How can I invest in crypto?

“Is it better to interact directly with the blockchain, or buy through your investment platform?” This is a question investors commonly ask. 

There are essentially two main ways to own crypto, and the right choice usually depends on how much "homework" you’re willing to do. 

One pathway is direct ownership:

• This is the do-your-own-research approach. In the industry, we call this "self-custody." This is the "purest" form of crypto ownership. Think of it as having a pile of cash or gold under the mattress or in a safe. 
• It works like this: You hold a copy of the secret code yourself to access the safe. You have 100% control over the assets and can interact directly with the blockchain.
• But, there’s a trade off: With total control comes total responsibility. You are the security guard, the IT department, and the vault manager in a bank. It’s perfect if you’re tech-confident and want zero middlemen, but it means there’s no "forgot password" button if things go wrong.
  
  

The alternative is via exchange-traded products (ETPs) or exchange-traded funds (ETFs):

• Whether you have access to ETFs or ETPs depends on where you live. These products were designed to bridge the gap for investors who want the investment benefits of crypto without the technical headache.
• They work like this: The actual crypto is bought for you, and then stored for you with a qualified custodian like a bank. Your investment tracks the daily performance of the asset, but you don't have to worry about managing a digital wallet or losing your pin code.
• Upsides to using these products include accessibility: because they trade on major stock exchanges like the Nasdaq or the London Stock Exchange, you can buy them through your existing brokerage account or bank. Plus, depending on your region, you can often hold them in a tax-efficient retirement or savings account.

Think of it this way: direct ownership is for those who want to be the pilot, handling the technical controls and flight path themselves. ETFs and ETPs are for those who want to reach the same destination as a passenger – enjoying the journey through a familiar, regulated service while someone else handles the cockpit.

If you choose to go with ETPs or ETFs, look for what’s called “physically-backed” structures.

What this means is that the product you are buying actually holds the underlying crypto and is transparent about where they are stored. At 21shares all our products are 100% physically backed by the underlying crypto, and we use carefully vetted independent, and institutional grade custodians, and we have done so from the very beginning.