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Author: Admin | 2025-04-28
And decentralized record of transactions. The core innovation of blockchain technology is focused on the fidelity and security of a record of data while minimizing trust amongst participants.6. How can bitcoin fit in an investment portfolio?6. How can bitcoin fit in an investment portfolio?While investors should ultimately consult with a financial professional to determine if an investment in bitcoin aligns with their investment goals, there are several factors to consider. Bitcoin has had periods of significant outperformance relative to major asset classes since its inception, but it has come with significant volatility.4 Investors with a higher risk tolerance may be inclined to allocate more of their portfolio to bitcoin. Every investor’s situation and goals are unique, which emphasizes the need to consult a financial professional.7. Why should I get exposure to bitcoin via an ETP?7. Why should I get exposure to bitcoin via an ETP?Bitcoin exchange-traded products (ETPs) help alleviate some of the challenges of investing directly in bitcoin, such as storage. Traditional forms of investing directly in bitcoin require deciding where to store the purchased bitcoin, which can be in a crypto wallet or on a crypto exchange. This approach gives the investor certain direct responsibilities in preventing security risks such as theft or loss of private keys, which are essentially passcodes to a crypto wallet. With a bitcoin ETP, investors own shares of the ETP, removing the need to determine where to store their bitcoin, as this is handled by the ETP's custodian. It's important to note, however, that investing in a bitcoin ETP still involves a high degree of risk, including possible loss of principal.8. Do I have to pay taxes on bitcoin?8. Do I have to pay taxes on bitcoin?Bitcoin is subject to the same tax laws as property. The IRS requires reporting of each bitcoin transaction, which is subject to capital gains tax.5 Investors should consult a tax or financial professional for more information on how they may be impacted by bitcoin tax laws.
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