Bitcoin (CRYPTO: BTC) kicked off 2024 with a strong start, but saw a downturn from March to September. Recently, however, it has soared, climbing nearly 80% in just the last three months.
The reasons behind any significant market movement can be complex and multifaceted, but it seems that the recent surge in Bitcoin’s value can be partly attributed to the election of Trump. The incoming administration is perceived as supportive of cryptocurrencies and is expected to implement lenient regulatory measures. Trump himself, during his campaign, declared his intention to turn the U.S. into the “crypto capital of the world.”
The impact of governmental regulation on the cryptocurrency market cannot be overstated. This was demonstrated earlier in the year when the U.S. Securities and Exchange Commission (SEC) approved the creation of spot Bitcoin ETFs, which led to an impressive 85% increase in Bitcoin’s price within six weeks.
If you’re considering investing $2000 in Bitcoin, you might wonder about the best method to do so. While purchasing Bitcoin directly is an option, investing in spot Bitcoin ETFs offers a viable alternative. Here’s why I believe they are a smart choice.
The Importance of Bitcoin ETFs
Despite its rapid growth and massive investment influx, Bitcoin still faces skepticism due to its volatility and controversial history. Recall three years ago when FTX bought naming rights for Miami’s NBA arena in a whopping $135 million deal, only to collapse spectacularly a year later, resulting in a loss of nearly $9 billion in customer assets.
It’s crucial to differentiate between Bitcoin itself and private exchanges. The integrity of Bitcoin and its network remained untouched; the disaster was purely due to the mismanagement and fraudulent activities of a private company. However, such incidents have made many hesitant to enter the market. This is why the SEC’s endorsement of spot Bitcoin ETFs is a game changer. These ETFs provide a regulated way for more conservative investors to access Bitcoin, offering a level of security and familiarity through traditional brokerage accounts.
Spot Bitcoin ETFs play a significant role in fostering trust, signaling to the market that it has matured and is secure. As a result, a broader range of investors feels comfortable participating in the market.
A Wealth of Choices in Spot Bitcoin ETFs
The approval of these ETFs triggered a surge of capital into the market. Blackrock’s spot Bitcoin ETF set a new record by amassing $40 billion in assets under management (AUM) in just 211 days, a record previously held by another fund that took 1,253 days to reach the same milestone.
Today, there are numerous spot Bitcoin ETFs available. Here are the top five by AUM:
- iShares Bitcoin Trust ETF (NASDAQ: IBIT)
- Grayscale Bitcoin Trust ETF
- Fidelity Wise Origin Bitcoin Fund
- ARK 21Shares Bitcoin ETF
- Bitwise Bitcoin ETF Trust
Among these, the iShares Bitcoin Trust ETF stands out. The differences between these funds are generally minor, but the iShares ETF boasts the highest liquidity. Managed by Blackrock, a globally renowned asset management firm, it also offers one of the lowest fees and partners with Coinbase for top-notch custodial security. This makes it, in my opinion, the best spot Bitcoin ETF available.
Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and Coinbase Global. The Motley Fool has a disclosure policy.
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Passionate about analyzing economic markets, Alice M. Carter joined THE NORTHERN FORUM with a mission: to make financial concepts accessible to everyone. With over 10 years of experience in economic journalism, she specializes in global economic trends and US financial policies. She firmly believes that a better understanding of the economy is the key to a more informed future.
