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Products available in Europe
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There are several ways of gaining exposure to digital assets, depending on what investors are looking for and how they manage their risk. We take a closer look with Enzo Hallot, a financial investment adviser registered with Orias and a member of Anacofi. He is the founder of Crypto Patrimoine.
Direct purchase of digital assets
This is the historical way of gaining exposure to digital assets, by buying and holding them directly, either via a centralised exchange platform or via an electronic wallet.
- Advantages: there are generally no custody or transfer fees, very low transaction costs
- Disadvantages: regulation still weak, high risk and low investor protection
- Taxation: flat tax or progressive scale, declaration of platforms abroad
- Examples: direct purchase via exchange platforms such as Binance, Kraken or Coinhouse or via electronic wallets such as Metamask
Buying shares linked to blockchain technology
These are shares in companies linked to blockchain technology (mining, infrastructure, IT hardware, etc.)
- Advantages: regulated framework with possible dividends, voting rights and other financial properties linked to a company's shares, transparency and generally liquidity.
- Disadvantages: sensitivity to crypto asset markets degraded
- Taxation: PEA/securities account taxation
- Examples: Nvidia, The Blockchain Group, Microstrategy, Coinbase, etc.
ETF (Exchange Traded Fund)
ETFs generally aim to replicate the performance of a stock market index.
- Advantages: ease of investment, diversified exposure, under the UCITS standard for ETFs in Europe
- Disadvantages: sensitivity to cryptoasset markets degraded as no spot ETF yet
- Taxation: taxation of the tax wrapper in which the product is housed (life insurance, securities account, etc.)
- Examples: Tobam, Melanion
ETC/ETN (Exchange Traded Certificate / Exchange Traded Notes)
These are similar products to ETFs but reflect a "commodity" in the case of ETC or a debt in the case of ETN
- Advantages: access to dedicated strategies
- Disadvantages: credit risk, non-collateralised ETNs
- Taxation: taxation of the tax wrapper in which the product is housed (life insurance, securities account, etc.).)
- Examples: Coinshares, 21Shares, Hashdex, etc.
Derivatives (futures, options and CFDs)
These are financial contracts whose value depends on an underlying asset. They can be used to hedge against risk, create leverage, etc.
- Advantages: enables protection against adverse price fluctuations
- Disadvantages: complexity, counterparty risk and sensitivity to market volatility
- Taxation: taxation of the tax wrapper in which the product is housed (life insurance, securities account, etc.)
- Examples: Leontec, Marex, LS advisor
Structured products
These are complex financial instruments created to measure and enabling very specific strategies to be developed. They generally combine the products seen above (equities, bonds, derivatives, etc.)
- Advantages: customisation: possibility of creating capital protection, product recall, yield enhancement
- Disadvantages: complexity and costs
- Taxation: taxation of the tax wrapper in which the product is housed (life insurance, securities account)
- Examples: Leontec, Marex, LS advisor
