CFA Level I · CFA Level I Exam · Introduction to Digital Assets
Compared with investing in a spot cryptocurrency directly, an investor who buys shares of an exchange-traded product that holds the cryptocurrency is most likely to benefit from:
An investor in an exchange-traded product that holds the cryptocurrency most likely benefits from not having to manage private keys or custody personally. The provider handles safekeeping and investors trade through ordinary brokerage accounts, though the product still carries the underlying asset's price volatility.
- Aelimination of all price volatility in the underlying asset
- Bavoiding the need to manage private keys and custody personallyCorrect
- Cearning staking yields that are guaranteed by the product issuer
Explanation
Exchange-traded products place custody with the provider, so investors avoid holding private keys and the associated risk of loss or theft, and can trade through ordinary brokerage accounts. The product still carries the underlying price volatility, and no yield is guaranteed.
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