Cryptocurrency has gone from a niche idea to a mainstream investment topic in just over a decade. With assets like Bitcoin and Ethereum now available through regulated ETFs on Australian exchanges, more investors are asking how crypto works, how risky it really is, and whether it belongs in a long-term portfolio.
This FAQ blog breaks down the basics of cryptocurrency, explains the difference between owning crypto directly and investing via ETFs like EBTC and EETH, and outlines how Australians can gain exposure in a simpler, more structured way.
It will cover
- General Cryptocurrency FAQs
- Bitcoin FAQs
- Ethereum FAQs
- Crypto ETF FAQs
General FAQs
Q: What is cryptocurrency?
A: Cryptocurrency is a form of digital or virtual currency that uses cryptography for security. Unlike traditional money, cryptocurrencies like Bitcoin (EBTC) and Ethereum (EETH) operate on decentralised blockchain networks without central bank control.
Q: Is cryptocurrency safe to invest in?
A: Cryptocurrency can be a volatile investment with periods of extreme highs quickly followed by deep drawdowns. While blockchain technology itself is secure, crypto markets are volatile. Investing directly into the asset can also require more detailed research, to avoid potential hacking or theft of the asset. Investors may wish to avoid the risk of owning and storing their own cryptocurrency by gaining exposure via regulated crypto ETFs on the ASX or Cboe.
Bitcoin FAQs
Q: What is Bitcoin?
A: Bitcoin is the first and most popular cryptocurrency, launched in 2009 by an anonymous creator, Satoshi Nakamoto. It is often referred to as “digital gold” due to its fixed supply of 21 million coins and its deemed role as a store of value. We have previously explored if Bitcoin could replace gold in an investors portfolio.
Q: How can I buy Bitcoin?
A: You can buy Bitcoin on major cryptocurrency exchanges like Coinbase, Binance, or Kraken. For traditional investors, Bitcoin ETFs such as EBTC allow exposure without directly buying Bitcoin.
Q: Why is Bitcoin valuable?
A: Bitcoin derives its value from scarcity, decentralisation, and global adoption as a hedge against inflation and traditional financial systems. Its limited supply makes it resistant to devaluation through inflation.
Ethereum FAQs
Q: What is Ethereum?
A: Ethereum is a blockchain platform that enables smart contracts and decentralised applications (dApps). It is the second-largest cryptocurrency by market capitalisation.
Q: What is Ethereum used for?
A: Ethereum powers decentralised finance (DeFi), non-fungible tokens (NFTs), Web3 applications, and smart contracts. ETH is also required to pay transaction fees (gas) on the Ethereum network.
Q: Is Ethereum better than Bitcoin?
A: Ethereum and Bitcoin serve different purposes. Bitcoin is mainly seen as a digital store of value, while Ethereum focuses on programmability and decentralised applications. Investors often hold both for diversification.
Crypto ETFs (EBTC & EETH) FAQs
Q: What is EBTC?
A: EBTC is a Bitcoin Exchange-Traded Fund that allows investors to gain exposure to Bitcoin through traditional stock exchanges, without needing to directly buy or store Bitcoin.
Q: What is EETH?
A: EETH is an Ethereum Exchange-Traded Fund designed to give investors exposure to Ethereum in a regulated, stock-market-traded product.
Q: What are the benefits of investing in EBTC or EETH ETFs?
A: ETFs hold a number of benefits when investing in cryptocurrency.
- They’re regulated investment vehicle
- No need for crypto wallets or private keys
- Easier access through traditional investment means (adding as a Stockspot theme – or purchasing via commsec)
- Potential tax efficiency compared to direct crypto ownership
Q: How are crypto ETFs like EBTC and EETH different from owning crypto directly?
A: With ETFs, you don’t hold actual Bitcoin or Ethereum. Instead, you hold shares that represent the price performance of the underlying cryptocurrency. This provides convenience and regulation but removes direct control over the assets.
Q: Are EBTC and EETH safe investments?
A: Like all investments, EBTC and EETH carry risks. While ETFs provide more regulation and security than direct crypto exchanges, their value still depends on the volatility of Bitcoin and Ethereum markets.
With volatile assets like cryptocurrency, it’s more important than ever for investors to regularly rebalance their portfolio to avoid allocation drift.
Q: How do I invest in EBTC or EETH?
A: If you’re a Stockspot client with an account balance of over $20,000 you can add EBTC and EETH as satellite investments via our Stockspot Cryptocurrency Theme. Alternatively EBTC or EETH can be accessed through a brokerage account, just like buying other ETFs. They trade on major stock exchanges, making them accessible to both retail and institutional investors.
