At the highest of US$63,000 in 2021, Bitcoin has been one of the top-performing asset class this year. As the first cryptocurrency to be created, the blockchain technology behind it has since spun off a whole plethora of cryptocurrencies including Ethereum, Dogecoin and Singapore own’s umbrage coin.
With the most recent announcements on Chinese regulators clamping down on bitcoin and Elon Musk reversing his stance on bitcoin due to its environmental impacts, bitcoin has since erased most of its 2021 gains and is currently hovering at around US$40,000. Regardless, bitcoin has established itself as a new form of investment with increasing institutional and public acceptance. In April 2021, Coinbase was the first cryptocurrency exchange platform to be listed on NASDAQ via Initial Public Offering and its capitalisation is larger than NASDAQ holding company. In Singapore, DBS has also launched its own digital exchange platform for accredited investors.
For those of us who did not get in on the bitcoin wave earlier and are considering taking a stake, do note that Bitcoin remains a highly volatile asset. Being clear of how much exposure we would want to take on from bitcoin can help prevent unnecessary losses. Investment in bitcoin does not need to be a significant sum and we can purchase a portion of the coin or invest in it indirectly through similar investment assets.
Here are five ways to invest in bitcoin with $100 in Singapore.
Read Also: The Behavioral Economics of Bitcoin
#1 Purchase Directly From Bitcoin Exchange Platform
Compared to the nascent period of bitcoin where it was worth less than a cent, the price for a single coin right now is almost as expensive as the cheapest car in Singapore. Regardless, interested buyers can purchase a portion of a coin by the unit of “Satoshi”, from a cryptocurrency platform. The entry amount for purchasing a Satoshi off a platform can be as low as a dollar.
We can purchase bitcoin from cryptocurrencies platform. As new bitcoin investors, we would want to use that allows for Singapore dollars to crypto conversion instead of crypto to crypto conversion. These platforms include Coinbase, Binance, Gemini or CoinHako. Coins purchased from platforms are usually stored in our exchange wallets which exposes us to a certain level of platform risk. The most recent case of a platform security compromise is Roll which involves a total of US$5.7 million losses. Investors can use more established platforms or those with larger exposure can consider investing in a cold wallet to store their bitcoins offline.
#2 Bitcoin ATM
Interestingly, in Singapore, it is possible to purchase bitcoin directly from an ATM. There are currently three main operators, Deodi, CoinUnited and Daenerys. Based on Coin ATM Radar there are a total of 10 bitcoin ATMs where we can purchase and withdraw Bitcoin.
Before going to the nearest bitcoin ATM, the purchase process would require us to set up our own private wallet first. Additionally, we would need our phones with us to approve the transaction. The transaction fees charged on the ATM tend to be higher than platforms ranging from 4% to 10% of the transaction value compared to the 1% to 2% fees for cryptocurrency platforms. Regardless, we can start purchasing bitcoin from these ATMs for as low as $50.
#3 Buy Bitcoin Directly From Peer-to-Peer Exchanges
Other than exchange platforms, it is possible for Singaporeans to purchase bitcoins from a Peer-to-Peer (P2P) exchange platform. In Singapore, we can use localbitcoin. The amount we can purchase depends on the limits the traders on the platform are willing to trade at. Regardless, it is possible to purchase coins on the platform for $100.
P2P carries its own risk as we would be dealing directly with the other trader. Bitcoin scams have been on the rise and trading directly with another person can involve such risk. Therefore, it is important to take note of the credibility of the user before starting a trade.
#4 Stocks That Have Significant Bitcoin Exposure
If we are investing in bitcoin to enjoy the returns, it is also possible to enjoy similar growths through purchasing stocks with bitcoin exposure. As mentioned earlier, Coinbase is a publicly-traded company on NASDAQ. With over 96% of their trades based on Bitcoin and Ethereum, Coinbase profitability closely correlated to the price and the trade activity of Bitcoin.
Another company we can look at is MicroStrategy. With a holding of over 92,000 bitcoin, Microstrategy has an existing policy to acquire bitcoin periodically as part of their corporate treasury policy.
Most local stock brokerage accounts allow us to invest in the US markets. We can also look at online stock brokerages platforms such as FSMOne, moomoo, Tiger Brokers, Interactive Brokers, Saxo Capital Markets and others that can offer competitive rates for purchasing US-based stocks.
#5 ETFs With Significant Bitcoin Exposure
Lastly, we can also consider investing in index funds that allow us to enjoy diversification together with the potential growths of Bitcoin. Currently, there are two main exchange-traded funds with bitcoin exposure, they are ARK Next Generation Internet ETF and GrayScale Bitcoin Trust.
GrayScale Bitcoin Trust currently holds 649,130 bitcoin and it acts as a tool for investors to trade on bitcoin without the hassle of owning one. Investors should also note that ARK Next Generation Internet ETF bitcoin exposure is based on owning a portion of GrayScale Bitcoin Trust.
Apart from investing in bitcoin, those who are interested in trading on bitcoin’s derivatives can do so on platforms such as Saxo Capital Trading and IG. Bitcoin as an asset remains volatile with different types of investors joining into the asset for various reasons. Whether you believe in the technology behind Bitcoin, its potential to be the new currency or would like to get in on the momentum, we can start small to mitigate our risk.
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