Today in the MENA region, countries are going through a period of change. OPEC recently cut oil production, thus increasing the price of oil.
Countries like Iran, which has been under sanctions for decades, are opening up to international investors and looking to modernize their economies.
And with so much opportunity existing here, money managers worldwide are welcoming this new challenge by using innovative products such as Exchange Traded Funds (ETF) and Exchange Traded Notes (ETN).
These financial instruments allow clients to invest in multiple assets simultaneously without buying each asset separately.
It means that an ETF/ETN product can hold stocks, bonds, commodities or other assets within it and therefore offers diversity very quickly.
It also presents an excellent option for money managers as they can buy and hold a range of assets and not pay management fees on each one.
The best crypto ETF available in MENA
Bitcoin Investment Trust
The first ETF to be offered globally that invests exclusively in cryptocurrencies was the Bitcoin Investment Trust (GBTC).
This product launched in 2015 and has been traded publicly since May 2015 under the ticker GBTC on OTC Markets.
Counter exchanges such as OTC Markets provide less rigorous listing requirements than significant stock exchanges like NASDAQ – meaning companies listed here do not need audited financial statements – which is why we avoid it.
ETFs vs ETN
The difference is that ETFs represent an undivided share in a pool of assets like stocks or commodities.
In contrast, ETNs are senior unsecured debt notes issued by financial institutions that promise an index’s return with fewer fees.
There are balances of contrary forces for both types of investment vehicles.
However, for someone looking to invest directly into digital currencies such as Bitcoin or Ethereum, there is no better option than the Grayscale Bitcoin Investment Trust (GBTC).
It is a relatively safe way to invest in the cryptocurrency market as it’s a publicly tradable financial product.
Grayscale also offers two other products which give you exposure to alternative cryptocurrencies such as Ethereum and Litecoin.
The GratexEther Trust (GET) and Grate bitcoin Trust (LGT) is used.
However, their fees are very high at 2% and 4%, respectively, and therefore we do not recommend these instruments for someone looking to gain exposure quickly to digital currencies.
As for the best cryptocurrency ETFs in the mean, we can’t say for sure as new products are coming out every day, and the market is still very young.
However, if you were looking to invest in a digital currency such as Bitcoin or Ethereum, the Grayscale Bitcoin Investment Trust (GBTC) is easily the best instrument available today.
This type of instrument could be the future of asset allocation because you can get instant diversification within a single product that can trade like any other security such as stocks or commodities.
The idea would be to invest in ETFs/ETNs related to digital currencies. It will provide you with great diversification benefits reducing your overall risks when investing since these products track an entire asset class.
This type of investment is a new phenomenon in the financial industry, and therefore it remains to be seen how regulators will deal with this type of product in the future.
At present, they are considered legal, but there has been some controversy surrounding them because many people do not necessarily see digital currencies as an actual asset class when compared to stocks or bonds, for example.
Investing directly in cryptocurrencies
Many analysts have warned that investing directly in cryptocurrencies such as Bitcoin is very risky due to their volatility and lack of regulation.
In addition, professional investors also shy away from these instruments because it’s still unclear whether they fall under the category of a security or commodity.
The GBTC is a publicly tradable instrument on Oasis.
It gives investors access to bitcoin through a traditional security vehicle, making it easy and secure to gain exposure without worrying about buying and securely storing them.
Regarding cryptocurrency ETFs, the market is very young, and many new products are coming out every day.
Link to crypto trading for more information.