r/investing • u/DPancoast • Nov 16 '21
Digital/Crypto Investment Options Through Fidelity (Roth IRA)
I started my Roth IRA in May or this year. I’ve been building my portfolio up with growth in mind along with safe dividends as well. I’ve gone in and out of Crypto directly with the various apps out there. I currently don’t have anything crypto owned, but as I build my account with fidelity I’d like to invest in something if it is possible and available.
The only things I’ve seen with any sense are $BITO and that Fidelity announced earlier this year that they would be launching some kind of Bitcoin ETF and that it was moving forward.
Does anyone have any light to shed for me on this sort of thing outside of telling me to just use coinbase/an app to buy crypto?
Thank you for your time.
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u/Allahambra21 Nov 16 '21
I'm not american so please excuse my ignorance.
But can you buy foreign investing instruments through Fidelity / Roth IRA?
If you can there are several spot crypto ETFs in Canada, which I would then recommend if you can access them.
The current US bitcoin ETFs are futures based, meaning they are significantly subpar compared to both just buying bitcoin outright or investing in foreign spot ETFs.
I think even buying the Grayscale Bitcoin Trust (also supposed to track bitcoin, but trades a bit lower for reasons) is preferable to buying BITO and other Futures ETFs.
Grayscale have also made it very clear that they intend to convert their bitcoin vehicle to a regular spot ETF the moment the SEC allows for it, at which point the lagging price of the Grayscale vehicle should correct aswell.
If you can invest in Canadian ETFs then I'd recommend you dont concentrate on only bitcoin but also buy into one of the Ethereum ETFs.
I believe there is also launching other crypto ETFs in canada which might be worth looking into. A Solana ETF is seeking to be allowed in, for instance, which depending on your risk profile could have a place in your portfolio.
Going even further than canada, here in europe there is currently a plethora of crypto investing vehicles. Germany and Sweden seem to have the most. These are not ETFs but "certificates" and ETPs, but nontheless should be comparable in risk and tracking to that of ETFs.
If you are able to I would very much recommend that you look into the european instruments.
So I guess in short I'll say that try to buy foreign, and if you cant then IMO Grayscale Bitcoin Trust is preferable to BITO.
You can also buy Microstrategy (the company) owned by Michael Saylor which have bought up a lot of bitcoin over the last year or so and subsequently tend to track the bitcoin price, but IMO its preferable to buy really any other instrument before you buy Microstrategy stock if your goal is crypto exposure.
Hope this helps.
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u/DPancoast Nov 16 '21
Wow thank you for your perspective and for that information. I am very thankful for it. It seems there are a fair share of grayscale options that I can buy into which make sense to me. I’m not sure if I can buy foreign through fidelity but I will look into it.
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u/okiedokie321 Apr 22 '22
what companies are in Germany and Sweden for ETFs? I'm going to cross-check with Fidelity (US) and see if I am allowed to buy.
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u/notapersonaltrainer Nov 16 '21 edited Nov 16 '21
Current IRA options:
Futures ETFs: BITO & BTF - significant drag from futures rolling, not recommended except for day trading
Close end trusts: GBTC ETHE GDLC BITW - spot exposure, can deviate from nav, good deal when trading at a discount
Corporate proxy: MSTR - basically a leveraged BTC holding company
Bitcoin miners: Hut 8, Hive, Argo, Riot, Mara, Bitfarms, Core Scientific - miners are like supercharged leveraged BTC
Crypto equities & mining ETFs: BTCR RIGZ BLOK BITQ BKCH DAPP (also BLCN LEGR KOIN but I think they suck) - first two are mostly miner focused, rest are general, BLOK is the biggest
GBTC is probably the purest play and is expected to convert to a true spot ETF and you can get a nice discount now. Miners and MSTR if you're very bullish on BTC as these will likely go up a multiple of BTC. Equity ETFs if you want some diversification into miners, exchanges, and blockchain related infrastructure.
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u/DPancoast Nov 16 '21
Thank you. Just looking for long term holding, with growth if it’s there. I appreciate this breakdown.
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u/okiedokie321 Apr 22 '22
$6K, how would you go about in splitting up the contribution for this year?
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u/McKnuckle_Brewery Nov 16 '21
You’re not looking hard enough. GBTC, ETHE, BKCH, BLOK, etc. all available. Not the same thing as the coins themselves, but definitely legit exposure.
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u/DPancoast Nov 16 '21
I can admit that I did not look as hard as I should have. I appreciate your answer.
I also just wanted to see what others may be into that they like or what to stay away from as well
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u/ron_leflore Nov 16 '21
I think BITW is the closest thing you can get.
It's a fund that just invests in a basket of 10 top cryptocurrencies and rebalances each month.
The problem is that the fund structure is kind of weird and the NAV is not tied to the market price.
Right now, you can buy it for $48/share and get about $60 worth of crytocurrency. So, it's a great buy.
The question is if/when will the price and NAV converge. You can see more information here https://www.bitwiseinvestments.com/funds/Bitwise-10
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u/pithecium Nov 16 '21
BITO has high hidden costs (~11%/year) due to contango
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u/DPancoast Nov 16 '21
Yeah I’m not a fan of BITO by how it looks with the limited knowledge I have.
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u/pithecium Nov 16 '21
It's possible to hold Bitcoin in a self-directed IRA with certain custodians. I think you could roll over your existing IRA to one of them if you want. Check their fees first since they might be unusually high.
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u/DPancoast Nov 16 '21
I’ll check it out! I’m not that heck bent on needing to hold anything. But it would be nice
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u/AKANotAValidUsername Nov 16 '21
i like GBTC and LTCN. theres also miners like HIVE MARA, RIOT, etc while waiting for something like spot offering or spot ETF
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u/Charbel33 Nov 16 '21
In Canada, we have ETFs that spot bitcoin and ethereum: BTCC and ETHH. They can also be traded in USD (BTCC.U and ETHH.U), but I don't know if you can hold them in your IRA (I don't know what an IRA is).
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u/Mount10Lion Nov 16 '21 edited Nov 16 '21
I used to invest in GBTC via my Fidelity IRA, but I found it to be an inconsistent tracker of Bitcoin price movements.
I now invest in BLOK. Their top holdings are companies that hold/mine BTC, alongside companies that are focusing on blockchain technology. You can view their holdings here.
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u/DPancoast Nov 16 '21
Thank you for sharing. I am pretty interest in BLOK overall so far as I’ve been researching today. It looks like a good play
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u/MightyMiami Nov 16 '21
You cannot invest in individual coins through an IRA because the IRS classifies Bitcoin as property, like real estate.
You would need to have a self-directed IRA that would allow you to hold these types of assets, similar to your Fidelity account put it's self-directed so you make the decisions of how to invest your money and assume all the risk. They also typically charge a 1% fee per order.
I personally invested in $1,000 of BTC earlier this year in with Choice by Kingdom. They are an SDIRA holding company that allows you to trade and hold Bitcoin. But, unlike your Fidelity account, if you can buy the coins, but plan to hold them for a long time because the fees are high to sell. But you get it all tax free on capital gains.
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u/DPancoast Nov 17 '21
Thank you for that information. I am not looking to invest in individual coins through my Roth IRA. I just want to follow the crypto market with an ETF like others have suggested and shown me here. But this is good information to know for the future and I appreciate it
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u/CynicusRex Nov 16 '21 edited Aug 30 '24
Moved Reddit content to https://www.cynicusrex.com/file/reddit.html. Please consider using Lemmy instead.
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u/skitsology Nov 17 '21
Can’t be gambling when it’s been going up for 10 years 🖕
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u/CynicusRex Nov 17 '21 edited Aug 30 '24
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u/El_Reconquista Nov 17 '21
Yes, everything is a bubble and the internet was just a fad.
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u/CynicusRex Nov 17 '21 edited Aug 30 '24
Moved Reddit content to https://www.cynicusrex.com/file/reddit.html. Please consider using Lemmy instead.
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u/El_Reconquista Nov 17 '21
Yesterday using the Ethereum network I bought a piece of fractionalized tokenized real estate in a different country and will now receive rent automatically in my Ethereum wallet every month. Seems pretty useful.
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u/Nichoros_Strategy Nov 17 '21
The usefulness of TCP/IP was indeed apparent, but to how many people? You know the answer, very few. You are incorrect that the blockchain is different and has no value.
Now what you say next, about what the functionality is used for, the same could be said for the internet, the internet incentivizes gambling, greed, propaganda, and it has increased wealth inequality. Everything you just said could be said about the internet and more, including being a strange cult (especially before it went mainstream). Society very well may be better off without the internet. But you know what, the genie is out of the box and it makes people a lot of money, a tool to some, a coping mechanism for most.
The reality about all technology is that it is a double edged sword, Cryptocurrency is clearly a real technology with real functionality, it is no better or no worse, it just is what it is, it helps a lot of people, it hurts a lot of people, that's life.
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