Investors are buying into the emerging digital currency bitcoin as its meteoric rise in value sparks fears about a price crash.
But the futures market for that asset remains largely unregulated, and investors who don’t like the risk of a crash are turning to traditional investment bonds and ETF trading.
The price of a bitcoin has surged more than 6,000 percent over the past year, hitting $13,900 at the start of trading on Friday.
The currency has gained more than 20 percent in value since the beginning of the year.
The demand for bitcoin has been fueled by the rapid rise in its price and the ease of trading it through an unregulated marketplace.
But investors say the cryptocurrency’s volatility has been exaggerated, and that its fundamentals are sound.
The value of a single bitcoin traded on a major exchange like the U.S. Securities and Exchange Commission has soared over the last year to more than $16 billion, according to data compiled by Bloomberg.
A dollar of bitcoin trades for about $2.10, according the data.
Investors who hold bitcoins for their personal accounts will still need to worry about the volatility of the cryptocurrency.
There’s no central authority that can regulate bitcoin, which makes it difficult for governments to police it.
A major bitcoin exchange like Coinbase, which operates in the U, has faced scrutiny in recent months for the way it handles customer information.
It said it will remove more than 1,400 bitcoin accounts this month from the U market.
“It’s very important that they are not trading it on a platform that is not regulated,” said Daniel Greenfield, managing director of investment banking at investment advisory firm Investment Trust Advisors in New York.
“Investors have an inherent concern about bitcoin.
The risk is that there’s going to be a huge price spike,” Greenfield said.
“If it happens, it could very easily be a price collapse.”
The value of the bitcoin traded through an exchange like Gemini, which is owned by an American private equity firm, has declined nearly 25 percent over that time, according a report in the Wall Street Journal.
The bitcoin ETF, which tracks the value of bitcoin, is designed to help investors manage their investment portfolios.
It allows investors to trade bitcoin in a variety of ways.
The ETF’s chief asset manager, Jon Kagan, said the value is a function of how much the cryptocurrency has gained since the start.
Kagan said that in addition to the value gained from trading on the bitcoin exchange, he said bitcoin’s price could fall when investors buy other cryptocurrencies, like the ethereum digital currency.
The Bitcoin Investment Trust’s most recent data showed bitcoin had dropped 8.6 percent in the past three weeks.
In the past week, bitcoin has gained nearly 20 percent, and the cryptocurrency surged to record highs after regulators approved a bitcoin-backed cryptocurrency.
The price of the virtual currency has surged by more than 7,000 times since Jan. 1.
The cryptocurrency has surged over the years to $4.8 billion.
In an effort to hedge against bitcoin’s volatile rise, investors are turning toward bonds and other investment securities.
The SPDR S&P 500 ETF has traded in bitcoin futures since the middle of last year.
The fund has traded about 1,200 futures contracts this year, said Michael Ladd, a spokesman for the fund.
ETFs aren’t subject to much oversight because they are designed to be used by investors, not traders, he added.
Investment bonds trade in a different form.
ETF futures are traded in a fixed-price basket of currencies.
These are traded as a basket of products like gold and silver that represent the value, in the futures markets, of a basket in a particular currency, said Robert Z. Kaplan, an investment analyst at the investment research firm Renaissance Technologies in Philadelphia.ETFs aren, however, subject to strict federal securities laws.
The U.K.’s Financial Conduct Authority has issued guidance about how to handle futures contracts, including how to ensure investors have adequate security for their investments.
Investors who hold ETFs for their own account should make sure they hold the ETFs at least six months in the case of a default, and five years for an extended default, according.
The SPDR ETF’s main investor, Vanguard Group Inc., owns more than 70 percent of the SPDR fund, according an SEC filing.
Vanguard has more than 8,500 futures contracts in the fund, which holds about 1.5 trillion shares of a variety, including gold and oil.
Investor interest in bitcoin hasn’t led to a crash.
Shares of bitcoin have risen nearly 100 percent in recent weeks.
Investments in digital currencies are growing quickly, but some investors are also buying into bitcoin.
One of the largest bitcoin ETFs, the Bitcoin Investment Fund, has grown to $1.4 billion this year from less than $100,000 in 2014.
The investment fund is managed by Elliott Management Inc. Elliott owns about