6 Ways to Gain Bitcoin Exposure Without Buying Crypto Directly

Welcome to Financial Fluency - a newsletter designed to boost your understanding of financial terms and provide you with investment ideas for long-term financial success.

In today’s newsletter:

• A Look at the Markets: Bitcoin, 21Shares Bitcoin Core ETP & Coinbase

• 6 Ways to Gain Bitcoin Exposure Without Buying Crypto Directly

• Quote of the Day: Yassine Elmandjra, Ark Invest

• What I’m Reading: What I’m Reading: 7 Best Bitcoin ETFs of 2025

• Acronyms of the Day: ETF, ETP & ETN

• Whenever you are ready, here is how I can help you

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A Look at the Markets: Bitcoin, 21Shares Bitcoin Core ETP & Coinbase

These assets are all mentioned in our main section - 6 Ways to Gain Bitcoin Exposure Without Buying Crypto Directly.

Bitcoin $BTC.X ( ▲ 0.66% ) 

21Shares Bitcoin Core ETP

Coinbase $COIN ( ▲ 1.64% ) 

Putting them all Together

Note: The 21Shares Core Bitcoin ETP is priced in euros on my chart, whereas Bitcoin is typically quoted in US dollars. The discrepancy in performance is largely due to the US dollar weakening against the euro since the start of the year, which has reduced the ETP’s returns when compared to Bitcoin in USD terms.

Coinbase has performed worse than Bitcoin since the beginning of the year.

6 Ways to Gain Bitcoin Exposure Without Buying Crypto Directly

Simplified Investment Approaches for Traditional Investors

Introduction

Two weeks ago, we explored the four-step process of purchasing and securing Bitcoin directly.

This process involves selecting a reputable exchange, converting fiat currency to digital assets, executing your purchase, and transferring to a hardware wallet for maximum security. While direct ownership offers complete control over your Bitcoin, many investors find these technical steps intimidating or time-consuming. Fortunately, several investment vehicles allow you to gain exposure to Bitcoin's price movements without navigating cryptocurrency exchanges or managing private keys.

Let's examine these alternatives to direct Bitcoin ownership and their respective trade-offs.

1. Bitcoin ETFs and ETPs

The approval of Bitcoin ETFs in the United States in early 2024 marked a watershed moment for cryptocurrency investment accessibility.

While ETFs are available in the USA, due to different regulations, ETPs (exchange-traded products) or ETNs (exchange-traded notes) are available in Europe. These track Bitcoin's price and can be purchased through traditional brokerage accounts using the same process as buying stocks, eliminating the need for cryptocurrency exchanges or digital wallets. Although I hold most of my Bitcoin directly, I bought the 21Shares Bitcoin Core ETP (not a recommendation - do your own research!) as part of my research for this newsletter.

While buying an ETP is undoubtedly easier than buying Bitcoin directly, the downside is that investors pay ongoing management fees, don't actually own the underlying asset, and remain dependent on the fund manager's custodial security measures.

2. Blockchain ETFs

Rather than being exposed solely to Bitcoin, Blockchain technology ETFs offer exposure to a diversified portfolio of companies implementing or developing blockchain solutions across multiple industries.

These funds typically include technology firms, financial institutions, and companies directly involved in cryptocurrency mining or trading, providing broader exposure than single-cryptocurrency investments. Blockchain ETFs like Amplify Transformational Data Sharing ETF (BLOK) or First Trust Indxx Innovative Transaction & Process ETF (LEGR) allow investors to participate in the growth of the entire ecosystem without selecting individual winners in a rapidly evolving landscape.

The drawback is that these investments may not closely correlate with Bitcoin's price movements, often include traditional companies with limited blockchain exposure, and still charge management fees that can erode returns over time.

3. Public Companies with Bitcoin Holdings

Some publicly traded companies have allocated significant portions of their treasury to Bitcoin, effectively transforming their stock into a partial Bitcoin play.

MicroStrategy, led by Bitcoin advocate Michael Saylor, has adopted Bitcoin as its primary treasury reserve asset, purchasing billions of dollars worth of the cryptocurrency since 2020. Other companies like Tesla, Block (formerly Square), and cryptocurrency exchanges like Coinbase offer exposure to the broader cryptocurrency ecosystem through their business operations and holdings.

The risk here is that you're also exposed to all the company's business operations, management decisions, and industry-specific challenges that may overshadow or contradict Bitcoin's performance - owning part of a business exposes you to additional risk to just owning the asset.

4. Fintech Apps and Neo-banks

Financial technology platforms like Revolut, PayPal, and Cash App have integrated cryptocurrency trading features directly into their user-friendly interfaces.

These services allow users to purchase Bitcoin and other cryptocurrencies with a few taps on their smartphone, often with lower minimum investment amounts than traditional exchanges. While these platforms simplify the buying process significantly, they typically don't permit withdrawals to external wallets, meaning users don't actually control the private keys to their cryptocurrency.

The major disadvantage is that without self-custody you vulnerable to platform insolvency, account freezes, or policy changes that could restrict access to your investment.

5. Bitcoin Mining Stocks

Investing in cryptocurrency mining companies provides indirect exposure to Bitcoin through businesses dedicated to producing new coins.

Companies like Riot Platforms, Marathon Digital Holdings, and Hut 8 Mining operate large-scale mining facilities that generate revenue primarily through newly minted Bitcoin. These stocks often demonstrate higher volatility than Bitcoin itself, potentially amplifying returns in bull markets but also magnifying losses during downturns.

The disadvantage is that mining companies face additional operational risks including electricity costs, hardware obsolescence, regulatory challenges, and competitive pressures that can significantly impact profitability regardless of Bitcoin's price performance.

6. Bitcoin Futures and Options

Derivatives markets offer sophisticated investors exposure to Bitcoin through standardised contracts traded on regulated exchanges.

Bitcoin futures and options contracts allow investors to speculate on future price movements without holding the underlying asset.

I do not believe that inexperienced investors should consider futures or options, but I included them here to complete the list.

Conclusion

In conclusion, it’s crucial to understand that purchasing an alternative to buying Bitcoin directly is not the same as buying and holding actual Bitcoin.

Let’s examine the advantages and disadvantages presented in this table, along with explanations below.

✅ Advantages of Indirect Bitcoin Exposure

1. Accessible via traditional platforms
   → Use your regular broker or bank account, no need to sign up for a crypto exchange.

2. Simplified tax reporting
   → Your broker typically tracks gains/losses; easier to report in your home country.

3. No need to store or memorise private keys
   → No risk of losing access due to a lost wallet or seed phrase.

4. Regulated financial products
   → ETFs, ETPs, and public stocks are regulated and often covered by investor protections.

5. Can be held in tax-advantaged accounts
   → e.g., ISAs (UK), IRAs (US), pension accounts, or Italian tax wrappers.

6. More familiar for banks and advisors
   → Makes it easier to discuss or include in your broader financial plan.

7. Easier for estate planning
   → Inheriting shares or funds is straightforward compared to inheriting self-custodied crypto.

8. No custody risk on your part
   → You’re not responsible for safekeeping the asset.

9. Diversification opportunities
   → Blockchain ETFs let you spread risk across multiple companies or sectors.

10. Liquidity and ease of trading
    → Easy to buy or sell large amounts without worrying about exchange slippage or transfer delays.

❌ Disadvantages of Indirect Bitcoin Exposure

1. No peer-to-peer functionality
   → You cannot send it to another wallet or use it for payments directly.

2. Not portable or censorship-resistant
   → You can't memorise it or carry it across borders during crises.

3. Underlying fees
   → ETFs, ETPs, and funds charge annual management fees.

4. No true ownership
   → You own shares or claims — not actual Bitcoin. No access to the asset itself.

5. Counterparty and custodial risk
   → You're trusting issuers, fund managers, and custodians not to go bust or be hacked.

6. Market hours only
   → ETFs and traditional assets don’t trade 24/7 like crypto does.

7. Premium/discount to NAV (for trusts or some ETPs)
   → Price may not match the actual Bitcoin value, especially in volatile periods.

8. Limited upside for some vehicles
   → Stocks like Coinbase or miners can underperform Bitcoin itself.

9. No access to on-chain innovation
   → You miss out on using Lightning, multisig wallets, Ordinals, etc.

10. Tax treatment may vary
    → Some indirect products may be taxed less favourably than holding the underlying asset, depending on local laws.

Remember that regardless of how you choose to gain exposure to Bitcoin, all cryptocurrency investments should be approached with careful consideration of your overall financial strategy and risk management plan.

As always, none of this is financial advice. Everyone should invest according to their personal circumstances, risk tolerance and financial goals.

Quote of the Day: Yassine Elmandjra, Ark Invest

What I’m Reading: 7 Best Bitcoin ETFs of 2025

Further reading on Bitcoin ETFs:

Note: these may not be the best Bitcoin ETFs for your personal situation or in your country. I include the article for general information about Bitcoin ETFs.

Acronyms of the Day: ETF, ETP & ETN

ETF (Exchange-Traded Fund) - acronym - countable - an investment fund traded on stock exchanges that holds assets such as stocks, bonds, or commodities and typically aims to track the performance of a specific index Many investors prefer ETFs due to their lower expense ratios, tax efficiency, and the ability to trade them throughout the day like individual stocks.

ETP (Exchange-Traded Product) - acronym - countable - a type of security that is traded on an exchange and derives its value from other investment instruments, such as commodities, currencies, or indices ETPs serve as an umbrella term that includes various exchange-traded investment vehicles like ETFs, ETNs, and ETCs (Exchange-Traded Commodities).

ETN (Exchange-Traded Note) - acronym - countable - an unsecured debt security issued by a bank that tracks an underlying index of securities and trades on a major exchange like a stock Unlike ETFs, ETNs are debt instruments subject to the credit risk of the issuing financial institution, potentially exposing investors to counterparty risk if the issuer defaults.

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Disclaimer:

This newsletter is for informational and educational purposes only and should not be construed as financial advice. The information contained herein is generic and does not take into account your individual financial circumstances. You should always consult with a qualified financial professional before making any investment or financial decisions.

Additionally, the authors and/or publishers of this newsletter may hold investments in securities or other financial instruments mentioned herein. These are included for illustrative purposes only and should not be taken as a recommendation to buy or sell such securities or financial instruments.