to trade with or you could even tap into free stocks.

Webull, founded in 2017, is a mobile app-based brokerage that features commission-free stock and exchange-traded fund (ETF) trading. It’s regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Webull offers active traders technical indicators, economic calendars, ratings from research agencies, margin trading and short-selling. Webull’s trading platform is designed for intermediate and experienced traders, although beginning traders can also benefit.

Webull is widely considered one of the best Robinhood alternatives.

TradeStation is for advanced traders who need a comprehensive platform. The brokerage offers an impressive range of investable assets as frequent and professional traders appreciate its wide range of analysis tools. TradeStation’s app is also equally effective, offering full platform capabilities.

This publicly listed discount broker, which is in existence for over four decades, is service-intensive, offering intuitive and powerful investment tools. Especially, with equity investing, a flat fee is charged, with the firm claiming that it charges no trade minimum, no data fees, and no platform fees. Though it is pricier than many other discount brokers, what tilts the scales in its favor is its well-rounded service offerings and the quality and value it offers its clients.

Moomoo is a commission-free mobile trading app available on Apple, Google and Windows devices. A subsidiary of Futu Holdings Ltd., it’s backed by venture capital affiliates of Matrix, Sequoia, and Tencent (NASDAQ: FUTU). Securities offered by Futu Inc., regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Moomoo is another great alternative for Robinhood. This is an outstanding trading platform if you want to dive deep into smart trading. It offers impressive trading tools and opportunities for both new and advanced traders, including advanced charting, pre and post-market trading, international trading, research and analysis tools, and most popular of all, free Level 2 quotes.

Get started right away by downloading Moomoo to your phone, tablet or another mobile device.

Once you open up your brokerage account and fund it, decide how you want to invest in RIOT. Consider the volatility of the asset, your overall account balance and your investing timeline.

Investing more than a small percentage of your portfolio into any one stock is always risky, especially when intrinsically tied to the cryptocurrency market. Buy shares conservatively and define where you want to take profits and where you want to cut your losses.

Now that you know how many shares of RIOT you want to purchase, you need to determine how you want to purchase them using an order type. 

Using a market order is best if you want to take a position in a company as fast as possible. This order type executes immediately at the current market price. Using a limit order is best if you want to buy into a company at a set price. 

Limit orders allow for much more controlled trading, which is especially important when trading volatile stocks such as RIOT. Market orders can result in your buy order filling at an unfavorable price, which can mean instant losses for you. 

Click or tap the “buy” button and sit back and relax as your broker fills your order. Once your order fills, the shares will appear in your brokerage account.

Riot Blockchain Inc. (RIOT) was originally founded back in 2008 as BiOptix Diagnostics, a technology/biotech company aimed at the detection of molecular interactions. In October of 2017, the company announced its investment in Coinsquare Ltd., one of Canada’s top crypto exchanges. The company also announced its plans to change its stock ticker to RIOT. After the name change, RIOT shot up more than 500% in tandem with Bitcoin’s meteoric rise in December of 2017, making a high of over $46 in December of 2017.

After Bitcoin topped out at the end of 2017 and fell back down to earth, Riot Blockchain’s stock price declined significantly. RIOT finally bottomed out at around $0.51 in March 2020, after Bitcoin and the whole market collapsed due to the COVID-19 pandemic. Following in Bitcoin’s footsteps, RIOT reached a high of over $47 on February 12. All in all, RIOT has been one of the hottest stocks of the entire market in 2021.

The cryptocurrency space can be extremely volatile, but an investment in Riot Blockchain Inc. can bring some positives such as:

While many people agree that the blockchain technology underlying bitcoin is an invaluable advance for finance, the price of bitcoin could be too inflated already.

If you’ve launched your own crusade to learn how to buy stocks, you’ve probably already noticed that some have been on fire in 2021. Shares of RIOT have exploded to an astounding 8,000+% from their March lows, likely resulting in more and more traders piling into the trade in search of a quick profit. As more and more companies announce their acceptance of bitcoin in 2021, this momentum could continue.

Note that any stock that rises this much presents an added risk. Focus on only risking a minimal amount of capital and define when you want to get out of the trade. As bitcoin continues to become more and more mainstream, RIOT could continue to make headlines in this already interesting year.

TL;DR Breakdown

Bitcoin price established a solid support near the $43,000 and $44,000 area at the beginning of the week after dropping sharply from its new all-time high of $58,000 last week. The world’s largest cryptocurrency had infiltrated the bottom boundary of a rising price channel during the decline, displaying signs of weakness as February’s bullish momentum came to a halt. 

Earlier this week, after a consolidation phase within a falling wedge pattern, Bitcoin price successfully penetrated the upper boundary, sparking a frantic rally that reached $52,500 as of yesterday. This morning, the world’s leading cryptocurrency lost its grip of the $50,000 price level amid a wider liquidation in both equities and the cryptocurrency market. 

The flagship cryptocurrency has shed over 7 percent of its price over the last 24 hours and at press time, it is trading at a market price of $46,613. Regardless of the dip, data by Glassnodes indicate that long term Bitcoin holders were stockpiling despite the sell-off. So far, the daily price range is in between $46,300.00 — $48,376.20. 

After rallying towards $52,500 yesterday, Bitcoin price retraced back to below $50,000, moving below the bottom boundary of an ascending parallel channel. Besides, the $52,500 price level represents the Golden Fibb retracement level of the decline from $58,000 all-time high price and last week’s low of $43,000. As such, Bitcoin price appears to be trading in a bearish market for the short term. 

Moreover, Bitcoin’s correlation to the S&P 500 reached a 5-month high this month. Bitcoin has been correlated to traditional financial markets over the last several months and this was evident a few weeks ago when Bitcoin price trailed stocks at close range. The last time Bitcoin and stocks followed each other this closely was back in November last year. 

Today, U.S. Federal Reserve Chairman Jerome Powell delivered a disheartening speech that resulted in both S&P 500 and NASDAQ to shed about 3 percent of their value. The Fed chief noted that he “would be concerned” by constraining the financial terms as increasing yields on government bonds exert a great deal of pressure on the cost of borrowing. Following in the footsteps of S&P 500 and NASDAQ, Bitcoin price declined sharply and it is still dropping at the time of writing. 

The comments by Powell comes amid a raft of mixed predictions by popular analysts on the future of Bitcoin. Bloomberg’s Mike McGlone used historical data to suggest that Bitcoin price is journeying towards $100,000 on March 4. McGlone points out the rising discount for shares in Grayscale’s Bitcoin Trust. The discount applies to when the price of Grayscale shares is trading at a lower price than the underlying crypto asset, and it is currently at the level it was during the March 2020 crypto market crash. 

Crypto Twitter analyst, MasterChangz, tweeted to his followers that the Bitcoin price will hit $200K before we get in June 2021. According to him, the next rally will be towards $77,000 in two weeks time. 

Bitcoin’s price has seen its fair share of ups and downs over the past month. While the coin has been able to set record highs in 2021, there have also been strong pullbacks.

In the past 24 hours alone, Bitcoin breached the $50,000-mark after days, before succumbing to selling pressure again to trade under the said level. However, as always, the question remains – How far away is the next price rally to its latest ATH. Interestingly, there are signs that traders won’t have to wait too long before such an uptrend materializes.

Large holders of the coin have played a key role in BTC’s growth over the years and 2021 has only highlighted their importance when it comes to price appreciation. According to data provided by Santiment, Bitcoin’s largest holders with over 1,000 Bitcoins currently hold around 42.56% of the total supply.

On 8 February, this was around 43.29% – a 54-week high, and one can argue that this fueled the Bitcoin run that established a new ATH that month. With its value inching towards 43%, traders can expect this to be an indication that whales are looking to fuel another rally in the coming weeks.

Bitcoin’s market data backed up this possibility. In Bitcoin’s market cycle, there has always been a balance between hodlers selling and re-entering the market at a lower price point. The smart money scenario may play a key role this time around as well.

Long-term supply decreases as Hodlers take profits during bull markets and increase in re-accumulation phases at cheaper prices. This lends context to the latest price dip as Bitcoin still retains strong fundamentals. In fact, its price corrections are symptomatic of hodlers selling high only to buy low and boost the price and complete a market cycle. Such has been the case over the past few months and this is likely to continue in 2021 as well.

It is also important to note that Bitcoin’s rally, despite being a few months old, can be considered to be in its mid/early stages. Data provided by Glassnode highlighted this aspect of Bitcoin’s price action by taking into consideration the coin’s reserve risk and contrasting it with its previous bull runs.

At the time of writing, Bitcoin’s volatility was continuing to rise. In fact, according to market data provided by BitPremier, the 30-day BTC/USD volatility was observed to be around 5.35 percent – a level not too far away from its 6-month high of 6 percent.

Increased volatility makes the coin open for further price action in either direction. Ergo, it also slightly increases the possibility of the cryptocurrency noting a greater pullback. If BTC is unable to sustain a breach of the $50k level, it could be trouble for its price aspirations in the short-term.

However, given its strong fundamentals and past precedents backing a renewed rally, traders can take consolation in BTC’s long-term prospects. Then again, this depends on the resistance being flipped to support – a scenario that will materialize if Bitcoin is able to gain substantial buyer momentum in the coming days. Such a trend reversal will enable it to take further advantage of its strong fundamentals while pushing it towards its latest ATH.

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Jude Gerald Lopez is a full time News Editor at AMBCrypto covering the US and Indian market. He is a post-graduate in English literature with around 4 years of teaching experience in Indian literature.

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Bitcoin: Has the bull market faded?

After Tesla announced it has invested $1.5 billion in Bitcoin and expects to start accepting the cryptocurrency as a payment for its electric vehicles in the near future, the Bitcoin price went soaring. It went from around $39,400 to an all-time high of over $48,000 in less than 24 hours.

The price is now up by over 50% in the first six weeks of 2021. Led by Elon Musk, Tesla’s investment is obviously in profit already: depending on the exact day of the purchase, it is likely to be worth over $2 billion, pointing to a paper profit of over $500 million. To put that in context, when the electric car-maker made its first-ever annual net profit in 2020, it was just over $700 million.

Tesla’s move into Bitcoin comes on the back of a wave of institutional money invested in the leading cryptocurrency in recent months, plus numerous other companies putting it into their treasury reserves. With the world’s sixth most valuable company also saying it might buy and hold other digital assets “from time to time or long term”, it must be tempting for other major companies to do likewise.

The prospect of a bluechip invasion into Bitcoin has caused much excitement among cryptocurrency investors. But if Tesla does trigger such a goldrush there will also be some unsettling consequences.

Tesla justified this material change in the way it manages its treasury reserves by stating that investing in Bitcoin will “provide us with more flexibility to further diversify and maximise returns on our cash”. Corporate treasurers have always used the money markets to invest surplus cash to eke out small yields, and it is harder than it used to be in the current long-term low-interest-rate environment.

All the same, this is very different to standard money management. Bitcoin is a highly volatile asset that you would not typically associate with the cash reserves on the balance sheet of a listed company worth close to a trillion US dollars. As recently as March 2020, the price dipped below $4,000. Even in 2021, the price fell more than 30% before its most recent surge.

Such a rise would drive up the value of the Bitcoin on corporate balance sheets to multiples of what it was at the time of investment. Tesla’s 8% allocation may already have gone up to 12% of the value of its reserves, for instance. And if it follows through on a potential plan to keep any Bitcoins it receives for electric cars instead of converting them into dollars, that percentage could rise all the faster.

The problem is the potential effect on company share prices. Tesla’s share price rose 2% on the news of the Bitcoin investment, though it has since fallen by 5%. But a longer-term example is Canadian tech company Microstrategy. Its share price has ballooned tenfold in value in the past year on the back of a heavy investment into Bitcoin, but is also down by almost a quarter in the days since the Tesla announcement.

Writ large, this could make stock markets far choppier in future – and vulnerable to a nosedive when the Bitcoin bull market ends. It would be easy to imagine that this could prompt a wider wave of selling as investors sought to cover their loss-making positions, which could be very dangerous for financial stability.

Global regulators will no doubt be concerned about a potential volatility spillover from digital asset prices into traditional capital markets. They may not permit what could quickly amount to effective proxy approval by the back door for companies holding large proportions of a volatile asset on their balance sheets.

The view from US regulator the SEC will be extremely important, and it is difficult to predict the response of newly appointed head Gary Gensler, who is himself a crypto expert. We may see anything from a wait-and-see approach through to a ban on listed companies holding any Bitcoin-like assets.

But I would expect that if the price of Bitcoin continues towards $1,00,000, there may be a regulatory restriction on the reserve percentage that listed companies can hold in digital assets. This would be similar to the US rule that companies cannot buy back more than 25% of the average daily volume of their own stock.

Such a rule would force companies to sell Bitcoin if a price increase meant their holdings broke the maximum level, creating a form of sell pressure that the crypto market has not seen before.

For now, however, Bitcoin continues to look like a “buy” asset on the back of the Tesla announcement. The crypto community will be watching to see whether other major companies follow suit and whether Tesla has the conviction to stay invested when its next quarterly announcement comes around. But if this trend continues, make no mistake that a reckoning will be coming over the prospect of the heady volatility of the crypto market going mainstream. Watch this space.

Gavin Brown is an Associate Professor in Financial Technology at the University of Liverpool.

This article first appeared on The Conversation.

As Tesla’s announcement that it had purchased $1.5 billion in bitcoin rallied the digital asset markets this week, stocks that have exposure to bitcoin continued to surge as investors looked for alternative ways to get access to the sector. 

The basket of stocks with bitcoin exposure are limited, albeit growing.  The list includes MicroStrategy, Tesla, and Silvergate Bank, Voyager, and Galaxy Digital, PayPal, Square, and most recently Tesla. 

Some companies contribute infrastructure and distribution for digital assets like PayPal, whereas some provide exposure by simply owning a significant amount of bitcoin like Microstrategy.  Investors are piling into these stocks, either because their mandate does not allow them to purchase bitcoin directly or the frictions of owning crypto are still too great.

“There are a number of equities that have recently been serving as precursors to crypto trading,” said Sam Bankman-Fried, CEO of the digital assets exchange FTX. “A number of people went from trading GameStop stock to Dogecoin to bitcoin, and in general we’ve seen increasing crossover between Wall Street Bets-style stocks and crypto trading.”

Bankman-Fried thinks that the lack of a bitcoin ETF (though that may soon change in Canada) has created a market vacuum and these stocks are the next best thing. 

The data corroborates Bankman-Fried’s statements.  In fact, many of these stocks have begun to outperform bitcoin itself, highlighting just how hungry investors are for exposure.

Microstrategy, a publicly-traded business intelligence firm, first announced a $250 million purchase of bitcoin back in August of 2020.  Over the past six months, the firm has continued to add to their appreciation, which sits at over $3.1 billion in today’s prices. Over that time period, Microstrategy’s stock has surged 729 percent, outperforming bitcoin which is up 414 percent. 

Other stocks with exposure to bitcoin have performed similarly.  Silvergate and Voyager have had breathtaking rallies in recent months, soaring approximately 900 percent and 1,765 percent respectively.

Tesla is a much larger company than any of these companies, so the impact of its bitcoin buy is less clear for now.  “The supply of bitcoin is very limited and demand is increasing,” Mike McGlone, a Bloomberg commodity strategist told Blockworks in an interview. “Tesla’s shares are rapidly increasing in supply with the number of shares outstanding.” McGlone pointed out that Tesla’s market is about to become much more competitive with a number of electric vehicles soon to be rolled out by the big auto manufacturers which will certainly lead to more volatility. 

“It’s a standoff between the potential for an independent, organically adopted, global digital form of gold versus a company facing plenty of competition,” he wrote in a note to clients in mid-January. 

In this note, McGlone argued that basic math indicates that if prices stay the same, the market cap of Tesla should advance at a faster pace than Bitcoin and may reach $1 trillion sooner, due to the more rapidly rising supply of the equity.

“The near certainty of declining Bitcoin supply versus. the rising amount of Tesla shares outstanding tilts favor toward an outperforming crypto price, if the rules of economics are a guide,” he wrote. 

While companies like Microstrategy offer investors a compliant wrapper to gain direct exposure to bitcoin, companies like Silvergate provide a different kind of exposure to the growing digital assets ecosystem.

Silvergate bank is one of the few companies that offers banking services to the digital asset and blockchain services industry.   

In a recent earnings report, the bank announced that its customers — some of the largest crypto exchanges — had placed $2.9 billion in new deposits during the last quarter of the year. 

Silvergate also operates the Silvergate Exchange Network, a crypto-fiat on-ramp, and SEN Leverage, which allows its customers to access credit using their bitcoin as collateral.

Morningstar’s assessment that Silvergate is set to “outperform” in 2021 is selling its performance short. The stock is up almost 900 percent as investors stake their place in a company that enables the fiat-crypto ramps so essential for liquidity. 

Michael Del Grosso, an analyst with Compass Point that covers Silvergate, points to the utility of the Silvergate Exchange Network in providing liquidity to traders to the tune of $240 billion a year as a reason for the stock’s spike. 

“It was really a seminal quarter for them. You saw massive deposit growth,” he said pointing to investors and institutions looking for cross-exchange liquidity utilizing Silvergate’s network.  

Although Tesla hasn’t disclosed the partners used in purchasing its bitcoin, Del Grosso believes that most large buys of digital currency by companies the size of a Tesla or MicroStrategy are going to be touching the Silvergate network in some way and impacting SEN volumes. 

In theory, the type of exposure that Silvergate offers investors should have less of a direct correlation with the price of bitcoin.

“Empirically the stock has a very high correlation with bitcoin’s movements. Fundamentally there is not that high of a correlation between the absolute price of bitcoin and their revenue generation,” Del Grosso explained. 

Silvergate generates revenue when more customers adopt bitcoin and allocate capital to it as an asset class. This is something, Del Grosso said, that can happen in both a bull and bear market — and especially in a volatile market which is a favorite of traders. 

“A large cohort of Silvergate’s customers are crypto hedge funds. These funds thrive on volatility,” Del Grosso said.

Investors are looking at bitcoin macro proxies in two ways: exposure to the asset, and exposure to the industry. While all boats have risen in this rising tide, it is still unclear which type of exposure bears the greater risk.

Companies like Silvergate that have fundamentals tied to infrastructure could prove to be more resilient in the face of bitcoin’s infamous volatility, but it remains an open question how the Microstrageys of the world will fair in down turns.

“It’s too early to tell what the SEC will do with public companies investing in cryptocurrency, but traditionally, the regulators lag in rulemaking and policy in novel areas of innovation,” Braden Perry, a former Commodity Futures Trading Commission trial attorney, told Blockworks. “Still, such a public move with relatively notorious companies will undoubtedly affect the market, as seen in the price fluctuations recently.”

Perry flags Tesla using a 10K filing, a formal annual comprehensive filing, to disclose its bitcoin holdings as a potential issue. MicroStrategy used an 8K, a specialized announcement for updates on material events. But the jury is still out. 

“Most of these companies are doing an excellent job of disclosing the risks of buying bitcoin,” John Stark, a former SEC enforcement attorney said to Blockworks in an interview. “Investors aren’t being duped here insofar that they are being fraudulently misled.

Stark, who has written extensively about why companies shouldn’t turn their treasury departments into profit centers via bitcoin buys, is concerned about the relationship between Saylor and Musk’s evangelism of bitcoin and their respective holdings.

There’s nothing illegal about it, Stark stressed, but he’s concerned that it’s going to divorce the companies from their fundamentals and see them devolve into objects for momentum trading and nothing more. 

Sidharth Sogani, founder of Singapore-based research firm Crebaco, said that at the end of the day this is simply a good investment for these companies. 

“These are visionary entrepreneurs and they all have clearly understood the value of Bitcoin,” he told Blockworks. “MicroStrategy made a great move, they have already made good money on their investment, now even if the prices drop, they have enough time to exit.”

This guide explains how to buy Bitcoin from anywhere in the world and connect you to payment options. In this article, you will learn how to buy Bitcoins with a service that allows you to invest in Bitcoins with sterling.

There are several options to buy Bitcoins and dollars on exchanges, but if you want to buy Bitcoin or other cryptocurrencies on the Exchange you choose, you have several platforms to choose from. You can also buy Bitcoins or other cryptocurrencies at any of your choice exchanges, such as Coinbase, Bitfinex, Mt. Gox and others.

Another way to buy Bitcoin and US dollars is to choose a platform that accepts bank transfers and deposits. By linking your bank account to your wallet, you can buy or sell Bitcoins and deposit money directly into your account. You can also use nairaex.com, a popular platform for buying Bitcoins by bank transfer and buying coins with a debit card or Paga.

You can also send Bitcoins to anyone who has Bitcoins in their wallet, receive Bitcoin money, and send them to other users. AbRA users can buy Bitcoins through the app, convert other assets into Bitcoins via Abras and then transfer them into an external Bitcoin wallet. You can use the AbaRra app to send Bitcoins to other Areas users and use it to buy Bitcoins, convert other assets into Bitcoins and convert them into AbrA ™ and then transfer them to external Bitcoin wallets.

If you want to buy Bitcoin in the US, you must first verify your identity on most exchanges. If you prefer to keep your Bitcoin transactions anonymous and not have the hassle of banking problems, or if you happen to live in another city, direct trading with a local seller would be an easy way to buy Bitcoins.

Most exchanges accept credit and debit cards, and these are generally the fastest way to buy Bitcoins. Once you have checked your ID, you can buy Bitcoins with a credit card or any other payment method.

Of course, buying bitcoins is fast and usually cheap, and you can buy them quickly and conveniently, but credit card providers earn money from currency spreads and fees. Bitcoins can be purchased with credit cards, debit cards or other payment methods as long as they are within the Bitcoin ecosystem, referring to the network of bitcoin exchanges, purses, exchanges and other exchanges worldwide. 

That’s all you need to know about buying bitcoin and other cryptocurrencies with your iPhone. The easiest way to buy Bitcoin on the iPhone using the Coinbase app (or cash app) is probably the easiest of them all. Just download the Coinbase app and you can start buying and trading bitcoin.

Buying Bitcoin directly from Coinbase is as easy as buying something from Amazon, but Coinbase makes it much easier and more convenient than Amazon. You can buy and sell Bitcoins directly on Coinbase, which makes it incredibly easy to use, and you can also buy Bitcoin daily, making Coinbase one of the most popular Bitcoin exchanges in the world.

For 1 euro, it is possible to buy a whole BTC, but you don’t need to buy it with a credit card. You can also buy Bitcoins from other Bitcoin owners, just like an item on Craigslist. Some ATMs allow you to buy only Bitcoins, while others allow you to sell your Bitcoins and get cash in return.

If the price of a Bitcoin is $20,000 and The Bitcoin buyer has only 10 dollars to send or invest, the user can buy 10 Bitcoins. This means you can buy an entire Bitcoin, not just a BTC or even a single Bitcoin. Once you have bitcoin, you could buy a tablet-like Nano that stores bitcoin offline, away from hackers.

If you want to buy Bitcoin, it is strongly recommended that the Bitcoins you buy are not stored in the Exchange once purchased, but in a wallet created by the buyer. When you buy Bitcoins on most exchanges, you have the option to transfer your coins into a Bitcoin wallet. Once you have your wallet, you can buy Bitcoins on the Bitcoin exchanges through a bitcoin exchange that you interact with, such as Coinbase or Bitfinex.

If you are serious about buying and using Bitcoin, you may want to get your own BTC wallet, which you control and sit offline on a USB stick. When you buy your first Bitcoins or any other cryptocurrency, you should consider moving your money to a more secure wallet that is only yours to control.

It’s a bit like Bitcoin, but you’re transferring your holdings digitally, not digitally. The process of buying Bitcoins through PayPal is the same as buying them with a credit card. You need a credit card or bank account to make the payment and you transfer money from your wallet to your PayPal account.

This guide explains how to buy bitcoin and how to finally buy your first bitcoin or start investing today. We have gathered information from over 300 cryptocurrency exchanges worldwide and created a quick guide to help you choose the best cryptocurrency exchange and a list of the best places to buy Bitcoins.

The first step is to choose a wallet or exchange provider, so we’ve chosen a place where you can buy and store your Bitcoins. If you have a Bitcoin wallet, you must exchange your bank account details before you choose another exchange, and if you choose another exchange, your credit card information.

By linking your bank account to your wallet, you can buy or sell Bitcoins and deposit money directly into your account. Once you have linked your bank account to your wallet, you can sell or buy Bitcoins or deposit the money directly into your account and keep it in a safe place.

However, buying Bitcoins through PayPal also has a downside: you can’t send them to others or move them into your wallet.

After setting up your Bitcoin wallet, you can go directly to a machine that functions essentially like a normal ATM. This machine allows users to buy and sell Bitcoins anonymously, but the potential problem is that you have to find the machine that does what you want, and the machines that do it are rare.

Bitcoins can be exchanged for cash, withdrawn or used to buy and sell Bitcoins. None of the best-known bitcoin exchanges on the market is currently, so I went through the process of buying bitcoins from the majority of the other companies mentioned on this list.

If you prefer to keep your Bitcoin transactions anonymous and not deal with banking problems, or if you happen to live in another city, direct trading with a local seller would be the easiest way to buy Bitcoins. To buy Bitcoin with cash on LocalBitcoins, you must travel to the seller and send the money. 

Another option is to buy Bitcoins directly from the seller, who is likely to pay much more commission than elsewhere. Some ATMs allow you to buy only Bitcoins, while others allow you to sell your Bitcoins and get cash in return.

More experienced investors should consider this option, as it involves buying Bitcoins directly from a dedicated cryptocurrency exchange. Bitcoins can be exchanged for another cryptocurrency, BTC, which is equivalent to buying BTC. If the Exchange does not allow you to purchase BTC by bank transfer or credit card, you can pay BTC into the Exchange.

If you’re interested in buying bitcoin just to understand how it works, check out Coinbase Pro. While Coinbase alone allows you to buy and sell Bitcoin, it is important to log in to Coinbase before linking to the exchange platform, which gives you greater control over your purchases. Use your Coinbase account without logging in first and use it to log in first.

The price of Bitcoin is constantly changing, so your goal should be to buy Bitcoin at the cheapest price. But if you want to use this, you first need to know how to buy bitcoin and what to do with it if you have it.

This last step is the easiest, as you can link your Bitcoin wallet to the Bitcoin exchange of your choice and decide how much Bitcoin you want to buy. Since this is your first Bitcoin purchase, choose an amount that will not affect you if it falls to zero.

When you decide where to buy your Bitcoin, you pay a conversion fee that you must consider all currency things. If you transfer your Gbp to a stock exchange that trades only in US dollars, you will be charged conversion fees. 

It is quicker and usually cheaper to buy Bitcoin using a payment method such as a cash app or cell phone. P2P exchanges facilitate this type of transaction, as is the case with the private purchase of Bitcoin by another person (LocalBitcoins).

Anyone buying Bitcoins from a Bitcoin ATM or privately buying them remains anonymous. If you bought Bitcoin in cash, the Bitcoin ecosystem, known as the “Bitcoin ecosystem,” works much like the real world. 

If you buy Bitcoin on an online exchange, you can purchase Bitcoin through a standard broker account. It is easy and safe to buy and trade bitcoin and other cryptocurrencies from the Exchange you choose and connect to payment options. If you bought Bitcoin in cash, it is easier and safer because you would buy Bitcoin with the credit card or bank transfer. You can also buy or exchange Bitcoin (or other cryptocurrencies) from any exchange as long as you are connected to a payment option. Your choice of Exchange: Choose an exchange or connect to any payment option.

As Bitcoin and other cryptocurrencies gain more legitimacy, now may be the time to evaluate their potential role in a diversified portfolio. Much of this will be determined by your own individual goals and risk tolerance, but you may be surprised to learn how far Bitcoin has come in a relatively short time frame.

Due to factors like infancy and massive price swings, cryptocurrencies are generally more volatile than stocks. For example, stocks on the S&P 500 are generally more stable than Bitcoin and other cryptos. But something investors have to consider is how risk-averse they are, compared to how much growth they are seeking.

That being said, there’s no denying Bitcoin’s growth compared to traditional stocks. The digital asset outperformed all but two S&P 500 companies in 2020. In other words, Bitcoin was a better investment compared to over 95% of stocks in the S&P 500 in 2020. Plus, when you look at Bitcoin’s growth compared to the growth of the S&P 500 as a whole from April to December 2020, it’s clear that they grew at entirely different rates. The chart below shows Bitcoin (blue) and the S&P 500 (yellow) across the latter half of 2020.

Image source: Yahoo Finance

Even so, those who invested in Ethereum saw an increase of over 430% from April 2020 to the end of the year, eclipsing its technological predecessor, Bitcoin. One of the top 10 cryptocurrencies by market cap, Litecoin, has more than doubled in price as well. Of course, all of this isn’t to say cryptocurrencies are guaranteed to only increase in price. More so, cryptocurrencies like Bitcoin can exist alongside the stock market and even improve upon it with a higher potential for growth.

Conversely, while Bitcoin is used as a currency, Ethereum can be seen as a strong store of value. It’s a platform that can be used to benefit supply chains or for investors to trade gold and other physical assets without hassle and with less volatility. To invest in Ethereum is to enable another side of the blockchain industry. Again, the utility is there, and it’s finally being recognized, especially when it comes to Ethereum 2.0.

There are thousands of other cryptos to invest in as well. Some projects target lending and borrowing, while others allow you to earn interest on crypto. However, before investing in anything, it’s important to understand and believe in the project’s mission.

If you’re looking to profit in the long-term, you can consider crypto as an important part of your retirement account. While crypto investments can be speculative, expert price predictions point toward Bitcoin reaching well over $100,000 within a year. A Bitcoin IRA also allows you to invest tax-free or tax-deferred, to help make sure you keep more of your capital gains. Plus, our new Bitcoin IRA Earn program allows investors to earn up to 6% APY on their assets, including Bitcoin, Ethereum, and cash.

Recommended article: How Bitcoin is Revolutionizing Investing and Retirement

Since the beginning of 2021, Bitcoin has attracted a lot of interest from multiple mainstream investors. It has captivated billionaire Elon Musk and hedge-fund moguls such as Alan Howard and Paul Tudor Jones among others across the globe. Apart from its skyrocketing price, the cryptocurrency has also gained support of major banks.

Despite that, Bitcoin's volatility, high value and the fact that it's not backed by a financial institution makes it a complicated investment. So, what should investors consider while investing in the cryptocurrency? For starters, people can invest in the cryptocurrency without holding coins themselves. In other words, they can invest in firms that hold bitcoins.

How safe is it to invest in stocks of bitcoin-related companies?

Investing in such companies is a much safer and easier option compared to investing directly in bitcoin. Such investments can be done through a financial institution's brokerage account, which gives the investor some security and ease of use, and offers some protection from losses. For any account related queries, investors can contact managers of brokerage accounts. The investor can set or change passwords, or gather documents for filing taxes — none of which is possible if a person is holding bitcoin directly.

Such investments may still not shield an investor from bitcoin's volatility. There are many firms that have added bitcoin to their balance sheet or accept the cryptocurrency as payment. People can also invest in publicly traded companies that have technology related to trading bitcoin or use blockchain.

Moreover, whenever the value of bitcoin surges, like the recent rally, it doesn't mean that stocks of bitcoin-related companies would see a similar spike. For example, bitcoin-mining device maker Canaan posted four straight quarters of losses last year over a period when bitcoin rose by about 30 percent. The sales of the company, which makes chips and equipment used in miners, dropped in June and September quarters last year.

So, no matter, what you do — purchase bitcoins directly or invest in a stock — perform an in-depth study before buying and invest an amount that you can afford to lose.

Who's joined the bitcoin bandwagon?

Recently, companies such as Tesla and MicroStrategy have directly invested in bitcoin. In fact, the cryptocurrency has grabbed a lot of mainstream attention after Tesla announced on February 8 that the electric carmaker had invested $1.5 billion in Bitcoin and would begin accepting payments for its cars and other products with the cryptocurrency in the near future.

MicroStrategy, an enterprise software company, said it planned to sell $600 million in convertible debt and use the proceeds to buy bitcoin.

There are firms such as Square and Paypal where people can make payments in bitcoin. Some of the bigger names, such as Microsoft, IBM, Google, SAP and Amazon, use blockchain in different parts of their business.

For example, an investor can buy stocks of firms that make graphics processing units, required for computers to solve math equations for blockchain technologies, or invest in funds having exposure to cryptocurrencies and blockchain technology such as Ark Next Generation Internet exchange-traded fund.

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Bitcoin prices have been on a steady incline since March last year after the token plunged to lows not seen since 2019. But the real bull run kicked off in October when BTC skyrocketed from about £8,686.74 ($12,000) on October 20 to £2,1716.85 ($30,000) in January this year. And it seems as though the bitcoin rally is not over just yet thanks to newfound interest from the likes of SpaceX and Tesla chief Elon Musk.

Earlier this week it was announced Tesla had bought more than £1billion ($1.5billion) worth of bitcoin to diversify its investment portfolio.

The company also said it would begin to accept bitcoin as payment for its products.

The news was welcomed by crypto traders across the board and pumped more value into the token.

On Tuesday, BTC prices smashed through another record, breaking past the £34,800 ($48,000) mark on the crypto markets.

READ MORE: Bitcoin mystery: 20k cryptocurrency mining machines shipped to Russia

Paolo Ardonino CTO of Bitfinex on Bitcoin, said on Tuesday bitcoin edging closer to £36,205 ($50,000) will lead to more corporations eyeing up the cryptoasset.

He said: "All the stars may be aligning for bitcoin as mainstream adoption happens in real-time.

"Rather than succumb to FOMO, those new to the space should take the time to educate themselves about this amazing technology rather than seeking to speculate on it.

"Always do your own research and never trade with resources you are not prepared to lose entirely.

"Meanwhile, attention is turning towards who will be next to jump on the bitcoin train as the space evolves at a breakneck pace."

Before you think about buying bitcoin or any other cryptocurrency, it is best to consider the risks involved.

Although BTC was conceived as a means of decentralising and digitising money for the future, bitcoin is prone to very volatile swings on the markets.

The Financial Conduct Authority (FCA) warned in January this year investing into cryptoassets is risky business.

The FCA said: "If you buy cryptoassets, you should be prepared to lose all your money."

However, if you are positive you want to own some bitcoin - or fractions of a bitcoin - here is what you have to do.

Before you sign up with a crypto exchange or online brokerage that trades bitcoin, you will want to find a safe and secure crypto wallet.

Crypto wallets can be online, physical or even pieces of paper you carry around with you.

A paper wallet, for instance, is a piece of paper on which you have written down private and public keys, which you can generate on certain websites.

The private key is your most important key and you should never share it with anyone as it grants you access to your token.

Your public key, meanwhile, allows people to send you bitcoins, so it is safe to share with others.

Another option is a hardware wallet, which is often a USB stick-like object that stores your private keys offline.

All BTC transactions are carried out using a technology called blockchain - a decentralised ledger that records all transaction - and the keys grant access to bitcoin on the blockchain.

Websites like Investopedia can guide you through the process of selecting what is best for you, so read up before making any decisions.

Once you have a secure wallet, you will want to sign up with a crypto exchange or service that trades cryptocurrencies.

Popular choices include Coinbase, Kraken or eToro.

Take a moment to read about what each service offers and find the one that suits your needs best.

You will then want to sign up for a profile with details such as your full name, your birth of date and address.

Some exchanges might ask you to upload documents to verify your identity before you are allowed to trade.

After that is sorted out, the next step is deposit funds into your account - many exchanges have a minimum amount of money you need to deposit if you want to trade.

The next step is to search for bitcoin or BTC on the exchange.

BTC will appear with its current price and you will want to click on Buy.

Select how many tokens you want to buy, or how much money you want to put into the trade - you can buy fractions of a bitcoin - and complete the transaction.

As soon as BTC appears in your portfolio, you will want to transfer the tokens directly to your wallet for safekeeping.

Remember to never share your private key with anyone.

The same applies to any other crypto you might buy, such as ethereum or ripple.

Research has shown that most millennials and under 18s are more interested in Bitcoin than any other demographic cohort. In fact, most successful Bitcoin entrepreneurs started trading at less than 18 years old. However, due to regulatory concerns, most crypto exchanges have made it hard for underage to buy Bitcoin. This is in compliance with government compliance policies about knowing your customer (KYC).

However, there are many ways an underage person can buy Bitcoin without getting into trouble with the law. This guide details everything you need to know about how you can invest in Bitcoin even before you’re over 18 years.

If you’ve been wondering how you can buy Bitcoin as a minor, here are some of the ways to do so without breaking the law.

We currently have over 4,000 Bitcoin ATMs globally, a number that swelled in the last couple of years and grows by day. Albeit the hefty transactions charge, ATMs can be a safe way for minors to buy and sell Bitcoin. With an ATM, you aren’t required to verify your account unless you exceed a certain threshold.

You only need to find an ATM near you – have a look at the ATMradar site for that. If you want to go above the allowed threshold per ATM, then you’d have to hop from one machine to another. This way, you can buy or sell a few Bitcoins in one ATM then complete the other transaction in another one.

If you don’t have a Bitcoin ATM near you, keep reading, there are more options for an underage to buy and sell bitcoin.

Decentralized exchanges match buyers and sellers anonymously, unlike peer to peer marketplaces that require you to go through KYC. Bisq, HodlHodl and Localcryptos.com are good examples of decentralized exchanges that minors can take advantage of to buy Bitcoin.

Decentralized exchanges allow traders to buy and sell their preferred cryptocurrency on their terms. You don’t require any verification to transact. However, it’s advisable to do due diligence and only invest what you’re willing to lose.

Understandably, as a minor, you may want to buy Bitcoin but cannot afford to buy them. If you have skills such as software development, web development, web design, video editing, content writing, or virtual assistance, you can earn Bitcoins for putting those skills to work.

There are many new crypto-focused freelance websites that have facilitated their users to send and receive payments in cryptocurrency. Some of these websites have even gone ahead to offer safe Bitcoin escrow services to ensure people transact honestly.

All you have to do is place your gig on one of these sites or apply to job posts by people looking for certain services. With such freelance sites, you can make a lot of crypto money without worrying about your age and breaking the law.

Here are some of the websites that match service providers with clients who pay in Bitcoin.

This is a blockchain-focused jobs board by Anthony Pompliano, the popular crypto evangelist and partner at Morgan Creek Digital. Pompliano – known simply as “Pomp” in the crypto world – is planning to leverage his large audience to bring companies and job candidates together in a talent marketplace.

For now, most of the job postings on this board require a high level skills so you might need to wait a little bit until it expands and starts adding mid and low level job offerings.

You can always post your job offering in one of the Facebook crypto groups (or regular job seeking groups, gig groups etc where you note that payment should be in crypto). There are often job postings as well by employers looking for a freelancer.

With CryptoJobs, you’re assured of so many opportunities posted daily on the job board from sales, to marketing gigs, you’ll find them all. The job board has remote jobs and those specified for certain locations. The payments are then made in Bitcoin.

The platform allows service providers to create accounts and advertise services such as web development or software engineering. Employers looking for your services will contact you and offer you a job. Besides receiving payment in cryptocurrency, the platform also has a multi-signature escrow service to protect users from scams.  

BitGigs is a platform where clients and service providers can post their job offerings. If you offer technical skills like web development or content creation, you can rest assured of gigs. This way, you can fill your e-wallet with lots of Bitcoin even before you get to 18 years.

You don’t have to buy Bitcoin from an exchange. You can try the OTC method. If you’re underage, the over the counter method will favor you because you don’t need any verification. All you have to do is look for a reliable Bitcoin broker and trade.

The good thing with most crypto brokers is that they won’t be keen on knowing your age or nationality as long as they can make a quick sale and cash in some profit. You can find brokers online through Facebook forums, Reddit, or other peer to peer groups.

When dealing with online brokers, it’s paramount to do some due diligence to avoid getting scammed. You can first check some reviews regarding the broker from the forums you find these brokers before transacting.

All isn’t lost if you’re not of legal age to buy or sell Bitcoin. But did you know that you can ask your older siblings, parents, or guardian to help you with the process? You may fear that they won’t support the idea of investing in Bitcoin at a young age, but you’ll be surprised at how supportive they can be. Every parent or sibling is happy to see a young person thinking of investing rather than waste money on other stuff.

Using your sibling or parent to create an account is an easier method to bypass all the compliance laws put in place. However, if they don’t understand how Bitcoin or any other cryptocurrency works, you may have difficulty convincing them. It’s worth trying all the same.

Whether young or old, anyone can buy a gift card. There are many options from the iTunes gift cards, Amazon, and Google Play gift cards. For this method, you only need to buy your preferred gift card, then head over to Paxful and exchange the gift cards for Bitcoin. Buying gift cards is a great method for minors to acquire cryptocurrency because at no point will you have to answer questions regarding your age.

Amazingly, some exchanges are so lenient and don’t ask for verification to create an account or even trade with them. Some of these platforms are discussed below. This is tricky as you would still need a credit card from someone in order to buy crypto on these exchanges. DON’T USE YOUR PARENTS CC WITHOUT THEIR KNOWLEDGE! However, if you do have their consent, Kucoin (for US users) and Binance (non-US) are a great place to go and quickly grab some bitcoins.

KuCoin doesn’t have strict KYC regulations for users that buy and trade small amounts of crypto. You can create an account hassle-free and even start trading your Bitcoin for other altcoins. Register on KuCoin here.

Just like KuCoin, you simply need to create an account, and your set to start buying your first Bitcoin. With Binance, you can also trade your Bitcoin for other digital currencies because the choices are endless.

However, the trading threshold without any verification is at 2 Bitcoins a day. If you need to withdraw more than 2, you’ll have to fill in the KYC forms. Why would an underage person need to withdraw more than 2 BTC in a day?

Register on Binance now.

You don’t have to be of legal age to buy or even trade Bitcoin. You can own cryptocurrency even as young as 13 years without getting into trouble. This guide details everything you need to know regarding how old you need to be to buy Bitcoin.

Rene Peters is editor-in-chief of CaptainAltcoin and is responsible for editorial planning and business development. After his training as an accountant, he studied diplomacy and economics and held various positions in one of the management consultancies and in couple of digital marketing agencies. He is particularly interested in the long-term implications of blockchain technology for politics, society and the economy.

Shares of Tesla (NASDAQ: TSLA) are trading over 7% higher in February after attracting attention of the crypto community following the purchase of $1.5 billion in Bitcoin.

Tesla also announced it will start accepting crypto payments, according to the carmaker’s filing with the U.S. Securities and Exchange Commission (SEC). The electric vehicle (EV) manufacturer said it bought the top cryptocurrency to ensure flexibility and maximize cash returns. 

This way, Tesla has become the first major carmaker to introduce crypto payments. 

Muddy Waters Research founder Carson Block said he doesn’t believe the U.S. government will curb Elon Musk’s plans.

“The SEC just does not have a record of success against Elon Musk so I expect any effort in that direction to go, it would just be a dead end basically,” Block said.

Wedbush managing director Dan Ives said the introduction of crypto payments represents a positive sign for Tesla’s stock. 

“This is Tesla and Musk diving into the deep end of the pool on crypto and it’s something that’s been rumored for a while, and ultimately now this is really them putting substance behind his view. I think it’s something the Street will have a differing view of, but ultimately … this is definitely going to be viewed as a positive for the stock,” Ives said.

Mohamed El-Erian, head economic advisor at Allianz, said the reactions to Tesla’s latest move will be different but he emphasized that Tesla sees Bitcoin as both means of payment and an investment vehicle.

Toyota stock price is trading over 7% higher in February as it continues its impressive bullish run. Shares have closed higher every month since October with February on the right path to continue this streak. 

Still, the valuation of Tesla shares looks very high. The price action broke below an aggressive ascending trend line while the ongoing consolidation near highs takes the form of a triangle. A bearish break may result in a deeper pullback to 38.2% Fibonacci retracement – where buyers wait to buy TSLA.

EV company Tesla said it has bought $1.5 billion of Bitcoin and that it will allow cryptocurrency payments, according to the company’s filing with the SEC.  

There is no investment hotter than Bitcoin right now as investors are buying cryptocurrencies to hedge against inflation and use them as a store of value, over precious metals. While the most popular cryptocurrency Bitcoin traded below $4,000 at the onset of the COVID-19 in March last year, the digital currency had hit an all-time high of $58,330.57 over the weekend to reach a $1 trillion market cap. However, the cryptocurrency tumbled as the working week began.

In recent weeks, Bitcoin received a boost by large strategic investments in it by companies like TSLA, Mastercard ( MA ), Bank of New York Mellon, and MicroStrategy ( MSTR ). Given the rapid pace of digitization, investors were enamored by the growth prospects and potential of the crypto space. This has sparked increased interest from players in different industries in expanding into Bitcoin mining operations.

Treasury Secretary Janet Yellen issued a warning on Monday that bitcoin is an “extremely inefficient” way to conduct monetary transactions and the dangers that it poses both to investors and the public. Following this warning, the expected excessive regulation on cryptocurrencies might have added to the selling pressure.

Ebang International Holdings Inc. (EBON)

EBON is a blockchain technology company that manufactures and sells Bitcoin mining machines and telecommunication products in the People’s Republic of China, the United States, Hong Kong, and internationally. With strong application-specific integrated circuit (ASIC) chip design capability, EBON is a leading mining machine producer in the global market with steady access to wafer foundry capacity.

In the first six months of 2020, EBON sold 0.25 million Thash/s of total computing power, representing a year-over-year decrease of 86% from the comparable period in the prior year. Total net revenues during the period were US$11.04 million, falling 50.6% year-over-year. However, operating losses narrowed to $8.68 million from the year-ago loss of $27.47 million. Additionally, the company reported a loss of $0.06 per share, compared to the year-ago loss of $0.16 per share.

EBON is setting itself up for multiple revenue streams. However, the company is not making profits yet and its current valuations are not justified. In terms of trailing-twelve-month EV/Sales, EBON is currently trading at 17.18x, 259% higher than the industry average of 4.78x. In terms of the trailing-twelve-month P/S ratio as well, EBON is trading significantly higher than the industry average (12.65x vs 4.50x).

EBON’s move to enter into the mining business will contribute to its top-line and optimize its product offering structure. It will help the company’s transformation from a hardware manufacturer to a blockchain company with comprehensive involvements in its industry chain. However, Bitcoin mining is profitable as long as Bitcoin prices show strength. A high price movement will drive demand for EBON’s mining products. Hence, in line with the Bitcoin correction, the stock lost nearly 24% yesterday intraday to close the session at $8.41 with a year-to-date gain of 38.6%.

EBON’s POWR Ratings reflect this bleak outlook. The stock has an overall rating of D which translates to Sell in our POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.

EBON has a grade of D for both Stability and Quality. It is ranked #36 of 43 stocks in the Technology – Electronics industry.

In total, we rate EBON on eight different levels. In addition to the POWR Ratings grades I’ve just highlighted, you can see the EBON’s ratings for Growth, Value, Momentum, and Sentiment here.

CleanSpark, Inc. (CLSK)

CLSK provides energy software and control technology solutions worldwide. It offers distributed energy systems and microgrids that allow customers to manage renewable energy generation, storage, and consumption. CLSK entered into the Bitcoin business with the acquisition of ATL Data Centers, a Mining as a Service (MaaS) company in December 2020.

CLSK has been targeted by short-sellers in recent weeks, with Culper Research accusing the company of fraudulent reports. According to the lawsuit’s allegations, CLSK has “fabricated key elements of its business, including purported customers and contract figures.” The company is also “rife with undisclosed related party transactions” concerning its February 2020 acquisition of p2k Labs, Inc. The Culper Research report shocked the market and shares of CLSK fell by approximately 9.2% on the report’s publication date last month.

CLSK has recently issued a 60-day post-acquisition update on its Bitcoin mining operations. The company pointed out that it has continued to procure and deploy mining equipment as part of its strategic growth initiative. It expects to have more than 315 PH/s of Bitcoin mining capacity deployed by the end of this month, representing a greater than 65% increase in capacity.

In its fiscal first quarter ended December 31, 2020, CLSK reported $2.25 million in revenues, surging 130% year-over-year. Strong service, software, and digital currency mining revenue drove the growth, and the Bitcoin mining segment generated $0.73 million, 32% of the total revenue. However, loss from operations doubled and CLSK reported a loss of $0.32 per share.

CLSK witnessed a massive run-up over the past year. The stock has returned a whopping 837% over this period. As a result, the stock is being perceived as severely overvalued by traditional measures. In terms of forward P/E, CLSK is currently trading at 279.31x, 751.7% higher than the industry average of 32.80x. In terms of trailing-twelve-month P/S also, CLSK’s 44.60x is significantly higher than the industry average of 4.50x. However, the stock 17.4% yesterday intraday to close the trading session at $29.98.

CLSK’s weak fundamentals are reflected in its POWR Ratings. The stock has an overall rating of F which translates to a Strong Sell in our POWR Ratings system. CLSK has a grade of F for both Value and Stability. In the D-rated, 108-stock Software – Application industry, it is ranked #103.

Beyond what we stated above, we also have given CLSK grades for Growth, Momentum, Sentiment, and Quality. Get all the CLSK ratings here.

The9 Limited (NCTY)

NCTY is an internet company that operates and develops online games in the People’s Republic of China. The company offers online games, including CrossFire New Mobile Game and Audition, and also provides technical consulting services. NCTY has recently stepped into blockchain-related business and aims to become a diversified high-tech internet company.

Earlier this month, NCTY signed another MOU with six unrelated Bitcoin mining machine owners to purchase Bitcoin mining machines by the issuance of its ordinary shares. This batch of mining machines includes different brands with a total number of 10,489 units and a total hash rate of approximately 251PH/S. Additionally, on February 16, NCTY signed a $10 million framework agreement mining equipment for Filecoin mining. Furthermore, the company acquired 70% equity in Hangzhou SuanLi Technology, a cryptocurrency cloud mining blockchain software-as-a-service company, yesterday in a $7 million deal.

In line with this series of developments, the stock is up a whopping 2,204.2% so far this year and we believe this run has been overdone. In terms of trailing-twelve-month EV/Sales, NCTY is currently trading at 9,502.27x, 327,624.5% higher than the industry average of 2.90x. In terms of the trailing-twelve-month P/S ratio as well, NCTY is trading significantly higher than the industry average (4,291.58x vs 1.82x).

The recent news does reflect NCTY’s potential to emerge as a solid player in the crypto space. However, the company has been venturing into other industries to stay afloat. NCTY entered into the electric vehicle manufacturing market in 2019 and now into Bitcoins when its core video gaming segment has been struggling for a while. The recent run has helped the company fare as it was facing the possibility of being delisted last year for not meeting the continued listing requirement of minimum Market Value of Listed Securities. However, with such valuations, it’s wise for investors to be skeptical.

It’s no surprise that NCTY has an overall rating of D which equates to Sell in our POWR Ratings system. NCTY also has a grade of D for Value and a C for Stability. In the D-rated, 86-stock China industry, it is ranked #68.

Click here to see the additional POWR Ratings for NCTY (Growth, Momentum, Sentiment, and Quality).

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EBON shares were trading at $7.25 per share on Tuesday morning, down $1.16 (-13.79%). Year-to-date, EBON has gained 19.44%, versus a 3.02% rise in the benchmark S&P 500 index during the same period.

Sidharath’s passion for the markets and his love of words guided him to becoming a financial journalist. He began his career as an Equity Analyst, researching stocks and preparing in-depth research reports. Sidharath is currently pursuing the CFA program to deepen his knowledge of financial anlaysis and investment strategies. More...

Feb. 12 (UPI) -- After Tesla announced it has invested $1.5 billion in bitcoin and expects to start accepting the cryptocurrency as a payment for its electric vehicles in the near future, the bitcoin price went soaring. It went from around $39,400 to an all-time high of over $48,000 in less than 24 hours.

Bitcoin price

The prospect of a blue-chip invasion into bitcoin has caused much excitement among cryptocurrency investors. But if Tesla does trigger such a gold rush, there will also be some unsettling consequences.

Volatility spillover

Tesla justified this material change in the way it manages its treasury reserves by stating that investing in bitcoin will "provide us with more flexibility to further diversify and maximize returns on our cash." Corporate treasurers have always used the money markets to invest surplus cash to eke out small yields, and it is harder than it used to be in the current long-term low-interest rate environment.

All the same, this is very different to standard money management. Bitcoin is a highly volatile asset that you would not typically associate with the cash reserves on the balance sheet of a listed company worth close to a trillion U.S. dollars. As recently as March, the price dipped below $4,000. Even in 2021, the price fell more than 30% before its most recent surge.

FOMO-ing at the mouth?

Such a rise would drive up the value of the bitcoin on corporate balance sheets to multiples of what it was at the time of investment. Tesla's 8% allocation may already have gone up to 12% of the value of its reserves, for instance. And if it follows through on a potential plan to keep any bitcoins it receives for electric cars instead of converting them into dollars, that percentage could rise all the faster.

The problem is the potential effect on company share prices. Tesla's share price rose 2% on the news of the bitcoin investment, though it has since fallen by 5%. But a longer term example is Canadian tech company Microstrategy. Its share price has ballooned tenfold in value in the past year on the back of a heavy investment into bitcoin, but is also down by almost a quarter in the days since the Tesla announcement.

Writ large, this could make stock markets far choppier in future -- and vulnerable to a nosedive when the bitcoin bull market ends. It would be easy to imagine that this could prompt a wider wave of selling as investors sought to cover their loss-making positions, which could be very dangerous for financial stability.

The regulators

The view from the U.S. Securities and Exchange Commission will be extremely important, and it is difficult to predict the response of newly appointed head Gary Gensler, who is himself a crypto expert. We may see anything from a wait-and-see approach through to a ban on listed companies holding any bitcoin-like assets.

But I would expect that if the price of bitcoin continues toward $100,000, there may be a regulatory restriction on the reserve percentage that listed companies can hold in digital assets. This would be similar to the U.S. rule that companies cannot buy back more than 25% of the average daily volume of their own stock. Such a rule would force companies to sell bitcoin if a price increase meant their holdings broke the maximum level, creating a form of sell pressure that the crypto market has not seen before.

Gavin Brown is an associate professor in financial technology at the University of Liverpool.

This article is republished from The Conversation under a Creative Commons license. Read the original article.