Key Takeaways
- • Crypto exposure for U.S. investors takes three distinct forms: direct ownership of digital assets, shares in publicly listed crypto-related companies, and funds or exchange-traded products, each carrying different risks.
- • Shares of crypto-related companies do not confer direct crypto ownership and can move independently of crypto prices.
- • Direct holders face custody risk, where a compromised arrangement can permanently cut off access to assets, along with tax considerations.
- • Historical month-level examples illustrate extreme volatility: Bitcoin fell from about $69,000 in November 2021 to about $17,500 in June 2022, and Ether from $4,867 to $880 over the same period.
- • The SEC's Office of Investor Education and Advocacy warned in a March 23, 2023 investor alert that the risk of loss for individual crypto investors remains significant.
Summary
According to TokenPost, crypto exposure is not a single investment. U.S. investors can hold digital assets directly, buy shares in publicly listed crypto-related companies, or use funds and exchange-traded products. Each route carries distinct risks, and the form of exposure determines what an investor actually owns.
Buying shares in a company does not give the shareholder direct ownership of crypto, and those shares can move independently of crypto prices. Funds and exchange-traded products differ in structure and obligations, and their prospectuses are the primary source of product-specific details.
Investors holding crypto directly face custody considerations, since a compromised custody arrangement can permanently cut off access to assets. Taxation is a further consideration for crypto buyers.
The article cites rounded, month-level historical prices to illustrate volatility. Bitcoin was about $7,000 in March 2020, about $69,000 in November 2021 and about $17,500 in June 2022. Ether was about $120 in March 2020, $4,867 in November 2021 and $880 in June 2022. The article notes these figures are not precise market closes or indications of future prices.
Citing a March 23, 2023 investor alert, the SEC's Office of Investor Education and Advocacy said the risk of loss for individual investors in crypto assets, including crypto asset securities, remains significant. The article concludes that whether crypto exposure fits a portfolio depends on an investor's goals and risk profile.
Buying shares in a company does not give the shareholder direct ownership of crypto, and those shares can move independently of crypto prices. Funds and exchange-traded products differ in structure and obligations, and their prospectuses are the primary source of product-specific details.
Investors holding crypto directly face custody considerations, since a compromised custody arrangement can permanently cut off access to assets. Taxation is a further consideration for crypto buyers.
The article cites rounded, month-level historical prices to illustrate volatility. Bitcoin was about $7,000 in March 2020, about $69,000 in November 2021 and about $17,500 in June 2022. Ether was about $120 in March 2020, $4,867 in November 2021 and $880 in June 2022. The article notes these figures are not precise market closes or indications of future prices.
Citing a March 23, 2023 investor alert, the SEC's Office of Investor Education and Advocacy said the risk of loss for individual investors in crypto assets, including crypto asset securities, remains significant. The article concludes that whether crypto exposure fits a portfolio depends on an investor's goals and risk profile.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.