With the creation of two bitcoin futures products and an epic increase in price, lots of traders are wondering how to buy bitcoin stock, or buy a bitcoin ETF.
This makes sense for a couple of reasons. Although futures are a great investment instrument, they are certainly not for everyone. Futures offer a lot of leverage and some investors prefer to just stick with stocks and ETFs. So how do you buy bitcoin stock?
- Purchasing bitcoin with US dollars on an unregulated cryptocurrency exchange is risky
- GBTC is the main instrument that gives investors exposure to bitcoin’s price movements
- GBTC trades on the OTC market (Open Transparent Connected)
- Ally Invest is the best broker to trade GBTC (commission free for 90 days)
How to Buy Bitcoin Stock
The first thing you need to do before you buy bitcoin stock is to open an account with Ally Invest. They are the cheapest and best online broker for buying bitcoin derivatives.
Once you open your Ally Invest trading account and take advantage of their free trades for 90 days, you’ll be ready to trade after you fund your account.
Wire transfers are the fastest way to fund a new account, and if you call your bank or other brokerage and ask them to waive the $25 outgoing wire fee, they will usually do it. It’s surprising what you can get merely by asking. At The Options Bro, we ask for wire fees to be waived, solely as a courtesy, all the time – and it usually happens.
Once you log in to your account and navigate to the trading tab, your screen will look like this:
In the “QUOTE” box, type “GBTC”. This is the ticker symbol for the Grayscale Bitcoin Investment Trust. GBTC owns 170,000 bitcoins with 1,868,700 shares outstanding. This means, by purchasing 1 share of GBTC, you’re buying 0.09196847 bitcoins.
The next steps to buy bitcoins stock are as follows:
- Decide the amount of shares of GBTC you want to purchase. In this example, we selected 1 share
- Decide the order type. The most common order types are market and limit.
- Click ‘Preview Order” and double check that everything looks right.
- Boom! You’ve now synthetically purchased bitcoin without having to signup for a Coinbase account or crypto wallet
Bitcoin Stock (GBTC) Specifications
Investment Objective: shares track bitcoin’s market price
Assets Under Management: $1.694B
Annual Fee: 2%
Shares Outstanding: 1,868,700
Bitcoin Per Share: 0.09196847
Why Buying Bitcoin Stock (Investment Trust) Is still a Good Option
As noted earlier, although we prefer trading futures whenever possible, trading bitcoin by trading the Grayscale Bitcoin Investment Trust (GBTC) is still an excellent option to gain exposure to the cryptocurrency. A lot of investors want to own bitcoin, but they just don’t know how to buy bitcoin stock.
And buying bitcoin stock, which is effectively what you’re doing when you purchase GBTC, with Ally Invest is one of the best deals in town. Even if you don’t qualify for the 90 days of FREE trades with the deposit of $10,000, $3.95 for all stock and ETF trades is lower than just about every other online brokerage. Why pay more with TD Ameritrade or Charles Schwab?
Also, Ally Invest’s web-based trading platform is extremely easy to use and very robust with its advanced analytics and charting capabilities. We’re also excited about the future for bitcoin and ETFs, because several new filings have been made with the SEC to launch short and long bitcoin ETFs, as opposed to investment trusts, which is what GBTC is.