Ontario Teachers’ – one of the largest pension funds in the world – claims to have invested $95 million in struggling crypto exchange FTX. Here’s how to bet on digital currency if you’re still a believer


Ontario Teachers’ – one of the largest pension funds in the world – claims to have invested $95 million in struggling crypto exchange FTX. Here’s how to bet on digital currency if you’re still a believer

Apparently, crypto isn’t just for risk-seeking speculators.

On Thursday, the Ontario Teachers‘ Pension Plan, which administers defined benefit pension plans for teachers in the Canadian province of Ontario, revealed that it had invested $95 million in the struggling cryptocurrency exchange FTX.

The pensions giant said the FTX investment was made through its Teachers’ Venture Growth platform, which was established in 2019 to “invest in emerging technology companies that raise late-stage venture capital and growth capital. “.

While the speculative gamble didn’t pay off — venture capital firm Sequoia Capital recently cut its investment in FTX to $0 — it’s not the end of the world for the pension plan.

“While there is uncertainty about the future of FTX, any financial loss on this investment will have a limited impact on the plan, given that this investment represents less than 0.05% of our total net assets,” OTPP said in a statement.

On Friday morning, FTX posted on Twitter that the company had filed for Chapter 11 bankruptcy.

It is a difficult time for investors. But if you still believe in the future of crypto, here are three ways to get your name out there.

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Buy bitcoin

The shortage of liquidity at FTX triggered a sell-off in the crypto world. Bitcoin, for example, has plunged 19% in the past five days, taking its year-to-date loss to a painful 65%.

But as the biggest cryptocurrency in the world, bitcoin still has a huge following and an increasing number of businesses around the world are using it.

MicroStrategy CEO Michael Saylor recently said bitcoin is “100 times better than gold.” If bitcoin reaches the size of gold as an asset class, Saylor predicts it could reach $500,000 a coin.

Considering where bitcoin is currently trading, $500,000 implies a potential upside of over 2,800%.

If you share this view, you can buy bitcoins directly.

There are many platforms these days that allow individual investors to buy and sell cryptos. Just be aware that some exchanges charge up to 4% commission fee for each trade. So look for apps that charge little or even no commission.

While bitcoin today commands a five-figure price, there is no need to buy an entire coin. Most exchanges allow you to start with as much money as you are willing to spend.

Crypto funds

People have long used funds to gain diversified exposure to a market or a specific segment of that market. Turns out you can do this with cryptocurrencies too.

For example, the Bitwise 10 Crypto Index Fund (BITW) tracks an index consisting of the 10 largest crypto assets weighted by market capitalization. Since cryptocurrencies are often very volatile, the index is rebalanced monthly to keep up to date with rapidly changing market prices.

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BITW’s five largest holdings are Bitcoin (61.8%), Ethereum (28.7%), Cardano (2.3%), Polygon (1.8%) and Polkadot (1.3%).

Of course, if you just want exposure to bitcoin, there are funds for that too: the ProShares Bitcoin Strategy ETF (BITO) began trading on NYSE Arca in October 2021, marking the first U.S. bitcoin-linked ETF on the market. market. The fund holds bitcoin futures that trade on the Chicago Mercantile Exchange.

Crypto stocks

What happened at FTX is a reminder that crypto businesses can be risky, but there are more entrenched players in the business.

For example, Coinbase Global (COIN) operates the largest cryptocurrency exchange in the United States. It makes money every time people buy and sell crypto on its platform, so it could be a game of pick and shovel.

While Coinbase shares have seen high volatility — they’re down 78% year-to-date — some analysts see a rebound on the horizon. Citi analyst Peter Christiansen has a “buy” rating on Coinbase and a price target of $80, implying a potential upside of 48%.

There is also PayPal (PYPL), which is not a pure-play crypto. The company is deeply rooted in the digital payment industry. But since PayPal also allows users to buy, sell, and hold crypto on its platform, it’s a name to consider if you’re looking for diversification.

PayPal shares have fallen 54% in 2022. BMO Capital Markets analyst James Fotheringham has an “outperform” rating on PayPal and a price target of $109, about 22% above the current stock position.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.


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