IG, the United Kingdom’s largest forex provider, welcomed the addition of a portfolio with a bitcoin investment component. Known as Invest Your Way (IYW), this fund allows traders to invest in bitcoin through CFDs or contracts for difference.
A CFD is a type of futures contract that allows investors to settle price differences in cash rather than the physical transfer of goods. In this particular case, the CFD will mimic the price action of the cryptocurrency, which is the underlying asset in the contract.
Bitcoin Investment Options
“We actively work with clients to expand this range and the most highly requested product since launch has been bitcoin. Many people are aware of what they are, yet few know how to access them [bitcoin]. Fewer still would have any idea how to build bitcoin into a diversified portfolio,” mentioned IYW CEO Michael Newell.
“In response to this demand we have worked to bring a solution to market that allows for exposure to bitcoin as part of a balanced and managed portfolio,” he added.
Newell noted that bitcoin is a relatively new product and that its price action can be quite volatile. To manage this risk properly, IYW will have the bitcoin investment component as just one holding within a diversified fund. This way, they can reduce the portfolio’s overall exposure to the cryptocurrency’s volatility.
“IG manages its risk appropriately with bitcoin as they do with every other asset class, and runs its platform with its own set of due diligence and risk criteria,” explained Newell. A spokesperson from the UK forex platform confirmed this inclusion of a bitcoin based investment in a portfolio on their platform, adding that they provided the underlying infrastructure which enabled it to format the investment product. IG added that it can “securely hold their client money in segregated accounts in line with FCA regulatory requirements”.