Many people are curious about investing in bitcoin, but hesitant to open a crypto wallet or navigate the foreign landscape of digital exchanges. While cryptocurrencies are still relatively new and unproven over longer time horizons, there’s a third path that many investors might not even know is an option — investing in bitcoin without ever touching the coin itself.
Fidelity brokerage clients recently became the largest shareholders in Metaplanet (through National Financial Services LLC, a clearing and custody broker-dealer of Fidelity), a Tokyo investment firm. This shift may signal a growing trend where traditional finance companies make it easier for everyday investors to dip into crypto without diving all the way in.
Here is what bitcoin-interested investors should know.
Metaplanet has gained attention for its aggressive bitcoin-focused investment strategy. In many ways, Metaplanet is positioning itself as a bitcoin treasury company, with over 16,000 BTC, valued at roughly $1.6 billion. Its goal is to become one of the largest corporate holders of bitcoin in the world.
By buying Metaplanet shares through a Fidelity brokerage account, investors can benefit from bitcoin’s value without taking on big risk or forking out the huge costs of buying bitcoin directly.
Fidelity recently announced that not only was it dipping a toe into bitcoin investing, but it’d also become the largest shareholders of Metaplanet — holding nearly $820 million worth of shares.
This stake suggests that there’s growing interest from everyday investors in this kind of indirect bitcoin exposure and that more financial institutions may follow suit.
This exciting move marks a potential turning point where it may be about to get a whole lot easier to invest in bitcoin through existing brokerage or other investment accounts, rather than through complex crypto exchanges.
When investors buy shares of a company like Metaplanet — whose business model literally is structured around holding large amounts of bitcoin, you get what’s called “bitcoin proxy exposure.” This means you’re not directly buying bitcoin, but the value of your investments is affected by bitcoin’s price fluctuations. When bitcoin does well, your portfolio benefits, and vice versa.
The benefits of this include:
While this is all very exciting for anyone who has been interested in bitcoin, investments of this kind are not the same as owning bitcoin directly. And, since your investments are tied to bitcoin’s value, you’re still at some risk of price fluctuations. But for anyone who wants to just get an edge on bitcoin, it could be a good way to start.
The more notable takeaway from Fidelity’s move is that it may be the beginning of larger institutional adoption seen across the industry. This could bode well for cryptocurrency like bitcoin’s continuing rise in value.
While the decision to invest this way — benefiting from bitcoin without buying it directly may not be for everyone — it’s something you can now ask your financial advisor or portfolio manager. For others, it may make more sense to invest in bitcoin exchange traded funds (ETF) or blockchain investing. Your investing style needs to match your financial goals and your risk tolerance.
The good news is that you don’t need to be a crypto expert to invest this way, but you should always perform due diligence and consider all investing options.
