Get access to digital assets through regulated investment vehicles – all within your PNC Wealth Management account
At PNC Wealth Management, we help you explore this evolving asset class through regulated, secure investment vehicles like ETFs
All three of these are related, but there are differences between them. Digital currencies are currencies that are stored or transacted with entirely or almost entirely electronically. Cryptocurrencies are a type of digital currency that use Blockchain technology and cryptography for secure and decentralized transactions. Bitcoin is a particular cryptocurrency, but there are tens-of-thousands of other cryptocurrencies as well. In short, not all cryptocurrencies are Bitcoin, and not all digital currencies are cryptocurrencies.
There is a long history of high volatility as well as scams in the crypto space. As the industry has grown though, it has become much safer to invest in cryptocurrencies. Especially with the development of Bitcoin and Ethereum ETFs, which removes the need for an investor to worry about their wallet, keys, or what exchange they are using, since they are able to invest through legacy platforms in funds that are managed by well-established firms.
The fees paid buying and selling crypto can vary based on how someone is investing. If someone goes to an exchange and buys and sells crypto directly, then there are fees that are charged on that trade that can vary based on the price of the crypto and the volume of trading that is going on. Higher volume and higher prices mean more expensive trades. When buying an ETF that holds crypto then the only fees that would be paid are those that would apply to any other ETF trade and a management fee that is charged by the fund company that manages the ETF, similar to the fees that are associated with other ETFs and mutual funds.
Tax treatment of digital assets and crypto‑linked ETFs can be complex and may change in the future. Cryptocurrencies are generally treated as property for U.S. federal tax purposes, which can result in short‑ or long‑term capital gains or losses; ETF tax treatment varies by structure and holdings. Consult a qualified tax professional regarding your specific situation.
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