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Cryptocurrency Investing

Looking for spot Bitcoin ETFs? Schwab clients can find them in the Morningstar category "Digital Assets" using Schwab's Fund Finder tool. Go to Fund Finder

Ways to invest in cryptocurrency at Schwab

For investors interested in cryptocurrency, Schwab has several choices for gaining exposure to cryptocurrency markets, though spot trading of cryptocurrency is not currently available.

Cryptocurrency-related ETFs and Mutual Funds

Exchange-traded funds (ETFs) and mutual funds are available that provide exposure to spot cryptocurrency, cryptocurrency futures contracts, and companies focused on servicing the cryptocurrency market.

Schwab Crypto Thematic ETF

Our Schwab Crypto Thematic ETF is designed to deliver global exposure to companies that may benefit from the development or utilization of cryptocurrencies (including Bitcoin) and other digital assets, and the business activities connected to blockchain and other distributed ledger technology.

See the Schwab Crypto Thematic ETF details

Additional ETFs & Mutual Funds

Clients looking for spot Bitcoin ETFs can find these and other third-party ETF and mutual fund products available at Schwab. These funds invest in cryptocurrencies, cryptocurrency futures contracts, or equities related to cryptocurrencies. You can find them in the Morningstar category "Digital Assets" using Schwab's Fund Finder tool.

Go to Fund Finder

Note: Products shown are for informational purposes only and should not be considered an individualized recommendation. Fund Finder links require client login.

Cryptocurrency Coin Trusts

These products allow investors to trade shares in trusts holding large pools of a cryptocurrency, although these can trade at a premium/discount to net asset value (NAV), involve high volatility, hefty fees, and other risks. They trade over-the-counter (OTC) and behave like closed-end funds. Here are just a few examples:

Grayscale Ethereum Trust

ETHE

Grayscale Litecoin Trust

LTCN

Bitwise 10 Crypto Index Fund

BITW

Grayscale Bitcoin Cash Trust

BCHG

Grayscale Digital Large Cap Fund

GDLC

Grayscale Ethereum Classic Trust

ETCG

Note: Products shown are for informational purposes only and should not be considered an individualized recommendation. Symbol links require client login.

Cryptocurrency Futures

Clients with a  futures account  can trade cryptocurrency futures contracts directly. Traded contracts are settled in cash, not cryptocurrency.

Cryptocurrency Stocks

Some stocks provide indirect exposure to cryptocurrency due to the company's relationship to digital assets. Here are just a few examples:

Coinbase

COIN

MicroStrategy

MSTR

Visa

V

PayPal

PYPL

Riot Platforms

RIOT

Beyond

BYON

Note: Products shown are for informational purposes only and should not be considered an individualized recommendation. Symbol links require client login.

What is cryptocurrency?

Cryptocurrency is a virtual currency secured through one-way cryptography. It appears on a distributed ledger called a blockchain that's transparent and shared among all users in a permanent and verifiable way that's nearly impossible to fake or hack into. The original intent of cryptocurrency was to allow online payments to be made directly from one party to another without the need for a central third-party intermediary like a bank. However, with the introduction of smart contracts, non-fungible tokens, stablecoins, and other innovations, additional uses and capabilities for cryptocurrency are rapidly evolving. Cryptocurrencies are not FDIC insured and are not protected by SIPC or CFTC regulations.

Popular Types of Cryptocurrencies

Bitcoin

Bitcoin, the most well-known cryptocurrency, allows for direct peer-to-peer exchange of value on a decentralized payment network.

Ether (ETH)

Ether is a cryptocurrency that is native to the Ethereum blockchain and network. The Ethereum blockchain allows users to create programmable "smart contracts" which execute only after certain conditions are met between two or more parties.

How does cryptocurrency get its value?

Cryptocurrency's value stems from a combination of scarcity and the perception that it is a store of value, an anonymous means of payment, or a hedge against inflation. Cryptocurrency investors can buy or sell them directly in a spot market, or they can invest indirectly in a futures market or by using investment products that provide cryptocurrency exposure.

Schwab's perspective

We suggest that clients who are interested in cryptocurrency approach them as speculative investments and consider their goals as well as the risks involved. For those who already have a diversified portfolio and a long-term investment plan, we see cryptocurrency as being used primarily for trading purposes outside the traditional portfolio. Read more about our perspective on spot Bitcoin ETFs here .

Here are some aspects to consider about cryptocurrency investing in general, as well as differences between investing directly in the spot market vs. indirectly.

Cryptocurrency Investing table

Cryptocurrency Investing table Benefits Benefits Risks Risks Cryptocurrency Investing Benefits Potential for appreciation
Some investors are attracted to the volatile price swings as a potential for profit. 
Portfolio diversification
Some investors believe that if the lack of correlation with other asset classes continues, cryptocurrency could add diversification to a portfolio.   Risks Potential for financial loss
Cryptocurrency prices historically have been highly volatile, and fluctuations could result in significant financial losses regardless of whether you have direct or indirect exposure.  Direct Investing (spot market) Considerations Benefits Transaction transparency
The use of blockchain records transactions between parties in a verifiable and permanent way visible to all. 
24/7 access
Unlike traditional exchange-traded products, cryptocurrency can be bought or sold at any time. 
Control
With self-custody and blockchain interoperability, cryptocurrency provides substantial user autonomy outside of traditional financial networks. Risks Potential for fraud  According to the Federal Trade Commission , "Many people have reported being lured to websites that look like opportunities for investing in or mining cryptocurrencies, but are bogus." 
Lack of recoverability  Cryptocurrency assets are accessed using a key that’s not retrievable if lost. Similarly, if you lose access to the place where you store your key, you will effectively lose possession of your cryptocurrency.  Indirect Investing Considerations Benefits Regulation   The investment products offered at Schwab provide an element of regulation and consumer protections that spot trading lacks. 
Recoverability  Access to conventional investment accounts can usually be recovered if your credentials are misplaced.  Risks High expenses for trusts and funds  Cryptocurrency trusts and mutual funds can involve high expenses, with fees exceeding 2% or more of the investment. 
Leverage risk for futures   Cryptocurrency futures are leveraged products, meaning you could lose more than you initially invested, quickly and with relatively small price movements in the underlying futures product. 1

1. Virtual currencies including bitcoin experience significant price volatility, and fluctuations in the underlying virtual currency's value between the time you place a trade for a virtual currency futures contract and the time you attempt to liquidate it will affect the value of your futures contract and the potential profit and losses related to it.

 

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Common questions

What is the difference between virtual currency, digital currency, cryptocurrency, and Bitcoin?

Digital currency refers to any currency that exists online. Virtual currency is a digital representation of value and subset of digital currency. Cryptocurrency is a subset of virtual currency and Bitcoin is a type of cryptocurrency.

Why did cryptocurrencies like Bitcoin become so popular?

News about Bitcoin and other cryptocurrencies have been impossible to ignore. Investors hear news about overnight millionaires who lose their fortunes just as quickly. For example, a single bitcoin ranged in price from $1,000 in early 2017 to a high of over $66,000 in October 2021, with intense volatility in between. By the end of 2022 it declined to around $16,000.

Like many new technologies or products, cryptocurrency has attracted adherents interested in innovation and the perceived absence of governmental control. Traders saw it as an alternative to traditional investments such as stocks, bonds, and cash, and trading momentum led to a rising, if highly volatile, price. All of this attracted media attention, which drove mainstream awareness and, ultimately, increasing acceptance. Major companies, including Microsoft, PayPal, and Overstock now accept Bitcoin as a form of payment.

Are cryptocurrencies safe investments?

Cryptocurrencies are speculative investments, with significant volatility of cryptocurrency prices and the prices of indirect investments that have exposure to the cryptocurrency market. Cryptocurrency doesn't fit within traditional asset allocation models, as it is neither a traditional commodity, such as gold, nor a traditional currency. Its volatility is driven primarily by supply and demand, not inherent value. Bitcoin, for example, doesn't have earnings or revenues. It doesn’t have a price-to-earnings ratio, price-to-sales ratio, or book value. Traditional value metrics don't apply, so there are no methods for assessing its value that we endorse or find persuasive beyond the trading value. Considering its volatility and the possibility that the entire value of a cryptocurrency investment could disappear, investors who don’t think they could handle the market swings might want to steer clear.

There is also cryptocurrency risk besides volatility, as no regulatory infrastructure is in place for cryptocurrencies. Nothing exists yet to back you up like the Federal Deposit Insurance Corporation does for U.S. bank customers. That means investors are entirely responsible for the security of any cryptocurrency spot holdings. The SEC has noted that with cryptocurrencies, there is "substantially less investor protection than in our traditional securities markets, with correspondingly greater opportunities for fraud and manipulation."

Can I buy and sell individual cryptocurrencies directly in my Schwab account?

Though you can get exposure to cryptocurrencies in multiple ways at Schwab—trusts, futures, ETFs, and individual equities—you cannot currently buy or sell individual cryptocurrencies directly in a Schwab account. 

We understand there is some client interest and engagement in cryptocurrencies, and we are looking closely and cautiously at this space. Clarity from regulators will be important before we consider offering a retail cryptocurrency experience. If we do, you can expect it to be designed to support client need and surrounded by the advice and education our clients have come to expect and deserve from us. 

Can I transfer money to Schwab using cryptocurrency?

No, Schwab does not accept cryptocurrency deposits, nor do we accept or disburse cryptocurrencies for settlement of securities or futures transactions. 

Are there Cryptocurrency ETFs?

ETFs available at Schwab provide exposure to spot cryptocurrencies, cryptocurrency futures contracts, and to companies that are focused on servicing the cryptocurrency market and digital assets.

Schwab Asset Management also offers the Schwab Crypto Thematic ETF that provides global exposure to companies that may benefit from the development or utilization of cryptocurrencies and other digital assets, and the business activities connected to the blockchain and other distributed ledger technology. This ETF does not invest directly in any cryptocurrency or digital asset.

These ETFs, as well as cryptocurrency or digital asset-related ETFs that the SEC may approve in the future, can be found in the Morningstar category "Digital Assets" using Schwab's ETF Fund Finder tool.

Do I need a futures account to trade cryptocurrency futures?

Yes, a futures account is required to trade Bitcoin futures contracts, and certain requirements must be met to trade futures. Clients can log in and apply online to open a futures account. 

Do investors pay taxes when buying or selling cryptocurrency?

The IRS treats cryptocurrency as property, not currency. Transactions in cryptocurrency spot markets are thus considered taxable by the Internal Revenue Service (IRS) whenever a taxable event occurs, such as selling cryptocurrency for a fiat currency (i.e., U.S. Dollars, Euros, etc.) or when traded for another asset. Investors are responsible for tracking cost basis, gains, and other reporting. If you have questions or concerns about the potential tax implications of transacting in cryptocurrencies, you should refer to this IRS publication or consult with a tax advisor.

What's the difference between Bitcoin and blockchain?

Blockchain is the underlying technology that supports cryptocurrencies like Bitcoin. It is an open-source, public record-keeping system operating on a decentralized computer network that records transactions between parties in a verifiable and permanent way. Blockchain provides accountability, as the records are intended to be immutable, which presents potential applications for many businesses. While blockchain has often been associated with cryptocurrency, it has many potential uses beyond payments, including smart contracts, supply chain management, and financial services. Note that ownership of Bitcoin or other cryptocurrencies is not an investment in blockchain, the technology, or its current or future uses.

Want to learn more?

Check out Schwab's insights about cryptocurrency .

STCE

Investors should consider carefully information contained in the prospectus, or if available, the summary prospectus, including investment objectives, risks, charges, and expenses. You can request a prospectus by calling 800-435-4000 . Please read the prospectus carefully before investing.

Investment returns will fluctuate and are subject to market volatility, so that an investor’s shares, when redeemed or sold, may be worth more or less than their original cost. Shares of ETFs are not individually redeemable directly with the ETF. Shares are bought and sold at market price, which may be higher or lower than the net asset value (NAV).

The Schwab Crypto Thematic ETF does not invest directly in any cryptocurrencies or other digital assets. It invests in companies listed in the Schwab Crypto Thematic Index and is designed to deliver global exposure to companies that may benefit from the development or utilization of cryptocurrencies (including bitcoin) and other digital assets, and the business activities connected to blockchain and other distributed ledger technology.

Past performance is no guarantee of future results and the opinions presented cannot be viewed as an indicator of future performance.

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision. Investing involves, risk, including risk of loss.

All corporate names and symbols shown above are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security.

Digital currencies are highly volatile and not backed by any central bank or government. Digital currencies lack many of the regulations and consumer protections that legal-tender currencies and regulated securities have. Due to the high level of risk, investors should view cryptocurrency as a purely speculative instrument.

Virtual Currency Derivatives trading involves unique and significant risks. Please read NFA Investor Advisory – Futures on Virtual Currencies Including Bitcoin and CFTC Customer Advisory: Understand the Risk of Virtual Currency Trading .

Futures, and Futures options trading involves substantial risk and is not suitable for all investors. Please read the Risk Disclosure Statement for Futures and Options prior to trading futures products.

Futures accounts are not protected by the Securities Investor Protection Corporation (SIPC).

Additional CFTC and NFA futures and forex public disclosures for Charles Schwab Futures and Forex LLC can be found here .

Futures and futures options trading services provided by Charles Schwab Futures and Forex LLC. Trading privileges subject to review and approval. Not all clients will qualify.

Charles Schwab Futures and Forex LLC (NFA Member) and Charles Schwab & Co., Inc. (Member FINRA/SIPC) are separate but affiliated companies and subsidiaries of The Charles Schwab Corporation.

Cryptocurrency-related products carry a substantial level of risk and are not suitable for all investors. Investments in cryptocurrencies are relatively new, highly speculative, and may be subject to extreme price volatility, illiquidity, and increased risk of loss, including your entire investment in the fund. Spot markets on which cryptocurrencies trade are relatively new and largely unregulated, and therefore, may be more exposed to fraud and security breaches than established, regulated exchanges for other financial assets or instruments. Some cryptocurrency-related products use futures contracts to attempt to duplicate the performance of an investment in cryptocurrency, which may result in unpredictable pricing, higher transaction costs, and performance that fails to track the price of the reference cryptocurrency as intended. Please read more about risks of trading cryptocurrency futures here . 

Diversification strategies do not ensure a profit and do not protect against losses in declining markets.

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The Charles Schwab Corporation provides a full range of brokerage, banking and financial advisory services through its operating subsidiaries. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. ("Schwab") ( Member SIPC ), is registered by the Securities and Exchange Commission ("SEC") in the United States of America and offers investment services and products, including Schwab brokerage accounts, governed by U.S. state law. Schwab is not registered in any other jurisdiction. Neither Schwab nor the products and services it offers may be registered in your jurisdiction. Neither Schwab nor the products and services it offers may be registered in any other jurisdiction. Its banking subsidiary, Charles Schwab Bank, SSB (member FDIC and an Equal Housing Lender), provides deposit and lending services and products. Access to Electronic Services may be limited or unavailable during periods of peak demand, market volatility, systems upgrade, maintenance, or for other reasons.

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