Taking Advantage of Bitcoin: ETF VS. Sole Ownership

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photo of a gold coin with the Bitcoin logo on it

The Rise of Bitcoin

The SEC’s approval of Bitcoin exchange-traded funds or ETFs catapulted Bitcoin’s meteoric rise to begin 2024. This included touching an all-time high price point of nearly $74,000, surpassing the Swiss Franc as the world’s 13th largest currency, and overtaking silver to become the second-largest ETF Commodity, behind gold. While the market’s volatility means the price of Bitcoin fluctuates (it is just over $61,000 at the time of writing), this is not an uncommon occurrence as Bitcoin approaches its quadrennial reward halving.  Prior Bitcoin halving occurrences have seen similar retreats in price for a period of time, followed by prolonged bull market runs so the majority of analysts remain bullish on its future and that Bitcoin is primed for continued success.

These are sure-fire signs that Bitcoin is gaining credibility in the financial markets and is becoming recognized by institutional and retail investors as a formidable investment option. This could also open the door for other cryptocurrencies ETFs, with discussions and pending approvals in the works for an Ether (ETH) ETF.

Investor Options

While ETFs deserve a lot of the credit for Bitcoin’s recent appreciation in value , it needs to be noted that they are not the only option for investors.

The advantage of holding Bitcoin outright compared to gold and silver is that it is easier to procure and, unlike high-value tangible assets, simple to store. So, while Gold and Silver ETFs make investing in those commodities streamlined, without the burden of transferring and storing the actual physical asset, most investors don’t need a BTC ETF to have access to Bitcoin.

The Advantage of Crypto Trading Platforms

Crypto trading platforms allow businesses and individuals alike to open custody accounts allowing them to have full ownership and control of their Bitcoin and other cryptocurrencies they choose to buy and sell. In addition to the Bitcoin being your own, platforms have transparent protections and compliance regulations, as well as 24/7 trading capabilities.  

At sFOX, the users of our trading platform have bankruptcy protection through sFOX Safe, our custody offering that is a Wyoming Division of Banking regulated Trust Company.  Client assets are clearly segregated from firm assets, and  in the unlikely event of bankruptcy, client assets are protected 100% in a US state regulated entity. 

Wyoming’s embrace of digital assets has helped to create clear guidelines through which companies can understand and adhere to standards rather than operate in the gray area where so much crypto regulation lives. Their comprehensive digital asset classification, bank involvement in custodial services, clear guidelines for digital asset custody, and consumer protection and transparency are why sFOX has such a robust and compliant platform. This lets our customers rest easy, knowing their digital assets are safe.

Single Venue vs. Multi Venue Platforms

Often, certain coins are purchased directly from a single-use platform, which offers limited features and services beyond buying and selling a single coin or multiple coins, like Bitcoin.

Prime services such as sFOX offer more comprehensive features and services that go beyond just buying and selling. These features include advanced trading options, portfolio management tools, and institutional-grade security features.

Furthermore, prime services usually have access to multiple liquidity sources from various exchanges and liquidity providers, leading to faster order execution and better pricing than single venue platforms which often have lower or single-stream liquidity.

While both single venue platforms and prime services have security measures in place, prime services will often have a more robust security infrastructure because they handle larger volumes of transactions and assets.

The larger volumes and assets often lead to more comprehensive customer support as well because dedicated account managers are needed for high-volume traders and more extensive online resources are needed to help manage and service such accounts.

Another issue is fees. Prime services such as sFOX often have transparent fee structures. These include trading fees and withdrawal fees. Some platforms also offer lower fees for high-volume traders.

Conclusion

Understanding the difference between single venue platforms and multi-trading platforms is paramount, especially depending on your needs. While single platforms are simple and convenient for buying a single coin such as Bitcoin, a prime service like sfox.com will have a broader range of features and services. Prime services offer broader options and protections if you are an experienced trader, an institutional investor or want to diversify your digital assets. 

Now is a great time to be involved in Crypto. ETFs offer many the opportunity to invest, but why not own the BTC (Bitcoin) outright.  Trading platforms allow for greater autonomy. In choosing, take the time to understand how each is regulated, keep up to date with new regulations and how they are being implemented, and always take great care to understand the protections you are offered.

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