Freetrade is an online brokerage firm with over one million users registered in England and Wales.
Currently, Freetrade does not allow investors to buy cryptocurrencies, such as Bitcoin, Dogecoin, Ethereum, Shiba Inu, Ripple, Stellar, Litecoin, or any altcoin cryptocurrencies.
In this article, you will find out how you can gain indirect exposure to cryptocurrencies through the financial instruments offered by Freetrade and discover alternatives if you want to own real cryptos.
Can you buy Crypto on Freetrade?
As we’ve mentioned, you cannot buy cryptocurrencies directly on Freetrade.
As of this writing, it does not seem like Freetrade will offer the service in the near future. The company does not include cryptocurrencies in their roadmap and considering their opinion on the subject, it does not look like you will be able to purchase cryptocurrencies in their app any time soon.
However, it is possible to gain indirect exposure by investing in shares or investment trusts correlated with the crypto industry.
Crypto-related stocks available on Freetrade
Freetrade offers a few crypto-related stocks, whose prices typically correlate with bitcoin and other cryptocurrencies:
Argo Blockchain plc (ARB)
Argo Blockchain, a company based in the United Kingdom, is one of the world leaders in cryptocurrency mining. Their shares tend to follow market tendencies similar to Bitcoin’s, offering an indirect exposure to the crypto market.
Bit Digital Inc (BTBT)
Bit Digital Inc is a bitcoin mining company trying to commit to the sustainability issues brought by bitcoin mining. Their stocks also tend to move in the same direction as Bitcoin.
BIT Mining Ltd (ADR) (BTCM)
BIT Mining Ltd (ADR) (BTCM) is a cryptocurrency mining enterprise whose sole purpose is to mine bitcoin.
Marathon Digital Holdings Inc. (MARA)
Marathon Digital Holdings Inc. (MARA) is a digital asset technology company that mines cryptocurrencies, selling the generated assets to make a profit.
Coinbase Global Inc (COIN)
As one of the biggest crypto exchanges globally, the shares of Coinbase are closely related to the crypto market.
Core Scientific Inc (CORZ)
Core Scientific Inc (CORZ) offers blockchain infrastructure services to its clients, including developing and distributing blockchain and AI infrastructure and digital assets self-mining services. Purchasing the shares of this company offers a smaller exposure to the cryptocurrencies market than buying stocks of crypto mining companies.
Besides buying crypto stocks, you can also get exposure to cryptocurrencies by buying shares of companies that invest in the crypto market.
Tesla and other companies whose stocks are listed on Freetrade invest in cryptocurrencies. Block Inc (formerly Square, Inc) and Microstrategy CI A are just a few examples of companies that have notably invested in cryptocurrencies in recent years. Although the exposure to cryptocurrencies is smaller than the one acquired when buying crypto stocks, the prices of these stocks are certainly affected by the crypto market.
Freetrade Alternatives for Real Exposure to Cryptocurrencies
If you really want to trade or own cryptocurrencies, then Freetrade crypto is not the right choice for you. Here are some alternatives you may want to consider:
eToro is a commission-free broker and the leading social trading platform. It supports over 45 cryptocurrencies and has many other products such as stocks and ETFs. Cryptocurrency trading costs 1%, and this fee is charged on top of the Bid-Ask spread market price for both buy and sell trades.
Disclaimer: 78% of retail CFD accounts lose money.
Coinbase is one of the biggest crypto exchanges in the world, with over 80 million users. It offers a wide range of different digital currencies.
Although Crypto.com may be slightly less user-friendly than the other options, it offers over 250 crypto assets, NFTs, high yield savings accounts, and a prepaid Visa card, allowing you to easily use your money invested in cryptocurrencies day-to-day and even earn cash back or other rewards.
The world’s largest exchange by trade volume, Binance offers trading in excess of 300 cryptos (including Dogecoin, Ripple, Stellar, and so on). The user count reaches more than 28 million worldwide.
Crypto ownership vs indirect Crypto exposure through Crypto stocks
Gaining exposure to cryptocurrencies without directly owning them may have advantages and disadvantages.
Under certain jurisdictions, investing in crypto stocks allows you to be protected by Investor Protection Schemes, which will compensate you as an investor if the investment firm goes out of business. This is not a direct advantage of the financial instrument itself, as it relates to the regulated institution providing the instrument (the broker, or investment platform). But it certainly reassures investors who want to invest in crypto stocks.
On the other hand, if you don’t own the cryptocurrencies, you will not be able to use services that exist for these assets, such as decentralised finance platforms, peer-to-peer transactions, etc. Stocks are also limited to inherent limitations of stock exchanges, such as working hours: if you are trading cryptocurrencies directly, you can also trade the assets whenever you want, but investors can only trade stocks during trading hours.
We have addressed a few of the advantages and disadvantages of investing directly and indirectly in crypto. But finding out if you should get direct or indirect exposure to crypto is not easy. Many factors must be considered, including your objectives, risk appetite, experience, the liquidity of the markets, fees, and other factors.
It is important to note that this text does not constitute any financial investment advice. It was written for informational purposes only. It is up to you to pursue your own individualized investigation and discover which types of products better suit your situation.
We hope the article helped you reach a decision, and we wish you good luck with your investments!