“You can invest as little as £10. One of the myths around bitcoin is that you have to buy one bitcoin and this is not the case.
“When buying through an exchange an investor can buy bits of a currency, for example one bitcoin is divided into 100mn units called satoshis – Satoshi being the [creator] of bitcoin. Each bitcoin is made up of 100mn satoshis, so you can buy a 100th millionth of a bitcoin.
“The risk is really the exchange, you need to choose a reputable one, as some of them have gone bust, like FTX. Coinbase, for example, is a listed exchange and because of that it is more trusted.”
Bitcoin-led technology
Advisers wanting to give their client’s some exposure to bitcoin, within the remit and security of regulation, may want to consider funds buying into the technology itself.
Munro says: “Digital assets and cryptocurrencies are only going to increase in value, the world is becoming more digitised and the technology behind bitcoin is being rolled out elsewhere.
“Blockchain technology, which is used to mine and verify bitcoin, is now being used to drive forward new technologies elsewhere,” she adds.
Cleary also expects to see more investor interest in the technology around digital assets.
He says: “We would expect such clients to also gain exposure to the sector through investing in new and innovative technologies which underpin, augment, or enhance the digital asset ecosystem.”
Companies that are exposed to cryptocurrency mining in the US include the graphics giant Nvidia, Tesla, or even Paypal.
Other companies, beyond finance, are also benefiting from the tokenisation and securitisation used to verify and build cryptocurrency; for example companies are working with the Land Registry to recreate everything the Land Registry holds on the blockchain.
Missing the point
There is also the argument that a spot cryptocurrency ETF misses the whole point of a decentralised digital currency.
Mona El Isa, chief executive of Avantgarde Finance, says that using old technology meant ETF issuers were undermining the digital currency’s purpose, although ultimately they may make themselves obsolete.
“It speaks to the language they understand. However, accessing ethereum through an ETF misses the core benefits of ethereum's decentralised and disintermediated design.
“I expect over time, as investors become more accustomed with cryptocurrency, they will want to hold ethereum non-custodially to leverage the full benefits of the technology: low cost, removal of counterparty risk, and instant ability to transact.”
Fraud and scams
Peter Wood, chief technical officer at Spectrum Search, says for now bitcoin and ethereum remain incredibly risky and are to be avoided.
“The landscape for cryptocurrencies is continually evolving, and unforeseen regulatory changes can adversely affect the market.
