No fewer than 1.6 million Dutch people have invested money in cryptocurrencies. You can also consider investing in it, but prefer to do so without a special crypto broker like Bitvavo or Binance. Then you have to make an effort to get to know a separate app. Or you want to invest in bitcoin through your normal bank or broker because you then have your bonds, stocks and cryptocurrencies in one place. Whatever your reason, here you will find more options.
It must first be said that investing always involves risks – and investing in cryptocurrencies in particular, because the market is moving fast. Only invest with money you can afford to lose, and do not invest in a product you do not understand (and the concepts below can be difficult, as are the concepts in the crypto world). Furthermore, this article is not financial advice.
You can enter the crypto market through these traditional brokers
On the Bux Zero investment app, you can trade stocks, ETFs and about thirty different cryptocurrencies. Bux does not charge a transaction fee for market orders on cryptocurrencies (and is happy to promote it). According to Bux itself, they are special as crypto providers because they are supervised by the Dutch financial markets authority and are registered with De Nederlandsche Bank.
Online broker Trade Republic also plans to make crypto available on its platform, which currently mainly offers normal investments. Trade Republic aims to provide this service by the end of March 2022. This broker, which was originally German, first entered the Dutch market in late 2021.
Will you soon be able to buy bitcoin with ING, ABN Amro or Rabobank?
Teunis Brosens, crypto expert at ING, says that Dutch banks generally ‘look at the crypto field with interest’, but that the regulation must be in order before they can take action in it. ‘A bank has to ask itself a lot of questions before it starts – does it suit my customer, my business model, what are the reputational risks?’ You will probably not suddenly be able to buy Ethereum tomorrow from the major Dutch banks.
Investing in crypto via ETF and ETN: ‘crypto trackers’
However, there are opportunities to invest in crypto without directly owning crypto, and it is available from several brokers. Unlike cryptocurrencies, so-called ETFs and ETNs are traded on the ‘normal’ regulated exchange. ETFs and ETNs that follow the crypto market therefore allow you to invest indirectly in cryptocurrencies through a classic broker. You pay so-called fund costs for an ETF because the ETF publisher also wants to profit from it.
The four largest crypto tracker publishers are: VanEck, Coinshares, Wisdom Tree & 21Shares.
What are Crypto ETFs and ETNs?
ETF stands for Exchange Traded Fund and is described as a ‘basket’ with various investments. This is because an ETF is made to track a particular index with multiple investments, such as the AEX index. But the basket can contain everything: commodities, bonds and also cryptocurrencies.
Some crypto-ETFs do not contain cryptocurrencies directly, but cryptocurrency ‘futures’, special contracts that currently pay for the delivery of cryptocurrencies on a specific day in the future. Brosens explains that with such an ETF, one does not own a part of a cryptocurrency that is ‘in a box’ somewhere, but a part of a market that speculates on the crypto market. This entails additional risks and costs, says Brosens.
So-called Exchange Traded Notes (ETNs) are also intended to track a specific index, but are structured differently from ETFs. ETNs are debt securities, like bonds, but do not pay interest. With an ETN, you own a claim on the ETN issuer, not on any form of security (in this case cryptocurrency). According to Brosens, this makes an ETN more risky if something happens to the publisher.
Manipulation in the bitcoin market seeps through
Even if you trade through a ‘normal’ broker, if you invest in a bitcoin ETF, you get some of the manipulation in the bitcoin market, says Brosens. ‘You certainly do not completely rule out the influence of the unregulated part,’ he tells RTL.
If you own cryptocurrencies, it is important to report them to the IRS. Until now, the IRS could not check how much crypto you owned, so people often had to take the floor. But he will soon have the power to check how much you have.
Source: FD, RTL, DeGiro