If you were one of the 112.3 million viewers of the Super Bowl on Sunday, you more than likely saw at least one of the four crypto related commercials. While some voted Larry David’s “Don’t Miss Out” commercial for FTX as the “best” commercial, others were left confused by the estimated $14 million Coinbase spent to have their signature “C” bounce around your TV screen for a 60 seconds. Either way, people were left talking about cryptocurrency between plays.

Nearly a year ago, with a keen sense that the conversation around crypto was not going to be short-lived, we launched our series “Understanding the Crypto Craze” to help you better navigate all of the noise surrounding digital currencies.

Our first installment titled “A Beginner’s Guide to Bitcoin” gave you just that, a beginner’s understanding of the most well-known digital currency. We answered the common questions, including:

  • What is Bitcoin?
  • How does it work?
  • How is it secured?
  • What is the technology behind it?
  • What is Bitcoin mining?
  • Who controls it?
  • Is it regulated/legal?
  • What is the relationship to the US dollar?
  • Pros/cons

We then moved onto another popular digital currency, Ethereum, in “Ethereum Part 1: An Introduction.” Assuming you had a basic understanding of digital currencies/Bitcoin and how it worked after our initial installment in this series, we were able to focus on the principles of Ethereum that differentiate itself from Bitcoin, such as:

  • Decentralization through “Turning Complete” language
  • Smart Contracts

Our most recent installment focused on Bitcoin ETFs in “Understanding Bitcoin ETFs,” which were recently approved by the SEC. A Bitcoin ETF allows you to gain exposure to Bitcoin without owning any underlying Bitcoin. There are many complex ideas and terms you should know in order to fully understand what a Bitcoin ETF is, including:

  • Relationship of Bitcoin ETFs to Bitcoin
  • Futures contracts
  • Derivatives
  • Futures vs. spot pricing
  • Tracking error
  • Pros/cons

How We Can Help

It seems clearer than ever that digital currencies and the hype surrounding them is here to stay. We will continue to examine the developments in cryptocurrencies and the best way to invest in this emerging asset class. Stay tuned for our next installment which will dive deeper into Ethereum.

As with any investment, it is important to weigh the risk against the potential returns. If you are interested in finding out if investing in a bitcoin ETF or cryptocurrency is right for you, or if you would simply like to learn more, contact us online or at 410-685-9685.