Breaking News
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

TFSA Investors: You Can Now Add Bitcoin and Ethereum to Your Portfolio

Stock MarketsJul 29, 2021 14:15
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
TFSA Investors: You Can Now Add Bitcoin and Ethereum to Your Portfolio

The Tax-Free Savings Account (TFSA) is a flexible registered account that is fast gaining popularity among Canadians. The TFSA was introduced back in 2009, and any withdrawals from this account are exempt from Canada Revenue Agency taxes. These withdrawals can be in the form of capital gains, interests, or even dividends.

These factors make the TFSA an ideal account to hold high-growth instruments. The contribution limit towards this account stands at $6,000 for 2021, and the cumulative contribution limit is $75,500. So, if you manage to turn your contribution of $6,000 into $60,000 or more, you can withdraw all your profits without paying a single penny to the CRA.

Investors who are just starting out and have a high-risk appetite can consider adding cryptocurrencies to their TFSA portfolio. These digital assets have been some of the top-performing investments in the last decade.

For example, the prices of Bitcoin have soared by 6,600% in the last five years, while Ethereum is up a monstrous 19,000% since the end of July 2016. Due to the widespread adoption of cryptocurrencies in the past year, several ETFs or exchange-traded funds have been launched that track these digital assets. We’ll look at two such ETFs that can be part of your TFSA.

3iQ Coinshares Ether ETF 3iQ is Canada’s largest digital asset fund manager. It manages around $2 billion in total assets, while CoinShares leads the digital asset fund management space in Europe with US$2.5 billion in assets under management. The 3iQ CoinShares Ether ETF (TSX:ETHQ) is an open-ended fund that trades on the TSX and provides exposure to Ether. The ETF has a management fee of 1%, and its management expense ratio will not exceed 1.25%.

It aims to track the price of Ether, which is the second-largest cryptocurrency in the world in terms of market cap. This digital asset has multiple use cases, and its blockchain platform is widely used for decentralized finance (DeFi) and NFT (non-fungible tokens) projects.

The recent pullback in Ethereum provides investors with a buying opportunity, especially if you are bullish on the crypto space in the long term. Further, the ETF might seem attractive to contrarian investors, as Ethereum prices are down 50% from record highs.

The 3iQ Coinshares Ether ETF was launched in April and touched a record of $21.74 in mid-May. Its currently trading at $11.88, at the time of writing.

Purpose Bitcoin ETF Bitcoin is the world’s most popular cryptocurrency and is currently valued at a market cap of US$745.8 billion, at the time of writing. You can hold Bitcoin in your TFSA by purchasing the Purpose Bitcoin ETF. One of the largest asset management companies in Canada, Purpose has over $10 billion in AUM.

The Foolish takeaway Bitcoin and Ethereum remain high-risk assets due to the lack of regulation. It means the prices of cryptocurrencies can easily be manipulated by larger players and burn the wealth of retail investors. Alternatively, institutions all over the world are adopting Bitcoin as a means of payment, which should increase demand and liquidity in 2021 and beyond.

Due to massive volatility, investors need to set aside a small amount of capital that they can afford to lose and gain exposure to Bitcoin as well as Ethereum right now.

The post TFSA Investors: You Can Now Add Bitcoin and Ethereum to Your Portfolio appeared first on The Motley Fool Canada.

Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

This Article Was First Published on The Motley Fool

TFSA Investors: You Can Now Add Bitcoin and Ethereum to Your Portfolio
 

Related Articles

2 Stocks to Buy Now and Hold for Decades
2 Stocks to Buy Now and Hold for Decades By The Motley Fool - Sep 27, 2021

The world is changing, and it’s changing quite rapidly. And the change is permeating every facet of our lives, including investing. Take e-commerce and crypto as an example....

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email