Bitcoin coins vs Bitcoin CME futures, what is the best way to go long?

[Daal]

What are the pros and cons of each?

From the top of my head

CME Futures Pros
-No hacking risk
-No hassle with storing the coins and worry about losing private keys/hardware wallets
-More cash/margin efficient

Cons
-Rollover costs
-Fixed position sizing at 5 BTC, hard to scale in and out unless you have a large account

Actual BTC Coins Pros
-You get own the forks as they come along, if you sell them right away and put the proceeds in BTC, its like a dividend of sorts
-It helps you understand the technology better
-Althogh it might be risky, you get generate an yield lending out your BTC (not that this is recommended)
-Easy to scale in and out

Cons
-Hacking or theft risk
-You might type the wrong address and lose all your coins in a transaction
-You might lose your keys, hardware wallet, etc and lose all your coins
-Its a hassle wiring money to exchanges. They lose bank relationships all the time
-Some countries might consider moving a lot of money in coins around as an AML trigger

What are some other pros and cons?

 

[gkishot]

What are the pros and cons of each?

From the top of my head

CME Futures Pros
-No hacking risk
-No hassle with storing the coins and worry about losing private keys/hardware wallets
-More cash/margin efficient

Cons
-Rollover costs
-Fixed position sizing at 5 BTC, hard to scale in and out unless you have a large account

Actual BTC Coins Pros
-You get own the forks as they come along, if you sell them right away and put the proceeds in BTC, its like a dividend of sorts
-It helps you understand the technology better
-Althogh it might be risky, you get generate an yield lending out your BTC (not that this is recommended)
-Easy to scale in and out

Cons
-Hacking or theft risk
-You might type the wrong address and lose all your coins in a transaction
-You might lose your keys, hardware wallet, etc and lose all your coins
-Its a hassle wiring money to exchanges. They lose bank relationships all the time
-Some countries might consider moving a lot of money in coins around as an AML trigger

What are some other pros and cons?

Futures are taxed mark to market. Plus they can be traded in the same account as other assets.

 

[formikatrading]

One additional idea is to buy the stock GBTC. Sure, there are a bunch of folks who will argue that there is too much of a premium but if you're just looking for some bitcoin upside, it's an easy way to play it - especially in retirement accounts, etc.

 

[Trader Curt]

Some of those cons for actual Bitcoins are just stupid user error. If you are too lazy to double check then triple check your address, that you should have copied and pasted to begin with, then it's your own fault. I have done over thousands of transfers, and not once have I ever screwed up a wallet address. That would just be pure stupidity.

Yes there is always the threat of hacking, but just about all exchanges have ramped up their security, and mostly because they reimburse the stolen funds when there is a hacking. And even when hackers hack an exchange they only get away with a few hacked accounts out of the millions of accounts that are on the exchange. Plus if you are that paranoid about your funds being hacked, you can send your coins to your own personal wallet. The chances of hackers hacking that go from .01% to .00001%

If you do your own research you can make trading crypto as painless as possible, it takes patience and some common sense.

 

[tsznecki]

@Daal Based on our conversations you already have physical BTC, what's wrong with staying the current course? I presume you already have your security figured out.

 

[Pekelo]

-You might type the wrong address and lose all your coins in a transaction
-You might lose your keys, hardware wallet, etc and lose all your coins

What is sending your money into thin air between friends? I mean your money will safely circulate in the pipes of the interweb forever and ever.

 

[traider]

Figure out how to make money trading it first. Then worry about the details when you need to scale it up

 

[Pekelo]

Since the premium is pretty high, you could sell cash covered puts on a monthly base. If the rally stops, you still make money, time works for you. If the price drops, you get assigned and you will own it. Then you can sell calls on it.

For options:

https://www.deribit.com

Edit: No US residents.

 

[cesfx]

If it's for long term holding I would buy the coins and store it cold offline, even on paper wallets with back up.
I have not shopped for years but I know some exchange like coinbase are now offering cold storage vaults.
For short term trading any decent derivatives should do.