Thoughts on the Bitcoin ETF
It’s here, it’s happening - Bitcoin is now available through an ETF (exchange-traded fund).
My immediate thoughts are that this parallels the gold and silver ETFs that were launched in the early 2000s. Then, as now, we saw a lot of hype and prices go up as they launched followed by a drop as the hype settled. We’re probably looking at another case of buy the rumour, sell the news.
However, the implications are very interesting. Firstly, the whole thing suggests Bitcoin isn’t the fad some think it is. Secondly, ETFs tend to bring in a lot more money and over time help raise prices - they certainly did with gold and silver.
But beyond that, it’s opened up Bitcoin to a much wider audience. Now anyone with a trading account can buy, and buy for small sums should they wish. People don’t have to play with tech to get Bitcoin and can add it neatly to their platforms, pensions etc. This may see further price rises in the future.
Bitcoin is a ‘buy and hold’ investment in my personal view. Professionally I am neutral on the asset and still prefer income and or dividend-producing assets for the bulk of any portfolio. I lean towards seeing it as a speculative holding but can also see it holding a similar place to gold and silver ETFs in many portfolios in the future.
Whatever your thoughts are on Bitcoin, its recent addition to the growing ETF family of investment funds suggests it’s here to stay. It will be interesting to see how this plays out as it’s traditionally a non-mainstream investment that has now become as mainstream as your regular index funds and commodity ETFs.